Submission Type

Presentation

Session Title

Session 1-4-C: Taxation and Regulatory Lessons

Location

Caesars Palace, Las Vegas, Nevada

Start Date

28-5-2019 3:30 PM

End Date

28-5-2019 4:55 PM

Disciplines

E-Commerce | Taxation

Abstract

In 1926 the Chancellor of the Exchequer, Winston Churchill, introduced a tax on betting into the UK, claiming he was looking not for trouble, but for revenue. He got a lot of the former but very little of the latter, and the tax was repealed in 1930. Cash betting in licensed betting offices was legalised in 1960, and the taxation of betting was re-introduced in 1966, based on turnover. In 2001, this turnover system of taxation was abolished and replaced with a tax on ‘gross profits’. The effective incidence of the tax was significantly lower than the tax it replaced, and was not passed on to bettors. This new system of betting taxation was later extended to include other types of gambling, including football pools, bingo and betting exchanges, and in 2013 was extended generally to gambling machines. This paper considers the development of betting tax in the UK and in particular the effect of the switch to a ‘gross profits’ tax on the gambling sector, and considers what more general implications this has for the way in which gambling, and in particular gambling machines, should be taxed in other jurisdictions.

Keywords

Gambling, Taxation

Author Bio

Dr. Leighton Vaughan Williams is Professor of Economics and Finance and Director of the Betting Research Unit at Nottingham Business School, Nottingham Trent University.

Funding Sources

No funding sources are relevant to the manuscript.

Competing Interests

I have no competing or conflicting interests.

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May 28th, 3:30 PM May 28th, 4:55 PM

The Curious Case of Betting Taxation in the UK: Lessons and Implications

Caesars Palace, Las Vegas, Nevada

In 1926 the Chancellor of the Exchequer, Winston Churchill, introduced a tax on betting into the UK, claiming he was looking not for trouble, but for revenue. He got a lot of the former but very little of the latter, and the tax was repealed in 1930. Cash betting in licensed betting offices was legalised in 1960, and the taxation of betting was re-introduced in 1966, based on turnover. In 2001, this turnover system of taxation was abolished and replaced with a tax on ‘gross profits’. The effective incidence of the tax was significantly lower than the tax it replaced, and was not passed on to bettors. This new system of betting taxation was later extended to include other types of gambling, including football pools, bingo and betting exchanges, and in 2013 was extended generally to gambling machines. This paper considers the development of betting tax in the UK and in particular the effect of the switch to a ‘gross profits’ tax on the gambling sector, and considers what more general implications this has for the way in which gambling, and in particular gambling machines, should be taxed in other jurisdictions.