Richard Flint: Don't gamble with tech sector over betting reforms
THE Government has published its response to the long anticipated Gambling Review and the headline measure was a reduction in the maximum stake on FOBTs '“ fixed odds betting terminals '“ to Â£2.
As an online only company, we don’t have this particular product, and I can understand some of the concerns around them, particularly given that FOBT players don’t have accounts that would enable them (or operators) to monitor and control their spending .
But the Government currently plans to make up any lost revenue from doing this by increasing the taxes paid by online gambling operators, like Sky Betting & Gaming, who don’t even have these machines.
As the UK’s most popular online gambling company, with our headquarters and over 95 per cent of our workforce in Yorkshire, this represents nothing less than a tax on Yorkshire jobs.
Unlike other online operators we are not based in Gibraltar or Malta, we are proudly headquartered in Leeds with a second office in Sheffield. We have created nearly 1,000 jobs in the last three years and have another 120 roles to fill right now.
We have launched schemes like our SBG CoLab programme - an incubator for tech businesses in the area. And this year we will open our graduate scheme for the fourth year running, helping build up the skills of local young people considering careers in technology.
So any increase in Remote Gaming Duty is a tax on hi-tech Yorkshire jobs and will clearly have an impact on our plans to create new roles in the North of England in the years to come.
Because we are based on on-shore here in Yorkshire, our tax burden is already high. Higher indeed than most of our competitors and higher than what we make in profit. Last year we paid £153m in taxes and made £146m in profit.
It is right that we did this – we are a UK-based business and proud of the contribution we make to Yorkshire and the wider UK economy. A contribution by the way, that was worth £300m in GVA to the regional economy.
But it can’t be right to increase our tax burden even further to pay for a change in regulations that are unrelated to us. Especially when there are other, more equitable ways the government could raise any revenue it may need to cover this shortfall.
Rather than punishing a UK based job creator, the Government should focus on getting a fairer tax contribution from other tech companies who, unlike us, don’t already pay sufficient taxes on their UK activities.
In the gambling industry the Government levies a tax on the profits we make from our UK based consumers. We have to identify where our customers are based, and if they are in the UK, tax them accordingly. Why can’t the Government look to extend this type of taxation to the big tech companies? Surely Google, Facebook and others know where their users are, know where their ads are viewed, and could pay taxes accordingly?
Or if the Government wants to look only within the gambling industry, then what about closing the loophole that means companies based offshore don’t pay VAT on their marketing and other costs? This tax cost Sky Betting & Gaming around £30m last year so extending it to other companies could easily address any shortfall the reduction in FOBT stakes might lead to.
At Sky Betting & Gaming, we are committed to providing safer gambling, and recognise that regulation plays an important part in ensuring people can gamble safely. We welcome the Government’s wider proposals around online safety and the importance of using data to ensure gamblers are protected. We already invest tens of millions of pounds in people, systems and the industry’s first ever safer gambling advertising campaign designed to reduce problem gambling in our customer base and we plan to increase this spend.
To this end, Sky Betting & Gaming has already put forward a four point plan to industry. This includes harnessing technology so we can use customer data to understand player behaviour, and monitor for signs of harm.
We want to make a concerted effort to interact with customers who show signs of harm, discuss their gambling behaviour with them, and present details of their behaviour clearly. Finally, we will want to increase our interventions with customers to stop them harming themselves in the most extreme cases.
We look forward to working with the Government and industry going forward to continue to build a safer more responsible gambling industry fit for the 21st century. However, Ministers need to think through the implications of further tax increases online, or risk unintended consequences which would damage our local economy.
Otherwise this will be another measure from Government that makes people think twice about their support for the Northern Powerhouse in general, and Yorkshire in particular.
Richard Flint is chief executive of Sky Betting & Gaming.