CasinoBeats is breaking down the numbers behind some of the industry’s biggest stories. Our latest headline reflection features reported taxation in the UK and financial updates from Rank Group, evoke and Entain.
50%
The UK gambling industry could be facing a 50% remote gaming duty tax, as new Chancellor Rachel Reeves searches for revenue-raising measures ahead of a tough first Autumn Budget.
The Guardian reported that one of the ideas being given serious consideration by the Treasury is major changes to the UK’s complex array of gambling taxes. Unlike many of the tax ideas that have been floated by government sources in recent weeks, this one has received little pushback from Whitehall officials, according to the newspaper.
Plans for the increase reportedly stem from two influential think tanks, which according to the Guardian are also backed by one of the party’s most significant donors.
A central theme of the Labour government’s initial 100 days in charge has been their commitment to plugging a £22bn gap that they claimed was left by the previous tenure.
Online casino games are thought to be at the centre of potential tax hikes, as part of a campaign pushed by multimillionaire Labour donor, Derek Webb.
Webb, who has elevated his stature as a Labour donor in recent years, was also key for the campaign to restrict maximum stakes on Fixed Odds Betting Terminals, a regulation that had a major impact on the retail gaming sector.
The Institute for Public Policy Research (IPPR), which put forward the proposals, said as much as £2.9bn could be raised now, a figure growing to £3.4bn by 2030 through the increasing of remote gaming duty to 50%, more than double the 21% it currently sits at.
Additionally, another think tank backed by Webb, the Social Market Foundation, is reportedly looking at a proposal that would have a smaller impact on the industry, but still strengthen government finances.
Despite it being seen as a diluted increase in taxes, the plans would still be likely to double taxes paid by gambling companies – another move that would likely lead to backlash from the sector.
£417m
evoke revenue for the third quarter of 2024 was fuelled by a positive trajectory of gaming for the firm, which grew by 10%. Overall revenue increased by 3% to £417m.
These figures caused the group to confirm expectations for the second half of 2024 are in line with the mid-term target of 5-9% year-over-year growth.
The quarter marks the first time that the operator has reported growth since the opening quarter of 2022, as it shifts focus from the UK.
It underlines a period of transformation for the operator under the leadership of CEO Per Widerström, with the operator reporting year-to-date revenues standing at £1.27bn (-1%).
Widerström commented: “I have now been in position for a year, and I am pleased that the turnaround of the business is working, with the first quarter of revenue growth since Q1 2022 and positive underlying trends.
“We are achieving our plans to improve trading in the short-term, while simultaneously radically transforming the Group’s capabilities for the long-term.”
10%
Entain has stated that its performance in the third quarter of 2024 was “ahead of expectations”, as online net gaming revenue (NGR) has risen by up to 10% year-over-year.
However, newly appointed CEO Gavin Isaacs also apprised investors regarding the impact of a potential tax increase on the UK gambling market. Isaacs noted that such increases would “have a materially, detrimental impact on the economic contribution of wider industry”.
The gaming group reiterated its update from last month that its UK&I online operations have returned to YoY growth “sooner than expected”, adding that all key markets delivered growth during the quarter as well.
Following the “stronger than expected” Q3, Entain has upgraded its guidance for FY24 to expect online proforma NGR growth to be mid-single-digit positive on a constant currency basis, as the operator has “increased confidence for the balance of the year.”
Isaacs, who was confirmed as CEO of Entain at the beginning of September, added that the company is “already on a path of strategic and operational improvement”.
£197.4m
Rank Group has lauded a positive period of growth, as UK casino engagement fuelled a net gaming revenue (NGR) increase of 12% to £197.4m.
For the group’s first quarter reporting period, ending 30 September 2024, Rank saw a 10% increase in land-based NGR, as Grosvenor saw a 13% increase in NGR to £95.3m.
John O’Reilly, Chief Executive, commented: “We have continued to build on the momentum that we have generated over the past year and a half, and I am very pleased with our start to this financial year.”
“Rank is now a stronger and more sustainable business, and we are looking forward to the land-based legislative reforms coming to fruition in 2025.”
There was also significant growth for the firm’s Mecca operations, as the NGR of venues grew by 4%, driven by a 5% increase in spend per visit with visits down 1%.
Furthermore, for its two flagship brands, Mecca and Grosvenor overall digital NGR rose by 15%, as both brands enjoyed significant engagement.
A$13.1m
The High Court of Australia has ordered SkyCity Entertainment Group to pay an additional A$13.1m (approx €8m) in casino duty to the Treasurer of South Australia over a dispute about loyalty points and gaming revenue.
The dispute was over the interpretation of the Casino Duty Agreement dated 27 October 1999, regarding the “treatment of loyalty points converted to gaming machine play for the purpose of calculating casino duty at the SkyCity Adelaide casino”.
In a statement, the operator said the High Court ruled against SkyCity, confirming the South Australian Court of Appeal’s interpretation of the agreement of “credits on gaming machines arising from the conversion of loyalty points, when played by customers, are to be included in gaming revenue for the purpose of calculating casino duty at the SkyCity Adelaide casino”.
As such, SkyCity Adelaide is now obliged to pay an additional A$10.3m casino duty in addition to A$2.8m “of additional casino duty payable as a consequence of that part of the Court of Appeal’s earlier judgement that was not appealed to the High Court”.
