Hello and welcome to today's edition of iGaming Daily, when for a change we'll be talking about
some news that didn't happen, namely the much expected rise in gambling taxes in the UK budget.
So join me to discuss this non-event and other matters arriving from Rachel Reeves' historic
first budget are SBC's content director Ted Menmure and payment expert editor Ted Orme
Clay. Well, Ted. down in London. How are you today? Very well, Martin. How's your break?
Yeah, very good. Peaceful. I've had enough of airports for one year with all the travel we
do with work. So I sat around the house for a week. It was extremely relaxing and quite
pleasing. So thanks for asking. And Ted, how are you back in Manchester after a trip to,
I believe, Monaco last week, which is like Ashton and Lyme where our office is. Yeah, almost
identical in every conceivable way, actually. Yeah. You know, the city state of Ashton was
famous for its casinos, F1 tracks and high performance sports cars.
Yeah, yeah. Back in Manchester after a trip to France and Monaco to the Sportale conference,
which was a very, very interesting love, a lot of good panels and speeches all about sports
business, sports tech, broadcasting sponsorship. Yeah, if we can just alert Rachel Reeves that
you were taking the SPC private jet. Yeah. And Ted, as you appear to, I'll set you up to for
a bit of self-promotion there and you've missed that open goal. So you can read all about some
of those, the interesting panels from that conference on Insider Sport. Right. Before we get into
chatting about the budget. It seems a good time to mention that iGaming Daily is brought to
you in part with OptiMove, the number one CRM solution for the iGaming industry. Okay, with
that out of the way, let's start maybe by being a bit more general rather than going straight
into the bit about the gambling tax, which is talking about something that didn't happen.
Ted, what are the main takeaways you had from the budget? Is it a... Labour came in with
this big promise they were going to be the party for growth and they're going to support business
and so on. What do you think businesses in the gambling industry and perhaps other sectors
should take away from what we heard last week? Okay, so this budget marks a shift from the
prior government strategies. So it's moving incentives or incentives for economic growth.
into public investment. I think that is labor's long-term view of how it wishes to realign
and fix the economy. From taking an overall view, Rachel reads one of this budget and literally
just announced that, look, the economy needs to fill a 40 billion pound black hole. Businesses
will face increased taxes, notably... and national in high-end insurance contributions. And this
was detailed as the main kind of fiscal tool by the Chancellor to fill the deficit. High
interest rates also will raise kind of costs on business. And some argue that the budget
kind of transfers wealth from companies into public services, which will kind of divide
opinion on kind of labor strategy. Overall, kind of the tax deficit. whether placed on
business will affect consumers indirectly, directly or indirectly. So the burden will be borne
by the electorate. It was a budget of tough measures and a budget of tough medicines. And
I think one that the Labour government did not want to announce, but it has to kind of look
to fix the UK economy. Yeah, I think that's right. And it's a budget that's had. we are
at least four years away from the next election. So we're getting the painful stuff out of the
way now. But you did raise an interesting point there about how they're trying to refocus the
economy because if things go to plan, the public sector will be the highest percentage of the
UK economy. It's been since Jim Callaghan's government back in 1979. So it's a... a bit
more to this rather than just a few pence on national insurance here and there. Some people
pay more in inheritance tax and so on. The overall theme of it is genuinely historic. It's the
first time for a long time I've been able to say that about a budget. Ted, what did you
pick out as highlights from it? Anything much relating to sort of payments or investment
or any of the beat you cover on payment expert? Yeah, it's an interesting one. I think, well,
firstly, obviously Ted's hit the nail on the head really with, I think what the Labour government's
ambitions are. Obviously their focus is on stimulating growth through investment. Part of this investment
from some of the stuff I've read is into this quite extensive plan for funding into more
research. This is obviously going to be quite varied, you know, research can cover just about
anything. But I think from the payments and fintech side of things, Labour have been very
vocal over the past couple of months about they want to see continued support for certain financial
innovations and initiatives, certainly fintech ones. There's been a lot of discourse around
open banking and artificial intelligence, unsurprisingly really given how much those are dominating
a lot of discussion in fintech and payments at the moment. This is also kind of a continuation
of what the conservatives are trying to do, particularly under Sunak, who is quite a big
fan of the financial services sector. I think probably given his professional background,
obviously, Labour are trying to build on that and put their own sort of spin on it in their
own, in their own style, obviously being a very different ideological party to the conservatives.
This is, obviously, this is the, this is the area that I think is probably for the payments
and fintech kind of sector to keep an eye on. where this research funding might go and how
they can benefit from this. And then in turn, I guess, how the gambling sector, stakeholders
in that should probably pay attention to that and see how they could benefit. There's obviously
a lot of conversations around what FinTech initiatives and payments initiatives, what potential they
can have for the gambling sector. We saw that discussed quite a bit at our conference in
Lisbon a couple of months ago. And it's obviously quite a common talking point on a lot of our
media sites as well. Obviously, to build on that, though, the main way that they're planning
on funding this is through these tax raises. I think they want to raise an additional 40
billion in tax, a lot of it chiefly from companies. I think that is, there's been, the kind of
the reaction I've seen has been mixed. There's been a lot of welcoming of the research, but
a lot of caution around the taxation side of things because businesses are a bit worried
about what financial burden this could place on them. interesting there on the one hand,
they're doing things to encourage research, encourage technological development. On the
other hand, they're removing some of the rewards for it with the capital gains tax changes.
But ultimately, you know, something has to pay for public services, doesn't it? And we can
argue, I'm sure even the three of us will probably have different opinions on what that is. And
I'm sure there are about 20 different opinions amongst the members of the House of Commons
as well. So let's focus a bit on the gambling side of things then. I mean, obviously the
rise in employers' national insurance is going to be a big cost for, in particular, the big
employers in the sector, the tier one businesses and particularly those with retail estates
and so on. temptation that Rachel Reeves did avoid was increasing gambling taxes despite
some sort of pressure from people who you would regard as natural labor supporters, I think.
So Ted, perhaps you could tell us a bit about what had been trailed and what the industry
feared and then I guess some of the reaction we've had about the fact it did not materialize
in the end. Okay. So in the weeks leading up to the budget, we had two think tanks present
to the treasury, which is effectively a doubling on remote gambling duties or high risk games
for industry taxes. So I believe that concerns were legitimate in general, just because I
believe that all industries and all leaderships should be concerned about the first budget.
statement of a new government and one that really has to fill a deficit of 25 billion pounds.
Overall, the UK government escapes the doubling in taxes proposed by these think tanks. Really,
I don't know how seriously the treasury took in these considerations put forward as they
would have only raised about one billion pounds. There is somewhat of a relief across the industry
but overall, and I think most importantly is that with the budget finished, And I think
that the industry can just return back to focusing on the finalization or concluding the gambling
review. The Tory government can do that. So let's hope that the Labour government can.
Will Barron Sure. And there was very deep in the detail of the documents that came out after
the speech in parliament. There was a little hint of some possible changes in the future
or consideration of changes in the future to the tax regime. Yes, the Labour government
have signed that they are going to streamline remote tax duties, especially on phone lines
and remote gaming segments under one bracket, which is somewhat of a positive and that they're
not going to consider raising or reviewing tax rates until the 2006 budget. So, there is scope
there. Again, this returns the industry back to needing to finalize its generational review,
which is a positive overall. Sure. And Ted, what sort of reaction have we seen to this
non-announcement and non-raising of taxes? I imagine, I'm sure Ted will be a bit more clued
up on this than me coming from the SPC side of things. It's been broadly welcomed, has
it not? I think the Bettingham Gaming Council put out a statement praising the fact that
this wasn't in there after quite a lot of media speculation. even some questions raised in
parliament, if I remember rightly from a parliamentary session I saw with, I believe it was with Lisa
Nandy from DCMS. So yeah, I'd say the industry is probably incredibly relieved to not have
this additional financial pressure. I think as Ted outlined there, it seems to be quite
a sensible decision, I think, to let the rest of the gambling act review adoption take its
course so that the industry sort of respond to that and adjust to these various regulatory
changes that are coming in before any more taxation is put on top of it to help with Labour's ambitions,
if I were to discuss, to reinvest in the economy and things like that. Ted, sorry, I can see
you're wanting to get in on this. Yeah. I mean, I think one of the positive things about this
budget is that, yes, it had tough measures, but I don't think that it was punitive on industries,
right? So... The actual one-to-one tax increases on individual industries, we got one on vapes,
which Keir was very clear that he would implement, one on private jet flights, which was somewhat
of a surprise. And then the other kind of specific measure, I think, was on our sugary drinks.
So gaming wasn't kind of imposing that, wasn't put in that bracket. I think it kind of escapes
anything punitive and I think it returns kind of labor to thinking like long-term on a tax-effective
industry and how it kind of plans for that. So it's a positive kind of first direction
for labor and gaming. Yeah, I think so. I mean, it would seem a fairly odd thing to do. It
is a successful industry that does raise a reasonable chunk of money for the public finances. I think
it's about 0.3%. of the public budget comes from gambling taxes. So why would you mess
with it? But there's no sign of the pressure groups taking this as a defeat and going back
and thinking of something else because they've already been outed. There's a piece unsurprisingly
in The Guardian. in which I quoted Derek Webb, the leading gambling reform campaigner and
Labour's fifth biggest donor, describing this as a missed opportunity and talking about how
popular it would have been with the public as a vote winner and so on. And also the Lib Dems,
who perhaps emboldened by now being the third biggest party in parliament and having quite
a sizeable number of MPs in there, have spoken out against. But again, Martin, I think in
kind of the back, I'm sure any criticism of that budget not adding gambling taxes is if
you speak to any CFO or CEO, in any budget, they're always prepared for any increase in
taxes towards gambling. And I think kind of leadership can kind of factor in. What they
can't factor in is the context of what was brought forward by those think tanks, which was an
immediate doubling of taxes, right? And that would have just sent shockwaves across the
industry, but also across the industry's value chain, i.e. for horse racing, for advertising,
for the way it sets up its technology systems. That would have been kind of the shock effect
of that type of budget coming in for gambling.
But there's just no guarantee that, you know, come two years time, they will be tax raised
or not. That's up to the Labour government and that's down to how the UK economy plays out.
Yeah, I think so. There's no doubt about it. This budget doesn't go quite as well as they're
expecting and, you know, in any budget there's a range of possibilities about how successful
it will be in achieving its aims. It's eminently possible in two, three years time, Rachel includes
more tax rises in different sectors. You would like to think though that it won't be a doubling
overnight if that is the case. Okay. Obviously, the budget last week and the historic changes
that have been brought in during it was the big political story in the UK. I believe there's
also something going on in the political world on the other side of the Atlantic, which people
have been following quite closely. Start with you a bit, Ted. There's a colossal amount of
interest from punters in the UK on the US election, which must be an interesting spectacle if you're
sitting in the US where you're not allowed to bet on the election. What can you tell us about
what's been happening on, in particular, the exchanges and so on? Because they've been doing
some, they've been seeing some serious action over the last two or three days, haven't they?
Yeah. Obviously, political betting, as you said, political betting is not allowed in the US,
It's a very popular market, certainly around these big elections. And I don't think you
get anything bigger than the US elections. They're always far more of, I should say, spectacle,
I think, than our counterparts in the UK because of them being a lot more personalised. I think
whilst in the UK, obviously things are a lot more on a party basis. Although that has been
changing a lot over the past couple of decades, I think. But still in the US, it's a lot more,
there's a lot more of a media frenzy and a big sort of I don't know, media showdown around
it. There's like I said, there's a lot more of a spectacle. So it makes it a lot more engaging
for a betting side of thing, I think. And this election in particular, obviously we've got
the return of Donald Trump after losing the last one and the various fiery aftermath of
that. And then you've got Kamala Harris on the other hand, who has a lot of, you know, the
potential has become the first ever woman president of the US. So it's a very historic one. There's
been Donald Trump is a figure that obviously is constantly caught in controversy. There's
been all these debates around it stirring up interest. The US elections are always a very
popular betting market. I think all of these factors have just made that even more so. Then
to top it all off on top of that, the thing that's really interesting to follow on the
UK is as you've mentioned with these exchanges, Martin, UK
quite a margin, as in like there's a lot more UK bettors betting in favor of Trump than there
are of Harris, which is interesting because the polls are suggesting that the two are for
the most part neck and neck and a lot of the ones I've seen more often than not are putting
Harris ahead of Trump. So there's a very interesting disconnect between the way the betting exchanges
are expecting it and between how the official opinion polls are expecting it. Yeah, it's
often said that the betting markets are a better guide than the polls to who's going to win
an election, but they don't appear to be reflecting in any way what the pollsters are saying, even
what the reports coming in from on the ground in those US states are saying either. So it'd
be interesting to see whether we actually follow that perceived wisdom on the importance of
political betting markets here. And just one more thing while I've got you Ted. There's
no real impact on the... likely direct impact anyway on the gambling industry from the presidential
election in the US. I'm sure there'll be corporate taxes and things like that will be an issue
down the line. But on your beat, crypto is a big issue in this. What are you expecting to
happen? Well, it will be either Trump or Harris, I guess, but there will be a big story if it's
neither of them. But yeah, what are you expecting? They've talked both quite extensively about
the potential offered by crypto for the US economy, haven't they? Good news for the industry of
Trump wins, do you think? I feel that there are certainly a few stakeholders in the industry
who would feel that way. This election has seen, I think what I would call some unprecedented
levels of activism and campaigning among the crypto sector in the US, at least from what
I can think of, three political action committees that have been very active throughout all of
this. I think obviously to our non-US audiences and any US audiences who are listening can
correct me if I'm wrong. via messaging on LinkedIn or something, I don't know. A political action
committee is an organization that's established to effectively just sort of channel campaign
funds towards certain candidates around who are very active on certain issues. So from
what I've seen for the most part, the Republican candidates, both Donald Trump for the president
and the various ones in the Congress who are also standing this week. The Republicans tend
to be more pro crypto than the Democrats. I think
if Harris is to be elected, we can expect a continuation of how the Biden administration
has been approaching cryptocurrency, which I think would be a cautious approach. I think
it might be an appropriate term for it. Some in the crypto sector view it as even a confrontational
approach and have been quite critical of the... Securities and Exchange Commission's leadership
under Biden, the SEC leadership is appointed by the president, who they accuse of having
an approach to sort of constant enforcement. However, I think obviously on the flip side
of that, the various Democratic politicians probably argue they're concerned about cases
of fraudulent activity, cases of money laundering, cases of securities laws being broken by certain
bad actors, I guess we could say within crypto. And that's the reason for these enforcement
actions. On the Republican side of it, we've had Donald Trump, who has been extremely vocal
about courting cryptocurrency votes. He spoke at the Bitcoin 2024 conference earlier this
year saying about he wants to make the US a Bitcoin superpower. I believe it was his terminology.
If you want to replay that in your head and his voice, I think it would fit quite well.
And then, well, he said he spoke at the Libertarian National Convention earlier this year, saying
something like, I'm going to make sure that the government will never come after all your
Bitcoin. You know, he's been very vocal in courting the sector. But he also really hates central
bank digital currencies, which is an interesting one there, because obviously he sees that as
being, as the term suggests, just far too centralized. And I think, you know, it's more in favor of
like the private market. So yeah, sorry, Martin, I've given you an incredibly long-winded answer
there. But yeah, if Harris gets elected, you can expect more of the same. If Trump gets
elected, you can expect maybe some, yeah, a lot of easing off of regulation around private
cryptocurrency holding, I reckon. Okay. That's interesting. And if I had as many criminal
cases outstanding as... former president, I would be a bit wary about the tracking that
comes with CBDCs as well. It's perhaps understandable. Well, Ted, thank you for joining me today to
discuss this. Hopefully by the time we reconvene next week, there will be an outright winner
in the US election. We might have some of the problems we saw last time around. But thank
you all for listening. join the iGamingDaily team for another edition tomorrow. Thank you.