UK Gambling has been warned that the Labour government is reviewing proposals to increase tax revenues by up to £3bn.
As reported by The Guardian, Chancellor of the Exchequer Rachel Reeves has received two proposals to increase gambling taxes, considered as a measure to plug the UK’s £22bn public finance deficit.
A proposal endorsed by the Institute for Public Policy Research (IPPR) calls for the Treasury to double taxes on gambling’s “higher-risk segments,” such as online casinos, slots, and sports betting, to raise £2.9bn next year and up to £3.4bn by 2030.
A separate proposal from the Social Market Foundation (SMF) urges Reeves to double taxes on all online gambling activities from 21% to 42%, raising £1bn annually.
The Guardian noted that a tax increase on gambling is “definitely on the map,” according to a source familiar with Treasury thinking, with little resistance aside from industry lobbyists.
The call for higher taxes on the UK gambling sector is led by Derek Webb, founder of the Campaign for Fairer Gambling (CFG), a former professional poker player, and inventor of patented casino games.
Webb, who reportedly donated £1.3m to the Labour Party in 2023, also led a decade-long campaign to reduce fixed-odds betting terminal (FOBT) stakes from £100 to £2, a goal achieved in 2019.
The Betting and Gaming Council (BGC), the trade and standards body for UK gambling, responded that “comparable markets abroad, which have imposed draconian regulations and disproportionate tax regimes, have seen a spike in illegal black-market gambling.”
Tax hikes on UK gambling are raising concerns for British horseracing, which heavily relies on funds from the Racing Levy and the purchase of media rights.
Taxes on UK gambling were last increased by Theresa May’s government, which raised remote gambling duties (RGD) from 15% to 21% in the 2019 Autumn Budget as part of a broader fiscal policy targeting gambling, tobacco, and fatty foods with new “sin taxes.”
The proposals from SMF and IPPR would raise the RGD from 21% to around 50%.
Analysts at Jefferies have warned that these measures could “nearly eliminate bookmaker profitability in the UK” and could lead to job losses in retail betting and significant harm to the sports sector, especially horseracing.
While the Treasury has not finalized its budget plan, the proposals are under serious consideration and could form part of Labour’s first budget in 14 years.
The Autumn Budget will be announced on Wednesday, October 30, with Labour pledging not to raise taxes on working people or small businesses for income tax, National Insurance, and VAT.
However, Reeves has warned British businesses that “painful decisions” will be made to address the £22bn shortfall, which could include increases in capital gains tax, inheritance tax, and the removal of pensions tax-free cash allowances.
Other potential headline measures include introducing VAT on private school fees, limiting non-dom status, and increasing stamp duty for UK landlords.
The Autumn Budget will reveal the state of the UK government’s finances and its economic plan to reduce inflation to 2% annually.