The UK Treasury has been accused of ignoring warnings from the Department of Culture, Media and Sport (DCMS) that a significant increase in remote gambling taxes would not raise as much as initially forecast, according to a Freedom of Information request first seen by CityAM.
Chancellor Rachel Reeves’ Autumn Budget last November revealed that remote gaming duty (RGD) will nearly double from 21% to 40% from April 2026, while remote betting duty (RBD), excluding domestic horseracing, will jump from 15% to 25% from April 2027.
Former prime minster Gordon Brown and two think tanks had called for hikes to gambling taxes, with the Social Market Foundation’s proposal claiming an additional £2bn would be generated by raising RGD to 50%, lifting general betting duty across all products to 25% and reducing horseracing from 15% to 5%.
The Institute for Public Policy Research suggested £3.2bn would be raised by putting RGD and machine gaming duty up to 50% and increasing general betting duty to 25%.
However, according to the Freedom of Information request reported by CityAM, the Treasury was told the figures in the Social Market Foundation’s report were “unrealistic” and that raising taxes would not only boost black market leakage but also result in the legal sector losing thousands of jobs.
Per the report, DCMS’ warnings were ignored and Reeves went ahead with the duty hikes, albeit to a lesser level than both think tanks’ reccomendations
The warning echoes comments made by several operators, including Entain and evoke, as well as the Betting and Gaming Council (BGC) in the lead up to November’s announcement.
The trade body’s CEO Grainne Hurst pointed to BGC-commissioned analysis from EY which claimed 40,000 jobs would be at risk and £8.4bn in stakes would be lost to the black market as a result of the IPPR proposal.
In early November ahead of the Autumn Budget, Hurst warned the Treasury Select Committee during a two-hour session of the negative impact tax rises would have on the legal sector.
Taking to LinkedIn in the wake today’s developments, the BGC said DCMS officials “warned the Treasury about the consequences of steep gambling tax rises before last year’s Autumn Budget”.
“Officials raised serious concerns that the £2bn revenue claims were unrealistic and warned higher taxes will put jobs at risk, reduce investment and push customers away from the regulated market towards the harmful illegal black market.
“Despite these warnings, the Treasury chose to press ahead.” The trade body reiterated that the regulated sector contributes £4bn a year in tax and supports more than 100,000 jobs.
Earlier this week, the Office for Budget Responsibility (OBR) lowered its forecast for betting and gaming receipts for 2025-26 from £4bn to £3.8bn, pointing to “weaker-than-expected in-year receipts”.
The government’s fiscal watchdog expects tax receipts to reach £6bn in 2030-31, with two-thirds of this figure attributed to the tax increases.
The incoming tax hike has led to bet365 ending long-standing horseracing sponsorship deals with Haydock and Newmarket racecourses, following in the footsteps of Coral, which said in January it was ending its 33-year sponsorship of Cheltenham Festival’s Coral Cup.
In the aftermath of the tax hikes, EGR examined the fallout of decision.
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The post Treasury accused of ignoring DCMS’ warnings over tax hikes first appeared on EGR Intel.
A Freedom of Information request reportedly reveals Chancellor Rachel Reeves was told in advance of the Autumn Budget the figures were “unrealistic” and jobs would be lost
The post Treasury accused of ignoring DCMS’ warnings over tax hikes first appeared on EGR Intel.