Similarly, Rachel Reeves, the new Chancellor of the Exchequer is expected by everyone to raise taxes in her first autumn Budget. The alarm over deepening child poverty is growing. Simultaneously, there is a significant legislative momentum behind raising gambling taxes to provide more government revenue. So it’s no surprise to hear Reeves speak of her uncontroversial predecessor, Gordon Brown, with deep admiration. Today, she champions his efforts to change the gambling tax system.
Gordon Brown, who served as Chancellor under Tony Blair for over a decade, recently supported the recommendations from the Institute for Public Policy Research (IPPR). The think tank’s report recommends increasing the tax rates on different forms of gambling, which could raise an extra £3.2 billion each year. Taxes on online casinos will more than double from 21% to 50%. In keeping with this punishing approach, the tax on gaming machines will increase from 20% to 50%.
Besides, the government will consult on merging remote betting duties and betting duty on gross profits, to take effect from October 2027. At present, most bookmakers are based offshore, meaning that they can entirely avoid UK corporation tax. In addition, these firms gain from exclusive tax benefits, such as a full exemption from value-added tax (VAT).
Brown has emphasized that raising these taxes could provide “the kind of headroom that Rachel Reeves needs” to address child poverty and other pressing issues. He is now loudly pushing for the kind of fiscal firepower that would allow the government to afford to abolish the two-child benefit cap. He has campaigned against the overall benefit cap, introduced in 2013.
The unelected Betting and Gaming Council is already crying foul that the tax increases … This has happened in the face of the widespread support from Brown and the IPPR. Or to call their alternative suggestions “economically reckless” and “factually misleading.” In its report, the Council cautions that further tax hikes would be disastrous. Coming on top of recent government reforms that have already seen the sector lose more than a billion pounds in income, these measures would endanger punters, jobs and the public purse.
“Further tax rises, fresh off the back of government reforms which cost the sector over a billion in lost revenue, would do more harm than good – for punters, jobs, growth and public finances.” – Betting and Gaming Council
The Betting and Gaming Council similarly warned that higher taxes would push consumers into unregulated gambling markets. These unregulated markets do not even attempt to protect consumers and they do not add to any tax revenues.
Reeves has appeared on the record professing her dedication toward child poverty being a central focus of her agenda. “We’re a Labour government, of course we care about child poverty,” she stated in a recent interview. Media reports allege that she has floated the idea that wide-ranging tax policies on gambling will be released at the next Budget.
“We’re a Labour government, of course we care about child poverty.” – Rachel Reeves
These possible tax changes are proposed against a relatively recent history of growing criticism of gambling operations in the UK. Online gambling is bursting with popularity. State regulatory bodies have found themselves in the crosshairs between protecting consumers and growing risky products, while protecting lucrative tax revenues.
