UK Treasury Committee hears the case for and against a rise in gambling tax
MPs listened to arguments from both sides as anticipation builds over possible gambling tax hike in Autumn Budget.
UK.- A clash over the future of gambling taxation unfolded during a Treasury Committee hearing this week, where MPs heard arguments from both sides. On the one hand, reform advocates made the case for a rise in gambling tax in the Autumn Budget next month, arguing that the sector is undertaxed. On the other, industry figures argued that a tax hike could be counterproductive.
Those in favour of higher gambling tax included Carsten Jung, director of Economic Policy at the Institute for Public Policy Research (IPPR); Dr Theo Bertram of the Social Market Foundation; and also Paddy Power co-founder Stewart Kenny. Expressing the industry’s point of view were ere Betting and Gaming Council (BGC) representatives Stephen Hodgson, chair of its Tax Committee, and CEO Grainne Hurst.
The first half of the two-hour hearing was led by those calling for higher taxes. Jung argued that “some types of gambling are more harmful than others,” and that tax policy should reflect this disparity. He likened the risks of remote gambling to those of alcohol and tobacco, which are taxed due to their societal impact.
“Gambling is a social harm … and we do tax other social harms as a result, from alcohol to tobacco,” he said. “We recognise that these are not normal goods, they have a societal impact, and that is why we propose an increase in gambling taxation, to make up for the social harms.”
Jung clarified that the IPPR’s proposed tax hikes would target online gambling rather than physical venues or horse racing. “We particularly focus on remote gambling, not the bricks and mortar type, not the horse racing type – people sitting at home gambling, either online slot machines or other types.”
The IPPR proposes raising Remote Gaming Duty from 21 to 50 per cent, machine games duty from 20 to 50 per cent, and general betting duty from 15 to 25 per cent.
Bertram echoed Jung’s stance, deeming slot machines and online casinos to be the most harmful forms of gambling, with horse racing at the lower end of the risk spectrum. He noted that under the joint IPPR-SMF proposal, increased taxation on racing could be reinvested into the sector itself rather than directed to the Treasury.
Meanwhile, Kenny, reflecting on his own experience in the industry, also argued that sports betting carries less risk than slot machines. “There are two ways of seeing if a product is addictive – how quick is the result after the investment, and how quickly you can repeat the dose,” he said. “One message is clear – the parts of the industry that have the most harm should be taxed the highest.”
The BGC took the floor in the second half of the hearing. Hodgson contended that the sector already faces a cumulative tax burden “in excess of 80 per cent,” citing corporation tax, business rates, VAT, betting and machine gaming duties, and other levies.
Hurst challenged the notion that gambling inherently causes social harm, referencing a Gambling Commission study in which 72 per cent of respondents said they gamble for enjoyment rather than financial gain. She stressed the industry’s compliance with the Gambling Act White Paper, which introduced 63 new regulatory measures.
“The industry has a lot of regulations in place voluntarily and the white paper to raise those standards,” she said. “We track behavioural triggers, late night play, chasing losses, so we make sure players are staying within the regulated space.”
When asked about the potential impact of higher taxes, Hurst warned that costs would rise for consumers, return-to-player rates would fall, and users might turn to unregulated platforms. She cited figures suggesting the black market already draws £4.3bn from UK gamblers, costing the Treasury £67m annually.
Major operators such as Betfred and Entain have voiced concerns about job losses and retail closures if the government does decide to increase gambling taxes. However, there are signs that these betting shops might close anyway. Flutter has already announced the closure of over 40 Paddy Power betting shops, and
Chancellor Rachel Reeves will present the UK Autumn Budget on November 26. Over 100 MPs in her own party and all of the Liberal Democrats are calling for a rise in gambling tax.
