The UK’s Labour Government is considering doubling tax rates on ‘higher harm’ gambling products including online casino games.
A report by the Institute for Public Policy Research (IPPR) estimates that the government could raise between £2.9 billion in 2025 and as much as £3.4 billion by 2030 through the proposed tax hikes.
The measure are being considered as Labour looks to generate additional finding to make up for a £22 billion deficit that Chancellor of the Exchequer Rachel Reeves claims to have found upon taking office.
At present, gambling tax rates and duties are applied to seven categories of gambling products and services. In 2023, this resulted in £3.3 billion paid in taxes. However, without lottery duties this falls to around £2.2 billion.
The IPPR’s proposal suggests leaving lottery and bingo taxes untouched but doubling those activities that are considered higher harm. This includes sports betting and casino gaming.
Proposed Tax Increases
- Gaming duty – from current 15-50% to 20-60%
- Retail bookmaking – from current 15% to 30%
- Remote gambling (online) – from current 21% to 50%
- Gaming machines duty – from current 5-20% to 10-40%
In its report the IPPR stated:
“The duties we have left untouched (pools and bingo duties) are justified on being lower harm and higher value (eg employment numbers) parts of the gambling sector. By contrast, we have proposed higher duties on general betting and remote gaming, as higher harm products. We suggest this is the best application of the polluter principle, and will create incentives for companies to focus on lower harm products.”
The Social Market Foundation (SMF), another think tank, is in the process of developing a more moderate proposal. This would increase the tax on online gambling companies from 21% to 42%, which would generate an estimated £900 million.
A report in The Guardian suggests that there is no pushback on the proposed tax increases and that the government will include new rates in its upcoming budget on October 30th.
A spokesperson for the Betting and Gaming Council said of the proposed rates:
“Comparable markets abroad which have imposed draconian regulations and disproportionate tax regimes have seen a spike in illegal black market gambling.”
UK Gambling Revenues Growth
In August of 2024, the UK Gambling Commission reported that online gross gambling yield (GGY) for Q1 24-25 came to £1.46 billion, up by 12% from the same period in the previous financial year.
It also reported that sports betting saw a 16% increase to £625 million while the land-based slots industry saw growth of 10% to $642 million. Licensed betting operators (retail bookmakers) reported GGR of £582 million, down by 1% on the same period in the previous year.
Olivia has worked as an editor and writer for major brands across multiple niches. She now focuses on the iGaming and sports betting industries.
The UK government is currently considering a significant increase in gambling tax rates, with proposals suggesting a doubling of the current rate. This move comes as part of a wider effort to address concerns surrounding the impact of gambling on society, particularly in terms of problem gambling and addiction.
The current tax rate on gambling in the UK stands at 15% of gross gaming revenue, which is paid by operators on their profits from gambling activities. The proposed increase would see this rate rise to 30%, effectively doubling the amount that operators are required to pay to the government.
The government has stated that the increase in tax rates is necessary in order to fund additional support services for problem gamblers, as well as to cover the costs associated with regulating the industry. It is estimated that the move could generate an additional £100 million in revenue for the government each year.
However, the proposed increase has been met with mixed reactions from industry stakeholders. While some have welcomed the move as a necessary step towards addressing the social issues associated with gambling, others have expressed concerns that the higher tax rates could drive operators out of the UK market, leading to job losses and a decrease in tax revenue overall.
It remains to be seen whether the government will ultimately go ahead with the proposed increase in gambling tax rates. However, it is clear that the issue of gambling regulation and taxation is a complex and contentious one, with no easy solutions in sight. As the debate continues, it is important for all stakeholders to consider the potential impacts of any changes on both the industry and society as a whole.
