UK Government Explores Doubling Gambling Tax Rates

The UK’s Labour Government is considering a significant increase in tax rates on “higher harm” gambling products, including online casino games.

According to a report by the Institute for Public Policy Research (IPPR), the proposed tax hikes could generate between £2.9 billion in 2025 and up to £3.4 billion by 2030. These measures are part of Labour’s efforts to address a £22 billion budget deficit that Chancellor Rachel Reeves identified upon taking office.

Currently, gambling taxes are applied across seven categories of gambling products and services, contributing £3.3 billion in taxes in 2023. Excluding lottery duties, this figure drops to around £2.2 billion.

The IPPR’s proposal suggests maintaining the current tax levels for lottery and bingo, considered “lower harm” activities, while doubling the taxes on higher-risk activities, such as sports betting and casino gaming.

Proposed Tax Increases:

• Gaming duty: Increase from 15-50% to 20-60%
• Retail bookmaking: Increase from 15% to 30%
• Remote gambling (online): Increase from 21% to 50%
• Gaming machines duty: Increase from 5-20% to 10-40%

In its report, the IPPR explained:
“The duties we left unchanged (pools and bingo) are justified as lower harm, higher value parts of the sector. We propose higher duties on general betting and remote gaming due to their higher harm potential. This aligns with the ‘polluter pays’ principle and incentivizes companies to focus on safer products.”

Meanwhile, the Social Market Foundation (SMF), another think tank, is working on a more moderate proposal to raise the tax on online gambling from 21% to 42%, potentially generating an additional £900 million.

A report from The Guardian suggests that the proposed tax increases have not faced significant opposition and are expected to be included in the government’s upcoming budget on October 30th.

However, a spokesperson for the Betting and Gaming Council warned:
“Countries with harsh regulations and disproportionate tax regimes have experienced an increase in illegal black market gambling.”

UK Gambling Revenue Growth

In August 2024, the UK Gambling Commission reported that online gross gambling yield (GGY) for the first quarter of 2024-25 reached £1.46 billion, a 12% increase compared to the same period in the previous year. Sports betting revenue saw a 16% rise to £625 million, while land-based slots grew by 10% to £642 million. Retail bookmakers, however, reported a slight 1% decline in GGR, totaling £582 million for the period.