Following the conclusion of the UK Treasury’s consultation on betting taxation, speculation is rife that an increase in tax is set to be wielded on the gambling industry.
Tough economic times have left the Labour government looking to fill purse strings, with the struggle intensified by recent government U-turns on welfare cuts casting doubt on Keir Starmer and Rachel Reeves’ leadership..
Fears of the industry have been heightened as calls from lobbyists have intensified that the government should shift towards a single Remote Betting and Gaming Duty (RGBD).
The group argued against the principle of merging, or tax harmonisation, describing the current state of UK gambling tax as being ‘distorted by outdated rules and perverse incentives’, making the case that gambling tax should reflect the realities of the modern gambling industry.
According to the report, the maturing of remote gambling has led to it being less reflective of the tax system that represents it. The SMF has cited the differences in harm between different types of gambling as the main reason why change to taxation is needed.
It argued that ‘speed of play, the frequency of spins and bets, and the differences between the structural characteristics of content’, mean that players engage with iGaming in a completely different way to remote gaming and should there be taxed as such.
Currently, there are three types of gambling tax – Remote Gaming Duty of 21%, General Betting Duty of 15% on fixed odds betting, 10% on spread bets and 3% on financial spread bets; and Pool Betting Duty of 15%, which is applied to sports pools but not horse and greyhound racing.
Alex Ballinger MP stated: “The evidence is clear: some gambling products – like online slots – cause far more harm than others. These harms carry huge costs, from personal debt and family breakdown to rising pressure on public services. Our tax system should reflect this. It is not right that more harmful, low-employment sectors pay less tax than less harmful ones that bring greater social and economic value, like horse racing.”
He added: “Most importantly, this approach could raise up to £2 billion a year. That money could be spent on reducing child poverty or supporting the deprived communities that are targeted by gambling operators. These are smart, fair ideas that deserve serious attention. I encourage Ministers to take this report seriously and act on its proposals.”
Nonetheless, speaking to the Financial Times, Betting and Gaming Council CEO, Grainne Hurst, issued a stark warning that a tax hike would only serve to jeopardise the contribution of the industry when it comes to economic growth and jobs.
Upon the launch of the consultation, she urged the government to act with caution on shifting towards a single tax regime.
The group issued the following statement at the time of the consultation: “Any potential further increase in taxes on our members, so soon after a white paper which cost the sector over a billion pounds in lost revenue, will not raise more money for the Treasury.
“If General Betting Duty is raised to the same level as Remote Gaming Duty under one new tax. It would be catastrophic for Racing’s fragile finances.”
New APPG focus
The report comes just weeks after The All-Party Parliamentary Group (APPG) on Gambling Reform re-grouped to launch a new inquiry into the “Future of Gambling Regulation in the UK”.
It has been spearheaded by new APPG Chair, Sir Iain Duncan Smith MP, “to assess how the gambling industry should be reformed to prevent public harms.”
The Tory grandee has long campaigned for a root-and-branch overhaul of the Gambling Act and, alongside APPG members, remains unsatisfied with the recommendations outlined in the Government’s White Paper on gambling reforms.
Two years on from the White Paper’s publication, Duncan Smith continues to voice strong criticism of gambling advertising, the visibility of gambling to the UK public, the adequacy of online protections, and broader industry conduct.
He has also been openly critical of the UK Gambling Commission (UKGC), condemning its lenient approach to gambling licences—particularly in cases where operators have been fined multiple times for regulatory failings.
In a recent interview with BBC Radio, Duncan Smith commented on the lack of enforcement at Adult Gaming Centres on the high street: “Well, that’s reality on the ground … Nothing is enforced, therefore they don’t really care and so what you get therefore is that abuse taking place and nobody checks on it.”
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