‘Higher gambling tax at last’

The Chancellor has finally delivered long overdue increases in gambling tax. This follows a flawed Treasury consultation that argued for the levelling, or “harmonisation,” of taxes on online  betting and gaming. 

Gambling taxes will be increased on gross profits for internet gaming and betting, other than for horse racing, as a partial protection measure for this sport, whereas land based gambling taxes remain similar.   

Gambling tax has long been a case study in UK policy failure. The most harmful forms of gambling should always be taxed higher, to stop operators steering gamblers towards more addictive products.  The Treasury has at least acknowledged this principle today, but if gross gambling revenues continue to rise it will show the new rates were set too low.

READ MORE: Budget: Almost all Labour members back levies on gambling and banking sector

These changes could easily have been introduced a year ago as both the SMF and the IPPR think tanks called for gambling tax increases in 2024. Gambling harms the wider economy by pulling money away from other trades, jobs and businesses, and has huge societal costs which also impact government services. 

Gambling marketing spend, including on affiliates, is estimated at around £2 billion a year. This outrageous amount fuels demand, creating more harm and addiction. Increased taxes should result in less marketing spend and therefore less harm.

The online gambling sector is largely offshored to minimise VAT and corporation tax liability. The VAT scandal, as exposed recently, must have been known to Treasury. How could political inertia have allowed this to happen? Labour campaigned on “Change”, but it now needs to accelerate that change within its own Treasury.

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It has been a hard fight to secure these tax changes against the sector and its powerful lobby, epitomised by the Sun’s “Save our Bets” campaign. Even as Sky Betting and Gaming was relocating to Malta to avoid tax, the parent company Flutter was arguing against tax increases. The privilege to profit from a gambling license in Great Britain does not yet require tax domicile in the UK. Tax avoidance has become business as usual for companies like Flutter. 

Those with financial skin in the online game routinely use social media to attack reform advocates, often using misleading assertions. These tactics are also used by company licensees and executives. No wonder that health professionals and academics want to expose how the sector truly operates.  

The Betting and Gaming Council has also been scaremongering that tax increases will result in black market growth. In fact, increased taxes is motivating government to better protect this income by providing extra funding to the Gambling Commission to tackle the black market.

This budget comes during Addiction Awareness Week where the Princess of Wales called for greater awareness of gambling harm and addiction, and the associated stigma. The new NHS Mens Heath plan was also introduced this month, including recognition of gambling as a health issue, in line with the 2024 Labour manifesto. 

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Nigel Farage opposes higher gambling tax, yet he has not opposed gambling companies offshoring to the EU. Reform UK defending Malta-based gambling companies that target the UK is not exactly in harmony with their ideology of UK sovereignty for economic benefit. Reform UK is not in line with the public, or even their own voters, on gambling.

Polling for LabourList shows that 97% of Labour members support higher gambling tax. If the Labour government aligns its policies with the wishes of its members, which often reflect the wider public, it will be better placed for the next general election.  

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