UK Considers Gambling Tax Hike to Fill Budget Gap

The UK Treasury is once again thinking about raising gambling taxes as a means of filling a large gap in public finances, according to The Observer.

Chancellor Rachel Reeves, who must come up with as many as £30 billion ($40.3 billion) in extra revenue, has already made it clear that increases to income tax, VAT, and national insurance are off the table.

In other words, the government is now forced to consoder different options to make up the shortfall.

Politically Acceptable Solution 

Sources suggest that raising gambling duties is being considered as one of the more politically acceptable ways to raise funds ahead of what’s expected to be a tough budget.

The gambling industry was already bracing for a potential tax rise after the Treasury launched a consultation in April to simplify and unify betting duties. 

Currently, the three main betting taxes range from 15% to 21%, and many observers believe the government is leaning toward setting the new unified rate at the higher end, given pressure on public finances.

It’s not the first time a wider tax hike on gambling has been floated. Before the Autumn Statement last year, The Guardian reported the Treasury had considered raising as much as £3 billion ($4.03 billion) from the sector. 

One idea came from the Institute for Public Policy Research, a left-leaning think tank, which proposed doubling the betting duty from 15% to 30%, and hiking the remote betting duty to 50%, based on a harm scale that would impose higher rates on riskier products.

It’s unclear what form a future rise might take, but industry groups have already voiced strong opposition.

BGC Dimisses “Fantasy Economics” Idea

Grainne Hurst, chief executive officer of the Betting and Gaming Council, dismissed the idea as “fantasy economics” driven by anti-gambling campaigners. 

“I want to be very clear with government: any further tax rises will not only slam the brakes on growth for our sector, but it will threaten jobs and completely derail horseracing,” she told NEXT.io.

The British Horseracing Authority has also spoken out against the proposed changes. Earlier this year it launched its “Axe the Tax” campaign, warning that unifying and raising remote gambling duties would harm a sport that relies heavily on betting revenues.

While the Treasury has yet to confirm any specific plans, the gambling industry is bracing for what could be another contentious budget season.