UK Considers Raising Gambling Taxes to Fund Child Poverty Measures
The fiscal debate over the gambling industry in the United Kingdom returns to the forefront. According to sources from Parliament and the think tanks Social Market Foundation (SMF) and Institute for Public Policy Research (IPPR), the Government is considering increasing gambling taxes to fund the removal of the child benefit cap, a measure aimed at alleviating the situation of more than 250,000 children living in poverty.
Removing the two-child limit on social benefits would cost approximately £3 billion, according to Treasury estimates. Faced with this budgetary challenge, the Executive’s economic advisors see the gambling sector as an underutilized tax margin.
During an interview with ITV News, Prime Minister Sir Keir Starmer stated: “I won’t have to wait much longer to announce it, but I wouldn’t talk about reducing child poverty if I wasn’t clear that we are going to act decisively to do so.”
Details of the fiscal proposal
The proposal debated in Westminster suggests the following adjustments:
- Online gambling tax (casinos): from 21% to 50%.
- Slot machine tax: from 20% to 50%.
- General tax on non-race betting: from 15% to 25%.
According to the IPPR, these changes would allow raising up to £3.2 billion annually, an amount sufficient to cover the total cost of removing the benefit cap and allocate part of the funds to family support programs.
Former Prime Minister Gordon Brown publicly supported the measure and compared gambling taxes with those on other taxed products:
“The tax on cigarettes reaches 80% and on alcohol 70%, while online gambling only pays 21%. There is room for change. Operators can contribute more, and that money should help lift thousands of children out of poverty,” he told Sky News.
Warnings from the gambling sector
The proposal has raised concerns in the industry. The Betting and Gaming Council (BGC) warned that such a high increase could weaken the competitiveness of the regulated market and push players towards unauthorized platforms.
The body recalled the precedent of the Netherlands, where a similar tax increase resulted in a drop in tax revenue due to players fleeing to the illegal market, according to data from the local regulator KSA.
“Raising taxes disproportionately can be counterproductive. The grey market grows when regulations and taxes cease to be reasonable,” said a BGC spokesperson.
Political and economic context
The debate comes at a time when the United Kingdom seeks to strengthen its public finances and fulfill the social commitments of the new Labour government. The gambling tax reform is emerging as a viable alternative to increase revenue without directly affecting the middle classes, although its impact on the private sector will be a subject of intense parliamentary debate.
The Autumn Budget, to be presented at the end of November, will confirm whether the gambling tax increase will be part of the Executive’s economic plan and whether it will materialize as one of the flagship measures to combat child poverty in the country.
Tags: UK, iGaming UK, UK online betting regulation, UK online betting taxes