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The UK Treasury is once again reviewing plans to increase gambling taxes, as the government seeks new revenue sources ahead of an upcoming budget. The move could have major implications for the betting and gaming industry, especially as it comes on top of already proposed changes to the gambling tax framework.
Gambling tax increase under consideration
According to The Observer, the UK government is weighing a tax hike on the gambling sector as one of the more politically viable ways to raise up to £30 billion in public funds. Chancellor of the Exchequer Rachel Reeves has ruled out raising income tax, VAT, or employee national insurance, forcing the Treasury to consider alternatives.
The gambling industry has emerged as a possible target due to its perceived political acceptability. Unlike consumer-facing taxes, higher duties on betting firms are often met with less public resistance, making them an attractive option for policymakers.
Existing reform already in motion
The timing of this review is particularly notable, as the UK Gambling Commission and Treasury are already in the middle of consultations to unify three existing betting duties. Currently, gambling operators pay between 15% and 21% depending on the type of product. These are expected to be replaced by a single, higher rate.
The consultation, launched in April 2025, is aimed at simplifying the tax structure while increasing state revenue. Analysts had already predicted that any new unified rate would likely fall at the higher end of the existing range.
Earlier proposals were more extreme
This is not the first time such ideas have been floated. In late 2024, The Guardian reported that the Treasury had been considering a £3 billion tax hike on gambling firms. This proposal was partly inspired by a report from the Institute for Public Policy Research (IPPR).
The IPPR had proposed a more aggressive model, including:
- Raising the general betting duty from 15% to 30%
- Increasing the remote betting duty to 50%
- Introducing a harm-based scale, taxing high-risk products more heavily
While these suggestions were never formally adopted, they reflect growing calls from advocacy groups to use the tax system to reduce gambling harm.
Industry backlash and political pressure
The Betting and Gaming Council (BGC) has responded strongly to renewed tax speculation. BGC CEO Grainne Hurst told NEXT.io:
“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 added that further tax rises would threaten sector growth, risk thousands of jobs, and potentially “derail horseracing”, which relies heavily on gambling revenues.
In parallel, the British Horseracing Authority (BHA) launched the “Axe the Tax” campaign to oppose tax hikes on remote gambling. The campaign argues that the proposed reforms would weaken the financial sustainability of the sport.
What’s next?
The Treasury’s commitment to simplifying the gambling tax structure remains. However, it is unclear whether a broader tax increase will be bundled into that simplification.
As the budget deadline approaches, all eyes are on how far the government is willing to go to extract revenue from the industry, without stifling investment or growth.
Source: NEXT.io
