Key Moments:
- Prime Minister Sir Keir Starmer has signaled potential support for scrapping the two-child benefit cap in the Autumn Budget.
- A proposal backed by over 100 Labour MPs and the Liberal Democrat Party seeks to lift remote gaming duty and slot machine duty to 50%, and general betting duty on non-racing bets to 25%.
- The gambling sector has expressed concerns that higher taxes may channel revenue toward unlicensed operators, citing the Netherlands as an example.
Child Poverty and the Gambling Tax Debate
Proposals from the Social Market Foundation and the Institute for Public Policy Research (IPPR) have called for increased taxes on the British gambling industry, suggesting that the additional revenue could fund the removal of the two-child benefit cap and thereby help reduce child poverty. The estimated cost for lifting the cap stands at £3bn, prompting speculation that increased gambling taxes could serve as a key funding source.
Political Support for Tax Increases
Prime Minister Sir Keir Starmer has not given a definitive answer regarding the tax proposal, but he has hinted that the government may take concrete steps to address child poverty in the upcoming Autumn Budget. Speaking to ITV, Starmer said: “We won’t have to wait much longer, but I wouldn’t be telling you that we’re going to drive down child poverty if I wasn’t clear that we will be taking a number of measures in order to do so.”
Former Prime Minister Gordon Brown has been vocal in favor of a significant tax hike. In an interview with Sky News, he said: “We tax cigarettes at 80 per cent, we tax alcohol at 70 per cent, but the online gambling tax is 21 per cent. So there’s a big case for change,” Brown said gambling operators “could well afford to pay a tax – and I want that money to go to child poverty.” He added: ”So, move the money from, if you like, the bad, by taxing it,” he said. “And put it to good, which is children taken out of poverty.”
The proposed tax adjustments have overwhelming support from more than 100 Labour MPs as well as the entirety of the Liberal Democrat Party.
Details of the Proposed Tax Hikes
| Category | Current Tax Rate | Proposed Tax Rate |
|---|---|---|
| Remote Gaming Duty (Online Casinos) | 21% | 50% |
| Slot Machine Games Duty | 20% | 50% |
| General Betting Duty (Non-Racing Bets) | 15% | 25% |
The IPPR has estimated that these measures could bring in an additional £3.2bn, which would be sufficient to fund the removal of the two-child benefit cap.
Industry Warnings and International Comparisons
Industry stakeholders have raised concerns that such tax increases could push players towards the unlicensed market, thereby undermining tax collections. The Betting and Gaming Council has pointed to the Netherlands, where, according to the regulator KSA, a gambling tax increase reportedly resulted in declining tax revenue.
- Author
Daniel Williams
