The UK government is considering increasing taxes on gambling operations once again to compensate for a budget deficit. With an estimated shortfall of £30 billion, lawmakers are under pressure to fill the void ahead of the next budget. Increasing gambling taxes is a possible solution until a more effective alternative is discovered.
UK Tax Hike: What Is Being Considered
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- Slow economic growth, rising costs, and policy reversals on energy and welfare have left a gaping hole in the government’s projected budget. An increase in traditional taxes is out of the question as it will put additional pressure on citizens.
- Online gambling operators in the UK pay less tax than international standards. British lawmakers plan to raise the stakes, matching those of other European coutries, such as Austria and the Netherlands.
- The Institute for Public Policy Research (IPPR) suggests that the additional gambling tax could fund the government’s future revenue requirements. Former British Prime Minister Gordon Brown supports the idea.
Gambling Tax Hike Could Potentially Fill the Budget Gap
The British Treasury is considering an increase in gambling taxes as it could raise revenue ahead of the next budget. Rachel Reeves, Chancellor of the Exchequer, claims that the government must raise £30 billion before the politically challenging budget, without raising VAT, income tax, or employee national insurance.
Considering the constraints, the government is considering alternative revenue sources and raising gambling taxes seems like the most obvious choice. It will fill the fiscal void without burdening the general population. Earlier this year, the government proposed streamlining and consolidating betting taxes.
Presently, betting taxes range between 15% and 21%. The updated tax regime may set a blanket rate closer to the current upper limit, in light of the financial pressure. The gambling industry is the most likely candidate for the tax hike due to its perceived political acceptability.
Unlike raising taxes on public welfare commodities and services, higher duties on gambling and betting are met with less public resistance, making them the ideal choice for policymakers. The timing of this tax hike is particularly notable as the British Treasury and the Gambling Commission are in the middle of a debate to unify three tax regimes.
What Lies Ahead for British Gambling Operators?
At present, gambling operators pay between 15% and 21% on the type of betting products they offer. The new duty revision is expected to replace this regime with a single, higher tax rate. The government initiated the consultation in April 2025, intending to simplify the gambling tax structure.
Experts had already predicted that any new tax hike would likely fall on the higher side of the price spectrum. This is not the first time that lawmakers have floated the idea of consolidating gambling taxes. The British treasury had been considering a £3 billion duty hike for quite some time.
The Institute for Public Policy Research’s (IPPR) report partially inspired this report. The IPPR had suggested a more aggressive tax hike, such as increasing the general betting duty from 15% to 30%, raising the remote betting duty to 50%, and taxing high-risk products more heavily as part of a harm-based scale.
While these suggestions were never formally recognised, they reflect the growing calls from advocacy groups in the UK to levy higher taxes to minimise the side effects of gambling. However, the suggestion has been met with strong criticism from betting operators.
The Betting and Gambling Commission (BGC) has strongly reacted to speculations of a tax revision. Grainne Hurst, the CEO of the BCG, said:
“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.”
The British Horseracing Authority (BHA) launched its “Axe the Tax” campaign to rally against the government’s proposed tax hike on remote gambling. The campaign states that the proposed duty reforms would weaken the financial sustainability of the sport and thwart future growth projections.