The UK Treasury is planning to simplify the tax system for the gambling industry to address the rapid growth of online gambling. Chancellor Rachel Reeves is facing strong pressure from MPs and think tanks to significantly increase gambling taxes, which could generate up to 15 billion pounds in revenue for the government.
Currently, the Treasury proposes a unified tax rate for remote gambling and online gaming, replacing the existing complex triple tax system. Although officials state that this reform is mainly to simplify the tax process rather than directly increase the tax burden, several cross-party MPs are seizing this opportunity to call for higher gambling taxes, especially targeting those activities that may cause social harm.
MPs believe that gambling companies should take more responsibility for their impact on society, and the increased tax revenue could be used to support child welfare and public health services. Former Labour Prime Minister Gordon Brown also publicly supports raising taxes to generate more public funds.
The think tank "Social Market Foundation" (SMF) suggests increasing the tax rate for remote gambling from 21% to 50%, raising the general gambling tax rate from 15% to 25%, and recommends lowering the tax rate on horse racing gambling to promote the healthy development of the industry. SMF also points out that some gambling companies avoid taxes by setting up offshore operations, hence the remote gambling tax should be more targeted and flexible.
However, the UK Gambling Commission warns that excessively high taxes could weaken the gambling industry's contributions to the economy, employment, and the sports industry. Currently, the industry supports over 100,000 jobs, with a net gambling revenue projected to reach 15.6 billion pounds in 2024.
The Treasury emphasizes that the focus of this tax reform is to reduce cumbersome regulatory procedures, not to directly adjust tax rates. Rachel Reeves must find a balance between addressing the fiscal deficit and maintaining the sustainable development of the gambling industry, which will be a key issue in the upcoming autumn budget.
