The UK Betting and Gaming Council (BGC) has warned that the government's proposed gambling tax increase could lead to an economic loss of up to £31 billion and the loss of up to 40,000 jobs. This forecast is based on a report written by Ernst & Young-Parthenon, commissioned by the BGC, which assesses the potential impact of various tax increase schemes on the industry and the economy. The government is expected to announce specific tax plans in the November budget, currently considering adjustments to general gambling tax, remote gambling tax, and machine gambling tax rates. Industry representatives are calling on the government to make prudent decisions to avoid pushing consumers towards the black market and harming employment and investment in the regulated market.
Tax Proposals and Potential Impacts
The UK government plans to announce a gambling tax adjustment scheme in the November budget, currently considering several proposals, including raising the general gambling tax (currently 15%), remote gambling tax (currently 21%), and machine gambling tax (currently 20%). The report written by Ernst & Young-Parthenon, commissioned by the BGC, points out that the tax increase could lead to an economic loss of up to £31 billion, an increase in illegal black market betting of £8.4 billion, and the loss of 40,000 jobs. Proposals from different institutions (such as SMF suggesting remote tax increase to 50%) all show that while tax increases may bring short-term revenue, they could stimulate black market expansion and reduce the total added value (GVA) of the industry in the long term.
Economic and Employment Risk Analysis
The report assesses the impact of tax increases through "central elasticity" and "higher elasticity" models. Even moderate tax increases (such as a 5% increase in all tax rates) could lead to a GVA reduction of £8.6 billion and the loss of 10,000 jobs; aggressive schemes (such as raising remote tax to 50%) could lead to a GVA loss of £31 billion and the disappearance of 40,000 jobs. Black market betting could increase by £8.4 billion, actually reducing government net tax revenue. The industry warns that tax increases will particularly impact retail betting shops, casinos, and bingo halls, triggering a wave of store closures, with operators like Entain and Flutter considering closing stores to save costs.
Industry Response and Policy Recommendations
BGC CEO Brinley Hurst states that the tax increase poses a "direct threat" to UK employment and economic growth, urging the government to establish a "balanced and stable" tax system to avoid undermining consumer protection mechanisms in the regulated market. The industry emphasizes that the UK gambling sector is a global leader, contributing significant tax revenue and employment, supporting sports investments, but policy uncertainty has already forced businesses to shrink their retail networks. The government needs to weigh the short-term tax revenue gains against the long-term economic loss risks, avoiding excessive policy fluctuations that push consumers towards unregulated, untaxed black market platforms.
