The UK Treasury Committee recently released a report calling on the government to more clearly differentiate between physical and online gambling in gambling tax policy, and to adjust tax rates based on the level of harm. The report aims to provide reference for the autumn budget, highlighting the higher addiction risks of online gambling, and discussing the potential black market impact of increased taxes.
Report Background and Core Recommendations
After an investigation in October, the UK Parliamentary Finance Committee published a gambling tax report on Friday. The committee recommends that the Treasury impose higher tax rates on "high-risk" online gambling, ensuring that remote gambling taxes and machine gambling taxes are higher than traditional gambling taxes. The report points out that current policies have not fully reflected the different harms of various forms of gambling to individuals and society, urging the government to avoid industry pressure and tax according to the degree of harm.
Differences in Harm Analysis
The report emphasizes that gambling harms vary by type, for example, physical gambling in horse racing or arcades is less harmful, while online products like slot machines are more addictive due to their speed and ease of repeated use. Former industry executive Stewart Kenny supported taxing based on vertical harm during the investigation, noting that fixed odds betting terminals and online games are more harmful. The committee believes that taxes should reflect these differences to protect public interest.
Black Market Threat Controversy
In response to arguments that higher taxes could lead to an increase in black market gambling, the committee reviewed industry reports and academic studies, pointing out that gambling industry-funded reports may be biased. Another article in the "Journal of Harm Reduction" argues that taxation does not significantly drive consumption overseas. Kenny refuted the black market threat as "alarmist" and cited historical legislation to illustrate that similar concerns have not materialized. The committee recommends that the Treasury strengthen anti-tax evasion measures to prevent player migration.
Progress of Gambling Tax Reform
The discussion on gambling taxes began with a Treasury consultation in April, proposing to unify the remote gambling tax rate, replacing the current three-tier system. In August, IPPR suggested raising the remote gambling tax from 21% to 50%, and the slot machine game tax from 20% to 50%, expecting an annual increase of 3 billion pounds in tax revenue. Over 100 Labour MPs support the tax reform, and Chancellor Rachel Reeves stated that the gambling industry should pay a "fair share" of taxes, emphasizing a balance between economic contribution and tax responsibility.
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