A committee of MPs has advised the government to avoid yielding to pressure from the gambling industry regarding a potential increase in taxes on online betting games. Chancellor Rachel Reeves indicated that changes to tax rates for betting firms might be proposed in the upcoming Budget.
The online gambling sector now constitutes nearly half of the total industry revenue. Industry representatives have warned that raising taxes could lead to numerous betting shop closures and result in significant job losses. However, the Treasury committee’s report contends that the government should impose taxes on online betting that accurately reflect the associated societal harms.
While the committee acknowledges that some forms of gambling can be enjoyable and safe, it disputes the industry’s claim that gambling does not contribute to social issues. The committee noted that online betting could encourage addictive behaviors that provide no advantages to individuals, families, or communities. Dame Meg Hillier, the committee chair, mentioned that online betting is extracting substantial funds from vulnerable individuals.
In contrast, Grainne Hurst, chief executive of the Betting and Gaming Council, cited NHS data revealing that only 0.4% of adults fall into the category of problem gamblers. She emphasized that BGC members contribute £6.8 billion to the economy, generate £4 billion in taxes, and support over 109,000 jobs, while facing steep effective tax rates.
In the UK, winnings from gambling are not taxed, nor is value-added tax (VAT) applied to bets; however, the industry does pay several specific taxes. These include a 21% tax on online casino stakes, a 20% duty on gaming machines, and a 15% general betting duty on both sports and horse racing.
Reeves has expressed the need for gambling firms to contribute a more significant share of taxes. Additionally, nearly 25% of Labour MPs have signed a petition advocating for higher taxes on gambling companies to support welfare programs for larger families.
Industry leaders, including representatives from Flutter UK and Betfred, have warned that tax increases could have a detrimental impact, leading to job losses and a withdrawal from the high street. A Treasury spokesperson noted that such tax policy decisions fall under the Chancellor’s jurisdiction during fiscal deliberations, with recent consultations focusing on the growth of remote betting websites.
Source: https://www.bbc.com/news/articles/cglg586kwn6o?at_medium=RSS&at_campaign=rss