Former UK Prime Minister Gordon Brown recently wrote in The Guardian, calling for an increase in gambling tax rates to raise more funds to address child poverty. He cited a report from the Institute for Public Policy Research (IPPR), stating that a "fairer gambling tax" could bring in an additional £3.2 billion in revenue for poverty alleviation. Brown referred to the higher gambling tax rates in the Netherlands as an international reference for tax increases.
However, the UK Betting and Gaming Council (BGC) has "thoroughly rejected" this proposal, calling it "economically reckless" and "factually misleading." The BGC stated in a declaration that these tax increases would hit ordinary gamblers, leading more people to unregulated black market gambling, harming consumer protection, and causing government tax revenues to actually decline. The BGC emphasized that the gambling industry contributes £6.8 billion to the UK economy, generates £4 billion in taxes, and creates over 109,000 jobs.
The BGC also clarified that all sports betting is uniformly taxed at 15%, and the notion that horse racing has a higher tax rate is inaccurate, as related taxes are directly used to support horse racing. The BGC warned that past tax reforms have already caused the gambling industry to lose over £1 billion in revenue, and further tax increases would further damage economic growth, employment, and public finances.
In his article, Brown stated that the gambling industry's turnover last year was £11.5 billion, with taxes only amounting to £2.5 billion. A reasonable tax increase could potentially raise an additional £3 billion. He also listed higher gambling tax rates in the Netherlands (35%), Austria (40%), and Pennsylvania, USA (50%), advocating for the UK to raise the current 21% remote gaming tax rate to raise more public funds.
Commentators believe that although Brown's budgetary intentions are good, the simple increase in gambling tax rates overlooks the complexity of the industry and regulatory realities. Recent assessments by Dutch regulators show that tax increases have led to reduced tax revenues, indicating that excessively high tax rates may push players towards the illegal market.
The BGC team concluded that the IPPR proposal is "economically reckless and factually misleading," not only failing to effectively address poverty issues but also potentially damaging the sustainable development of the gambling industry and national fiscal revenues.
