As the November’s Autumn Budget is fast approaching, so are rumors swirling that Chancellor of the Exchequer, Rachel Reeves, might take a firmer stance on gambling and raise the levies that the industry is already paying.
Autumn Budget another chance to tax riskier verticals in gambling
A letter led by Dr Beccy Cooper and Alex Ballinger, and more than 100 of their colleagues, from the Labor Party, is calling for the Autumn Budget to include a targeted levy on harmful online gambling products, and opposes the idea of harmonizing the levy as there are differences between the activities.
The letter seeks to single out specific activities that its signatories believe are exploitative and pose a higher risk of gambling-related harm. The letter acknowledged the measures already put forward by the HM Treasury, but it believes that there is a mismatch between the proposal and the intended results:
"We note that the core proposal of HM Treasury’s recent consultation on the tax treatment of remote gambling is to merge General Betting Duty, Pool Betting Duty, and Remote Gaming Duty into a single Remote Betting and Gaming Duty (RBGD). However, the consultation’s focus on structural uniformity risks overlooking the substantial differences between gambling products and their associated harms. The proposal we write to recommend takes a different approach."
The issue argues the letter is that not all activities can be treated the same, and doing so fails to reflect well-established differences when it comes to the risk and harm each activity entails. By levying every product the same way, lower-risk products may struggle to maintain their operations, pushing consumers offshore, the signatories argue.
Notably, the UK currently taxes some of its riskiest activities at a much lower rate than other jurisdictions do, speaking about online casinos and sports betting in particular.
Levy harmonization is not the best approach, warns Labor MP
Drawing experience from the United States, Austria, France, and the Netherlands, the letter argues that online gambling in the UK is taxed lightly, and that the time to step up is now.
"We note that the Institute for Public Policy Research (IPPR) Commission on Health and Prosperity proposed raising Remote Gaming Duty from the current 21% to around 50% and increasing General Betting Duty from 15% to approximately 30%. IPPR estimated that these combined reforms could raise approximately £2.9 billion in the first year, rising to around £3.4 billion by 2030," the letter added, acknowledging alternative suggestions.
However, the letter also supports the British horseracing industry, arguing that it is important culturally and historically, and seeking to raise the tax on the industry as part of a harmonized levy would not only undermine it without achieving the desired results.
"An online gambling levy - calibrated to reflect both profit and harm - offers exactly that: a credible, fair, and immediate source of revenue. It would signal a government serious about aligning fiscal responsibility with social justice, and committed to tackling poverty not just with words, but with action," the letter wraps up, urging action in the Autumn Budget.
