Higher gambling taxes would mean less poverty, less harm, and more fun
3 min read
Raising online gambling taxes would generate billions for public services, lift families out of poverty and reduce the widespread social harms caused by online gambling.
The wider public, like former Prime Minister Gordon Brown, is deeply concerned about child poverty. Brown, a former chancellor himself, argues Rachel Reeves can lift 500,000 children out of hardship through raising taxes on electronic gambling.
Citing an Institute for Public Policy Research (IPPR) report, he believes taxing gambling more could raise over £3bn, the cost of ending the two-child benefit cap.
This idea has gained traction across the political spectrum. Billionaire businessman and prior Tory donor John Caudwell wrote in the Financial Times this month that online gambling is linked with “mayhem to society” and said taxing it could raise up to £5bn.
Like all tax decisions, this must be thought through. My analysis suggests the sweet spot where tax maximises revenue – the “Laffer curve peak ” – is plausibly closer to triple its current rate of 21 per cent for online gaming, at over 60 per cent, and at around 40 per cent for online betting. That means the tax could easily deliver the £5 billion Caudwell asks for. The best performing land-based casinos, despite far higher running costs, pay gambling taxes above 40 per cent.
UK gamblers now lose more than £8bn a year online. Since 2000, more than £100bn has been lost online. This transfer of wealth from the poor to the rich, from the many to the few, and from onshore to offshore, has been a financial disaster for the UK.
Studies show that if the disposable income spent on gambling were directed to almost any other activity the economy would benefit more. Most leisure sectors create more jobs, support bigger supply chains, and raise more tax, especially VAT, which gambling avoids. Add in the negative economic and social costs of gambling harm, which the government conservatively puts at above £1bn, then the economic case for gambling collapses.
Labour’s manifesto declared gambling a health issue. Yet the Department for Digital, Culture, Media & Sport claims that growing the gambling sector can be done in tandem with reducing gambling harm. There is no supporting evidence for this theory. There is, however, clear evidence that when more people gamble, more people are harmed. How did the government get here?
There are many powerful voices against higher gambling tax, from politicians who accept trade hospitality to media companies profiting from gambling advertising. Many media outlets are themselves gambling affiliates. The billionaire Murdoch empire owns both the Sun newspaper and offshore Sun Casino and Sun Bingo, interests not mentioned in its pro-gambling trade coverage.
The Sun recently published an article in which I was attacked personally. In it, Louie French, the shadow gambling minister and Tory MP for Old Bexley and Sidcup, claims I seek to “ruin the fun of millions” by arguing for reforms.
But the truth is that if the over £100bn lost online had been spent elsewhere, millions could be experiencing less poverty, less mayhem, less harm, and having much more fun.
There will only be several months between the 26 November budget and the May 2026 local elections. The gambling sector will face a choice: fund the Tories, Reform, both, or neither. Whatever happens, MPs like French can be confident the offers of hospitality will continue.
Derek Webb is Founder of the Campaign for Fairer Gambling and a former professional poker player
