Labour MPs Call on Chancellor to go Deeper With Gambling Tax Rates

A group of 101 Labour MPs have written to the Chancellor to take a tougher approach to increasing gambling taxes. The MPs want to see Remote Gambling Duty (RGD) raised from 21% to 50%.

In a move instigated by MPs Alex Ballinger and Beccy Cooper, the letter was co-signed by more than half of the 235 Labour backbenchers. In it, they provided what they believe to be a “compelling” case to produce a targeted levy on “harmful gambling products”.

The letter has acted on previous calls made by former Prime Minister Gordon Brown and the Institute for Public Policy Research (IPPR). They both suggested that a significant hike in gambling taxes would go some way to winning the war on child poverty.

Scrapping the two-child benefit cap

Child poverty is driving the push for a tax hike among Labour MPs. Research carried out last month by the IPPR indicated that reforming gambling taxes could take as many as 500,000 children out of poverty.

Scrapping the two-child limit and benefit cap has been a priority for the government. This was emphasised by Ballinger, MP for Halesowen, who insisted children shouldn’t grow up in poverty while companies enjoy record profits.

In his letter to the Chancellor, he wrote: “Harms from gambling place a huge burden on public services, costing the Exchequer over £1 billion a year.

“It’s time to confront these excessive profits, reduce gambling-related harm, tackle poverty, and ensure gambling is taxed fairly.”

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Driving serious change

Addressing child poverty has been at the forefront of the gambling agenda, but there have been other notable figures bandied about in recent weeks. The IPPR noted that revising gambling taxes would raise £3.2bn to tackle this problem.

Apart from increasing RGD to 50%, proposals have been put forward to raise Machine Games Duty (slot and gaming machines) to 50%. It has been suggested, contrary to previous research, that lifting gambling tax rates wouldn’t impact on overall government revenues.

However, the Betting and Gaming Council (BGC) are among the high-profile opponents. They have been adamant that squeezing the gambling sector would push bettors closer to the unregulated black market.

Heeding international lessons

In their letter to the Chancellor, Ballinger and Cooper were quick to stress how the UK’s current gambling tax rate is lighter compared to other European countries. However, an increase in gross gambling revenues (GGR) in the Netherlands, for example, brought about a decline in government revenue.

In January, GRR in the Netherlands increased from 30.5% to 34.2%. However, the gambling regulator Kansspelautoriteit (KSA), released a report in August indicating the measure would see a €40 million drop in iGaming revenues.

This was in stark contrast to original government forecasts of a €100m rise in GGR for 2025. A further rise of GGR to 37.8% has been earmarked for January 2026, but this should act as a warning sign to the UK.

Chancellor standing firm on her plans

The Chancellor Rachel Reeves has been defiant on her plans for the gambling industry, and she faces difficult decisions in the coming months. Reeves was also invited to a gambling lobbyist event, but she insists all will be revealed in her Budget on November 26.

She said: “I didn’t need MPs or former chancellors to tell me to launch an enquiry into taxation.

“I did that as Chancellor, and I’ll set out plans on the taxation of gambling - and indeed other areas - in my Budget.”