MPs have urged the Chancellor, Rachel Reeves, to ignore “scaremongering” by gambling companies and push ahead with higher taxes on the most harmful products, as pressure mounts on the Treasury to extract more from the £11 billion industry ahead of this month’s Budget.
In a report published on Thursday, the Treasury select committee accused betting firms of hiding their most “insidious” and addictive products behind the veneer of traditional, lower-risk activities such as horse racing and seaside amusements. The committee said the Chancellor should focus new duties on high-street slot machines and online casino games, both of which have seen rapid growth since the pandemic.
The recommendations come as Reeves’s team finalises the 26 November Budget, with Treasury officials still weighing whether to harmonise gambling tax rates or target specific sectors. According to industry sources, the Chancellor is likely to favour a moderate rise, expected to raise between £1 billion and £1.5 billion, but she faces mounting political pressure to go further.
Calls for a tougher regime echo similar proposals from former prime minister Gordon Brown, who has backed a £3 billion increase in gambling duties to help fund the removal of the two-child benefit cap, and from influential thinktanks such as the Social Market Foundation (SMF) and IPPR.
The MPs’ report also criticised the Betting & Gaming Council (BGC) after its chief executive, Grainne Hurst, denied in a recent evidence session that gambling causes social harm — a moment the committee chair, Meg Hillier, described as “extraordinary”.
“You feel a moment in a room sometimes where everyone’s jaw drops,” Hillier said. “A couple of us pushed to ask if she was sure she was saying that. But she doubled down.”
The report linked the level of taxation directly to the risk of addiction, calling on the Treasury to adopt a more nuanced system that reflects the differing levels of harm across gambling products.
Currently, multiple duties apply to different types of gambling. Bets on horse racing and sports fall under general betting duty, levied at 15%, while casinos pay gaming duty ranging from 15% to 50%. Remote gaming duty, which covers online casino games, is charged at 21%, and machine gaming duty — governing high-street slot machines — sits at 20% for the most popular machines.
The Treasury has been considering whether to simplify and merge these rates, but the committee said doing so would be a mistake. Instead, MPs argued for higher taxes on the most addictive forms of play, a stance supported by both the SMF and IPPR.
Gambling firms have strongly opposed the prospect of new levies, warning that higher taxes could drive punters to unregulated black-market websites. The BGC claimed that a tax raid could ultimately reduce Treasury revenues and harm British sport, which relies on the sector’s sponsorship and funding.
The council has also cited a report by EY, commissioned by the industry, claiming that steep tax increases could cost 40,000 jobs and cut £3.1 billion from the economy. Betting chain Betfred, owned by former Tory donor Fred Done, has warned that it could close all of its 1,287 UK shops if taxes rise sharply.
However, the Treasury committee’s report questioned these claims, citing evidence from the SMF suggesting no strong link between higher duty rates and illicit gambling activity in international markets.
For Reeves, the decision on whether to target the gambling sector will be both fiscal and political. Labour’s manifesto commits to “protecting working people” while ensuring those with the “broadest shoulders” contribute more — a promise that leaves gambling, alcohol and other “sin” industries in the government’s crosshairs as potential sources of revenue.
With her second Budget less than three weeks away, Reeves faces a delicate balancing act: raising billions to stabilise the public finances without triggering job losses or backlash from industries already under pressure.
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MPs urge Reeves to raise gambling taxes despite industry ‘scaremongering’