On October 29, 2025, the UK parliament’s Treasury Committee convened to discuss strategies related to gambling taxation and its implications on problem gambling. Carsten Jung, an economic policy expert from the Institute for Public Policy Research (IPPR), presented his insights, highlighting the insufficiency of tax hikes as a standalone solution to mitigate problem gambling.
During the session, the committee engaged with two panels of experts, with Jung serving as the acting interim associate director for economic policy at IPPR. In August, the IPPR had recommended a significant increase in gambling taxes, suggesting a rise in remote gaming duty from 21% to 50% and machine games duty from 20% to 50% of operator profits. This hike was projected to generate an additional £3 billion annually in tax revenue.
Jung explained to the committee that while higher taxes could potentially increase revenue, they might not effectively deter individuals from engaging in gambling activities. He articulated, “Gaming machines and remote betting are fairly sort of sticky. You can raise the tax more and raise more money, but it also means not everyone will be deterred by higher rates or poorer odds. And therefore, on its own, it’s not a sufficient policy to address problem gambling.”
This stance was further elaborated when Stewart Kenny, a former industry leader and co-founder of Paddy Power, contributed to the discussion. He argued that “higher-risk” gambling products should be subjected to higher taxes to discourage operators from shifting players from traditional sports betting to online casinos.
Addressing the potential impact of increased gambling taxes on black market activities, Jung dismissed the Netherlands as a relevant example. Earlier this year, the Netherlands implemented a tax increase, which reportedly resulted in a €200 million shortfall in tax revenue, as black market spending surpassed regulated gambling for the first time. Jung noted that attributing this solely to the tax hike is misleading, as multiple regulatory changes were introduced simultaneously in the Netherlands, complicating the situation.
He expressed confidence in the UK’s regulatory framework, stating, “Fortunately, we don’t have that in this country. We are much better and we’re seen as world leaders when it comes to tackling this sort of black-market site.” Furthermore, he cited Estonia as an example where lower taxes did not correlate with increased black market activity, illustrating the complexity and challenges in measuring such illegal operations.
In the second panel, the focus shifted to the potential impact of remote gambling tax increases on retail operations. Grainne Hurst, CEO of the Betting and Gaming Council (BGC), and Stephen Hodgson, BGC’s tax committee chair, addressed concerns that increased remote gaming duties could negatively affect high-street betting shops. According to Hurst, companies often operate under a unified profit-and-loss model, meaning that financial hits to the online sector could have a cascading effect on their retail counterparts. She warned that operators might need to reduce investments in other areas of their business if tax hikes were implemented.
The discussion also highlighted warnings from several UK operators who have indicated the possibility of closing high-street betting shops if faced with increased tax burdens. This potential outcome points to the interconnected nature of online and offline gambling sectors, emphasizing the need for a holistic approach in policy-making.
As the committee explored the complexities of gambling taxation, divergent opinions emerged. One perspective underscored the potential benefits of higher taxes in generating public revenue and, by proxy, funding initiatives aimed at curbing problem gambling. However, the opposing viewpoint cautioned against relying solely on fiscal measures, advocating instead for a balanced approach that includes comprehensive regulatory and educational efforts.
Ultimately, the debate within the Treasury Committee underscored the challenges in crafting effective gambling policies. While tax hikes could provide immediate fiscal benefits, their efficacy in addressing problem gambling remains uncertain. Experts like Jung suggest that a multifaceted strategy, integrating regulation, education, and fiscal policy, is essential to tackle the socio-economic impacts of gambling effectively.
As the UK government continues to navigate these complex issues, the insights from the Treasury Committee’s deliberations contribute to a broader understanding of how best to regulate the gambling industry while safeguarding public welfare. The path forward will likely require further consultation and collaboration among policymakers, industry stakeholders, and community advocates to achieve sustainable and equitable outcomes.
4.8/5
