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Economic Analysis Reveals Risks of Proposed Tax Increases
The Betting and Gaming Council has released findings showing that proposed increases to UK gambling taxes could have severe economic consequences, including the potential loss of £3.1bn in economic value and up to 40,000 jobs across the sector.
The warning arrives weeks before the UK government is scheduled to present new gambling tax proposals in the November 26 budget. While no final decisions have been announced, several proposals have emerged that would raise existing betting, gaming, and remote gambling duties.
The findings come from a report by consultancy EY-Parthenon, commissioned by the BGC and titled "Impacts of Changes to Betting and Gaming Regulation." The analysis examined multiple tax scenarios, including raising all three core duties: general betting, remote gambling, and machine gaming.
Analysis Shows Short-Term Gains Could Mask Long-Term Damage
The report found that aligning all tax rates at higher levels could increase government revenue initially but risks accelerating black market growth, which would reduce long-term tax receipts and employment.
The analysis estimated that aligning all duties at 21% would generate an additional £250m in revenue but could also increase black market betting by £400m. This shift could eliminate any tax benefit and result in the loss of nearly 3,000 jobs.
A more aggressive proposal from the Institute for Public Policy Research would increase betting and gaming duties to as high as 50%. Under this model, total gross value added would fall by £3.1bn, while job losses could reach 40,000 across the sector.
A separate plan from the Social Market Foundation to raise remote gambling duty to 50% and betting duty to 25% would generate an additional £1bn in tax under moderate conditions. However, under higher elasticity assumptions, the same plan could trigger £8bn in illegal market growth and more than 30,000 job losses.
Industry Leaders Respond to Tax Proposals
BGC CEO Grainne Hurst stated the findings demonstrate how tax increases would put the entire sector and its workforce at risk.
“Figures speak for themselves. Tens of thousands of jobs lost, billions diverted to the black market and a possible £3 billion hit to the economy.”
Hurst warned that such increases would impact betting shops, bingo halls, and casinos most severely, while driving more players toward unregulated operators.
“Tax raids like those proposed would mean fewer betting shops, casinos and bingo halls, fewer jobs and a huge boost to the growing, unsafe gambling black market, while not raising anywhere near the tax claimed.”
BGC Urges Government to Prioritise Stability
Hurst called on the government to prioritise stability and balance in any tax reform.
“These proposals would achieve the absolute opposite. Britain’s betting and gaming sector is a world leader – employing thousands, paying billions in tax, and investing in British sport. The choice is clear: back a successful, sustainable, regulated British industry – or risk losing jobs, investment and growth.”
Major Operators Signal Potential Retail Closures
Major operators have expressed similar concerns about the proposed tax increases.
According to a Sunday Times report, William Hill could close between 120 and 200 retail shops if tax rises proceed. Flutter Entertainment has announced plans to shut 57 Paddy Power outlets across the UK and Ireland, citing rising costs and economic pressure.
Entain CEO Stella David has indicated that additional closures may follow as companies seek to reduce expenses and offset higher tax burdens.
November Budget to Determine Sector’s Direction
As the UK Treasury finalises its plans, industry groups maintain that higher taxes would strengthen the illegal gambling market, undermining progress made in consumer protection and responsible gambling initiatives.
The November 26 budget will determine whether the government pursues growth through regulation or revenue through increased taxation. The decision will shape the future of Britain’s regulated gambling sector and its contribution to employment, tax revenue, and sports investment.
Source: Betting and Gaming Council
