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In a report published Thursday, the cross-party committee accused betting firms of hiding their most addictive products behind traditional, lower-risk gambling activities such as horse racing and seaside arcades. The MPs urged the government to recognize that different types of gambling inflict different levels of harm and to adjust taxation accordingly.
Committee Challenges Industry Claims on Social Harm
The Treasury Select Committee rejected the gambling industry’s assertion that betting causes no social harm, with committee chair Dame Meg Hillier describing one recent evidence session as “extraordinary.”
“Whether at a local racetrack or a seaside arcade, for many people, gambling is a fun pastime enjoyed with family and friends. But we heard that the industry is hiding its more insidious parts behind the friendly facade of its traditional, cultural forms.”
She continued:
“The impacts of problem gambling in our communities are plain to see, and the industry’s boldfaced claim to our inquiry that it does no social harm is staggering. Online betting games are extracting huge amounts of money from people who have been funnelled into the most addictive, harmful corners of the industry via their love of sports, or the occasional game of bingo.”
The committee specifically criticized Betting & Gaming Council chief executive Grainne Hurst for denying that gambling causes social harm during a recent evidence session. “You feel a moment in a room sometimes where everyone’s jaw drops,” Hillier said of the exchange.
Online Gambling Dominance Grows
The committee’s report highlighted the rapid shift toward online betting in recent years. The proportion of gross gaming revenue associated with remote gaming has risen from 12% in 2014 to 44% in 2024, reflecting the sector’s accelerated growth and dominance in the UK gambling market.
Online betting can lead to harmful, addictive, high-frequency gambling that brings no benefits to people, families and communities, the committee stated. The MPs called for the government to tax online betting games at a rate that reflects the level of harm they inflict.
Revenue Projections and Political Pressure
The recommendations come as Reeves’s team finalizes the November 26 Budget, with Treasury officials weighing whether to harmonize gambling tax rates or target specific sectors. According to industry sources, the Chancellor is likely to favor a moderate rise expected to generate between £1 billion and £1.5 billion in additional revenue.
However, Reeves faces mounting political pressure to go further. The Institute for Public Policy Research estimates that the government could raise an additional £3.2 billion annually by increasing taxes on online gambling, physical slot machines and sports betting.
Former Prime Minister Gordon Brown has backed proposals for a £3 billion increase in gambling duties, suggesting the revenue should fund the removal of the two-child benefit cap. More than 100 Labour MPs previously signed a letter supporting higher gambling taxes to address child poverty.
Industry Response and Black Market Concerns
The committee heard evidence both supporting and challenging the gambling industry’s concern that increased taxation could drive customers to illegal operators. In response, the MPs recommended that the government examine how to tackle black market gambling and consider whether additional anti-avoidance measures are needed.
“It’s not scaremongering to suggest tax rates of 50% on machine games and online games such as bingo – as demanded by the IPPR – could have a significant impact on the industry, jobs and investment.”
A spokesman for Flutter UK and Ireland, whose brands include Paddy Power, Sky Betting & Gaming, Sportsbet and Tombola, provided this response.
Chancellor’s Balancing Act
For Reeves, the decision represents both a fiscal and political challenge. Labour’s manifesto commits to “protecting working people” while ensuring those with the “broadest shoulders” contribute more, placing gambling, alcohol and other regulated industries in the government’s crosshairs as potential revenue sources.
With the Budget less than three weeks away, Reeves must balance raising billions to stabilize public finances without triggering job losses or backlash from industries already under pressure. The Chancellor has previously stated she believes there is a case for gambling firms to pay more and committed to ensuring operators “pay their fair share of taxes.”
The committee called for evidence on gambling taxation as part of a series of sessions examining decisions facing the Chancellor in the 2025 Budget.
Source: UK Treasury Select Committee
