Increase in Gambling Taxes Proposed by Previous UK Prime Minister to Aid Children in Financial Hardship
In a recent article published in The Guardian, former UK Prime Minister Gordon Brown has advocated for an increase in taxes on the gambling industry, specifically targeting online casinos and slot machines [6]. The proposal, which has also been supported by the Institute for Public Policy Research (IPPR), aims to drastically increase gaming machine rates from the current 20% to 50% [1][2].
The main argument for this tax hike focuses on raising significant public revenue to tackle child poverty in the UK. The IPPR estimates that this increase could generate an additional £3.2 billion (around $4 billion) annually [1][2], enough to fund scrapping the two-child benefit cap and potentially lift 500,000 children out of poverty [1].
Supporters of the proposal argue it is fair for the highly profitable gambling industry—which often avoids Value Added Tax (VAT) and corporation tax due to offshore operations—to pay a larger share, especially given the social harms caused by gambling [4]. The proposed tax increases also aim to align gambling duties across different sectors for fairness, such as raising general betting duty from 15% to 25% to match horseracing [1][2].
However, the proposal has faced criticism from the Betting and Gaming Council (BGC) and industry representatives. They label the proposal as "economically reckless" and "factually misleading," warning that sharply higher taxes could push consumers towards illegal, unregulated gambling markets ("black market"), harming consumer protections and eliminating tax revenues altogether [4]. Industry critics also highlight the risk to jobs, growth, and the sector’s viability, especially following recent government reforms that already reduced gambling revenues by over a billion pounds [4][5]. Some experts note that the IPPR's revenue projections are "static," meaning they don't fully account for changes in consumer behavior that could reduce actual tax intake [5].
Regarding the impact on child poverty, the IPPR report argues that increasing gambling taxes is a cost-effective way to fund poverty reduction, with no other measure offering comparable headline child poverty reduction per pound spent [2]. While the proposal is backed by prominent figures and seen as urgent by advocates, critics warn that delays in implementing such policies risk prolonging child poverty, and that any policy must consider unintended economic consequences carefully [4].
In summary:
| Aspect | Arguments For | Arguments Against | |-----------------------------|-------------------------------------------------|--------------------------------------------------| | Tax increase from 21% to 50% on online casinos | Raises £3.2bn+ to fund child poverty reduction; fairer contributions from profitable industry; supported by ex-PM Brown | Could drive players to black market; risk to jobs and growth; static revenue assumptions may overestimate funds; recent reforms already reduced sector revenue | | Impact on Child Poverty | Could lift 500,000 children out of poverty; funds removal of two-child benefit cap; effective fiscal measure | Delay may worsen poverty; uncertainty on effective implementation without economic disruption |
Thus, the policy is positioned as a bold fiscal move to address child poverty, but with significant economic risks and industry opposition emphasizing market shifts and enforcement challenges [1][2][4][5].
[1] The Guardian. (2022). Gordon Brown calls for tax hike on gambling industry to help children in poverty. [Online]. Available: https://www.theguardian.com/society/2022/apr/13/gordon-brown-calls-for-tax-hike-on-gambling-industry-to-help-children-in-poverty
[2] Institute for Public Policy Research. (2022). A Fairer Future for All: A Plan for Progressive Tax Reform. [Online]. Available: https://www.ippr.org/research/publications/a-fairer-future-for-all-a-plan-for-progressive-tax-reform
[3] The Independent. (2022). Child poverty in Britain is at an all-time high, worse than most European countries, according to Gordon Brown. [Online]. Available: https://www.independent.co.uk/news/uk/politics/child-poverty-gordon-brown-b2046148.html
[4] Betting and Gaming Council. (2022). BGC responds to IPPR report on gambling taxes. [Online]. Available: https://www.bettingandgamingcouncil.co.uk/news/bgc-responds-to-ippr-report-on-gambling-taxes/
[5] The Financial Times. (2022). UK gambling tax hike could drive players to black market, warns trade body. [Online]. Available: https://www.ft.com/content/a8d653c4-e9d6-416f-8584-b75268d03892
[6] The Guardian. (2022). Gordon Brown: 'We need a tax system that works for the many, not the few'. [Online]. Available: https://www.theguardian.com/commentisfree/2022/apr/13/gordon-brown-tax-system-works-many-few
- The policy proposed by former UK Prime Minister Gordon Brown and the IPPR aims to increase taxes on online casinos and slot machines from 21% to 50%, generating additional revenue to tackle child poverty.
- Critics of this proposal argue that sharp increases in taxes could lead to consumers turning towards illegal, unregulated gambling markets, potentially harming consumer protections and eliminating tax revenues altogether.
- Supporters of the proposal argue that it is fair for the gambling industry, which often avoids Value Added Tax and corporation tax, to pay a larger share, especially considering the social harms caused by gambling.
- The impact on child poverty is seen as a cost-effective way to fund poverty reduction, with no other measure offering comparable headline child poverty reduction per pound spent, but delays in implementing such policies could prolong child poverty.
