A potential double-digit tax hike on remote gaming duty and general gambling tax in the UK has sparked significant public interest and debate. According to a recent report by the Social Market Foundation (SMF), more than half of Britons support raising taxes on the gambling industry, particularly online gambling.

Public Sentiment on Gambling Tax Increases

The SMF’s findings reveal that 52% of respondents are in favor of increasing taxes on online gambling, with many advocating for a shift from the current 21% rate to as high as 50%. This proposed change could generate an estimated £900 million for the Treasury, contributing to efforts to address the UK’s £22 billion fiscal deficit.

• Key Survey Insights:
  • Two-thirds of respondents prefer gambling taxes to be prioritized over other tax increases, such as income tax, VAT, or duties on fuel and tobacco.
  • The public’s support indicates a growing awareness of the social implications of gambling and a desire for the industry to contribute more significantly to public finances.

The government’s interest in this tax hike aligns with public opinion, suggesting that the online gambling sector is under scrutiny not only from policymakers but also from the general populace.

Industry Response: Concerns Over Potential Consequences

The gambling industry has reacted strongly against the proposed tax increases, labeling them as unrealistic and potentially damaging. Industry representatives argue that such a significant hike could have dire consequences for the regulated market, jeopardizing jobs and inadvertently driving consumers toward unregulated black market operations.

• Industry Concerns:
  • A tax increase could undermine the competitive landscape, making it harder for legitimate operators to thrive.
  • The potential for increased black market activity poses risks to consumer safety and regulatory oversight.

The SMF’s report highlights that UK betting and gaming companies have historically benefited from lower tax rates compared to their counterparts in other jurisdictions. Dr. Aveek Bhattacharya, Research Director at the SMF, emphasized the need for a tax adjustment to better reflect the social and economic harm associated with gambling.

Aligning UK Gambling Taxes with Global Standards

The SMF’s research points out that some regions, particularly in the United States, impose significantly higher taxes on remote gambling. For instance, Pennsylvania charges a staggering 54% tax on remote slots, while New York has a 51% tax on sports betting. This comparison raises questions about the competitiveness of the UK gambling market and the fairness of its tax structure.

• Key Comparisons:
  • UK remote gaming duty currently stands at 21%.
  • Proposed increase to 42% could align the UK more closely with international standards.

The SMF argues that online gambling has a higher incidence of harm compared to other forms of gambling, further justifying the need for a tax increase. Additionally, the gambling sector is not subject to VAT, which adds another layer to the discussion about its financial contributions to the economy.

As the Autumn Budget approaches, the fate of the proposed tax hike remains uncertain. However, the growing public support for increased taxation on online gambling suggests that the government may be compelled to take action in response to both public sentiment and fiscal needs.