MPs warn gambling tax rises will fuel the harmful illegal black market

During a debate in the House of Commons this week, MPs warned that proposed changes to gambling duties will fuel the growth of the harmful gambling black market.

During the debate on the Finance Bill - which will introduce a near doubling of online gambling taxes - MPs across parties raised concerns about the impact of higher gambling taxes on Treasury revenues, warning that the further increases will damage the regulated sector while rewarding illegal operators.

The BGC has warned the Government that the gambling tax rises announced in the recent Budget will lead to job losses across both retail and online businesses, reduced investment on the high street and drive customers to the harmful black market, where there are no consumer protections, no safer gambling measures and no contribution to the public purse.

James Wild MP, Shadow Exchequer Secretary to the Treasury, warned of the unintended consequences of excessive gambling tax rises, saying:

“When taxes rise too far, behaviour can change and the yield can go down. Rather than reducing demand, activity will move to unregulated markets where consumer protections are weaker, fraud risks are higher, and tax revenue is not collected.”

Even the Treasury predicts a £500m increase in unlicensed activity and has allocated just £26m to counter it. That sum is a drop in the ocean given the scale of the threat, which this very Budget will accelerate.

Independent EY modelling makes the consequences clear. The Remote Gaming Duty rise alone could cost almost 15,000 high-tech jobs and displace over £4 billion in stakes to unlicensed operators. Higher sports betting duty risks another £2 billion moving offshore and a further 1,750 job losses. In total, nearly 17,000 jobs are at risk - many in regions that need investment most. More than £6 billion in stakes could be driven to the black market. These are not theoretical risks; they reflect the realities of a digital market where consumers can switch provider instantly.

Labour MP for Stoke-on-Trent Central, Gareth Snell also highlighted the risks identified by the Office for Budget Responsibility, stating:

“The report from the Office for Budget Responsibility states that there will be a drive towards the black market as a result of these taxation changes. That is much more damaging, will raise much less revenue and, ultimately, will be much more damaging to our economy.”

Concerns were also raised about the potential impact on charities and good causes, with MPs warning that many face a funding cliff edge as the statutory levy is rolled out. They stressed the importance of ensuring that changes to gambling taxation do not inadvertently undermine vital funding streams for charities that rely on a sustainable regulated gambling sector.

Caroline Dinenage MP, Chair of the Culture, Media and Sport Committee, said that she has "received very concerning reports that voluntary organisations in particular are facing a funding cliff edge, with delays and a lack of information about the transition to levy payments from the NHS" and called on the Minister to " act to ensure that no charitable organisation currently operating within the gambling harm prevention sector will have to fold due to delays with levy funding."

Grainne Hurst, CEO of the Betting and Gaming Council, added: “MPs were right to highlight the real-world consequences of further gambling tax rises which will result in job losses, shop closures and will drive customers towards the unsafe and harmful black market.

“The regulated betting and gaming industry currently supports 109,000 jobs across the country, contributes £4 billion in tax and plays a vital role in funding sport, charities and safer gambling. Undermining the sector with these further tax increases has handed a gift to the growing illegal operators who pay no tax and offer no protections.

“We urge the Government to take an evidence-led approach that supports jobs and growth, protects funding for charities and avoids rewarding the illegal and harmful black market.”