Chancellor Rachel Reeves risks creating “Black Market Britain” if next month’s Budget sees significant tax raids on the gambling sector.
Industry insiders have warned of the potentially catastrophic impact on bookmakers and gambling firms if levies on betting and online slot machines are hiked in line with recommendations by former Prime Minister Gordon Brown.
The future of gambling taxes will be discussed on Tuesday in a Treasury Committee hearing featuring Paddy Power co-founder Stewart Kenny, former Tony Blair and Brown advisor Theo Bertram and figures from the Betting and Gaming Council.
City AM understands that a number of meetings took place between major betting operators and Reeves’s Treasury last week ahead of the 26 November Budget, where Reeves is expected to target so-called “sin taxes” to plug her growing financial black hole.
Black Market Britain
It seems almost inevitable that both the bookies levy – from 15 per cent – and the online slots levy – 21 per cent – will be raised with the gambling industry lobbying to keep the hike to a minimum. One source said it is “all to play for” in badgering the government to look kindly on the sector while another raised the alarm on illegal betting if the tax raid goes ahead, warning the nation could become Black Market Britain.
An insider said the industry would lean on the Prime Minister’s wife Victoria Starmer’s interest in horse racing between now and the Budget with the hope of demonstrating how widely the proposed changes would be felt.
Shadow sport minister Louie French said the raid on gambling is “a disaster waiting to happen,” adding that EY analysis suggests “Labour will further fuel the black market, thousands of high street shops and jobs in the regulated sector will be lost across the UK, and the Chancellor will create yet another black hole in the nation’s finances.”
Reeves tax rises
“Sin taxes” are expected to include a hike to the levy on bookies, while speculation surrounds further raids on income tax, property and middle earners.
Grainne Hurst of the Betting and Gaming Council said that the tax hikes “would hand an enormous advantage to the unregulated black market, where there are no safeguards, no tax receipts, and no jobs”.
“Every pound pushed into the black market is a pound lost to British businesses and the Treasury,” she added.
Last year, Reeves told businesses that she would not be “coming back with more borrowing or more taxes” after her first Budget as Chancellor saw announcements amounting to a near-£70bn increase in public spending.
French added: “This inexperienced Government is gambling with lives and livelihoods, and taxpayers will be left paying the price.”
The Treasury was approached for comment.