Labour officials have been warned that targeting gambling centres with higher levies would push people to move online where black market websites are “often accessed via VPNs”.
The government is widely expected to raise “sin taxes” at this year’s Autumn Budget following calls from former Prime Minister Gordon Brown and ex Labour donor John Caudwell to target gamblers.
But a think tank is leading calls for the government to avoid hiking taxes on adult gaming centres across the high street as it said companies’ profits had already declined by 23 per cent in the last seven years.
It also said centres paid higher fees on licensing and operating, contributing 80 per cent more than the highest alcohol licence.
Researchers pointed to a surge in online gambling, which has generated some £6.9bn since 2018, as evidence showing how Brits are rapidly turning to websites for gambling.
They also suggested black market websites sometimes accessed via VPNs offered higher payouts and fewer consumer protections, posing a health risk to Brits.
Risk of pushing people to offshore markets
The Adam Smith Institute argued that in-person gambling offered “stronger safeguards”, including no alcohol and self-exclusion schemes, and helped boost the UK economy through “less burdensome regulations” and job creation.
Its researchers joined up with another free market think tank, the Institute of Economic Affairs, to argue against reported plans to double the machine games duty to 50 per cent and equalise different levels of duties on gambling.
Christopher Snowdon, head of lifestyle economics at the IEA, said the government “seems intent” on directing gamblers towards offshore markets that limit government revenue in the UK.
Gambling tax debates heat up
Maxwell Marlow, who co-authored research on gambling levies, said Labour should resist hiking taxes on adult gaming centres.
“If the government wishes to treat gambling as a subject of public health, then adding higher taxes and regulatory hurdles to the safer forms of betting is irrational,” Marlow said.
“To raise its revenues, the government should revise and review its punitive treatment of adult gaming centres.”
The ASI’s report comes after the billionaire John Caudwell’s calls for Labour to hike taxes on online gambling as it led to “mayhem in society”.
He argued that an online gambling tax would raise up to £5bn while the progressive think tank IPPR, which conducted an analysis of how gambling levies could be raised, said around £3bn would be raised from extra gambling levies.
Caudwell also said extra levies should be added on alcohol and cigarettes, as well as carbohydrates.