The chancellor has not ruled out raising taxes on gambling, as suggested by a thinktank that estimated it could generate £3.2bn for public funds and help lift 500,000 children out of poverty. The Institute for Public Policy Research (IPPR) proposed increasing taxes on online casinos and slot machines to fund the elimination of the two-child benefit cap. This proposal, backed by former prime minister Gordon Brown, has received criticism from the Betting and Gaming Council, citing concerns about driving punters towards the black market.
The chancellor has indicated that a review of gambling taxes is ongoing, with policies expected to be announced in the autumn budget. The IPPR recommends raising taxes on online casinos to 50% and on slots and gaming machines to 50%, along with increasing general betting duty on non-racing bets to 25%. These measures could potentially generate £3.2bn, covering the cost of removing the two-child benefit cap.
The two-child benefit cap, introduced in 2017 by the Conservative government, has affected 115,000 families, with an average financial impact of £60 per week. The IPPR’s analysis indicates that over 450,000 families are currently in poverty due to this policy, a number expected to rise to 550,000 by the end of the decade. The thinktank argues that raising taxes on the gambling industry is unlikely to reduce overall revenue for the Exchequer, as companies may adjust odds to maintain profits.
Henry Parkes, principal economist at IPPR, emphasized the profitability of the gambling industry and the need for it to contribute more, especially given the rising levels of child poverty. Progressive group 38 Degrees has launched a petition supporting the IPPR’s proposals, with Gordon Brown advocating for taxing the betting industry to support children’s well-being and education.
On the other hand, the Betting and Gaming Council opposes the tax increases, warning of potential negative impacts on consumers, jobs, and public finances. The council argues that such measures could drive individuals towards unregulated gambling markets, undermining consumer protection and tax contributions.
The government, facing pressure to address child poverty, has not ruled out revisiting the two-child benefit cap as part of broader measures to tackle the issue. Chancellor Rachel Reeves highlighted the government’s commitment to addressing child poverty and emphasized the ongoing review of gambling taxes.
In conclusion, the debate over raising taxes on gambling to fund social welfare initiatives remains contentious, with stakeholders advocating for both sides of the argument. The government’s decision on this matter is eagerly anticipated, as it will have significant implications for child poverty and the gambling industry.
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