Public backs online gambling tax raid as rumours of duty hike swirl

Hiking taxes on online casino gambling would raise the government as much as £900m and has the support of over half of UK voters, according to a report from an influential think tank.

The study by centrist think tank the Social Market Foundation (SMF), proposed a doubling of the rate of tax on online gambling, known as Remote Gaming Duty, from 21 per cent to 42 per cent.

Gambling online is linked to “higher rates of harm” that other areas of the sector, such as the lottery or betting at sports events, and was used by a particularly high proportion of problem gamblers, the paper argued.

The SMF’s proposals come after the IPPR, a left-leaning think thank, tabled even more aggressive framework for taxing the gambling sector, that centred around double taxes on industries that caused “higher harm”.

The IPPR’s model claims it could raise up to £2.9bn next year – and up to £3.4bn a year by 2030 – if implemented in full.

The SMF’s intervention also follow days of speculation over tax changes to the sector, after a report in the Guardian last Friday said that Treasury officials were considering raising as much as £3bn from a potential tax hike at the upcoming Budget.

The rumours sent shares in London-listed gambling firms plummeting yesterday, with the stock prices William Hill-owner Evoke and Ladbrokes owner Entain down 12 per cent and seven per cent respectively.

The SMF’s report also argued that the sector has been historically under-taxed. Unlike most other products and services, gambling does not attract VAT, it said, adding that many remote gambling operators avoid levies like corporation tax by basing some of their operations offshore.

Entain is based in the Isle of Man and Evoke is incorporated in Gibraltar.

There has been no major review of gambling tax for over a decade, despite previous administrations committing to carrying one out.

Dr Aveek Bhattacharya, research director at the SMF, said: “For too long, online gambling operators have profited from lower tax rates in the UK than many of our peer countries.

“Doubling remote gaming duty to 42 per cent would better reflect the social and economic harm they cause, and raise up to £900m for the public purse.”

But Chris Snowden, the head of lifestyle economics at the Institute of Economic Affairs, criticised the proposals, branding the report’s authors as “ideological opponents of gambling” who “do not have the best interests of the industry at heart”.

The SMF’s findings, however, have the backing of former casino entrepreneur and professional poker player Derek Webb.

Webb, who is a Labour donor, funded the report and has become a campaigner for tighter gambling regulation since stepping back from his former career.