In a sweeping move, MPs on the Treasury Select Committee have urged Chancellor Rachel Reeves to raise taxes on gaming products and online casinos. The move comes as online casino revenue figures continue to grow. While the move is widely supported, not everyone agrees with it. However, arguments against it have tended to be a lot more nuanced. Proponents and supporters of the higher tax argue that it is commensurate with the industry’s effects and how much money it rakes in. 

However, many others feel that this is simply an emotional argument and not one that is based in fairness. For now, given the weight of support and the uphill battle faced by the iGaming industry to halt it, it appears to be a matter of when and not if.   

A Balanced Approach Would Be Better

In many ways, gambling has always been an easy industry for lawmakers to target. People overwhelmingly enjoy it wherever it’s offered and revenues are often massive as a result. Adding to this, public sentiment is often also easy to rile up. However, what many of these facts fail to consider is how much revenue could be lost in the process. To that end, it’s no secret that the gambling industry is already heavily regulated. 

Despite this, it’s also no secret that people still love online casinos. However, whereas the UK has an expansive market of local online casino providers, many players are choosing to play offshore these days. This is disconcerting given that many UK casino sites often come with superior safety records, features, and gaming libraries. This is down to the fact that the UK Gambling Commission is widely regarded as one of the best gambling regulators in the world. However, given how much the UKGC and lawmakers have slowly begun tightening the reins on online casinos, many feel this is causing too much gaming revenue to flow overseas. 

If that was the case before, the new proposal will likely only lead to a new exodus of operators who aren’t willing to be squeezed even more than they already are. To them, the position is clear. They are profitable in spite of harsh regulations, not because of them. To further tax them because they are doing well is tantamount to being punished for being successful. It also places an added financial and administrative burden that could see operators finding it difficult to reinvest or expand operations. 

These are just some of the reasons why many feel that a more balanced and nuanced approach is required. A one-size-fits-all approach fails to recognise that smaller operators may be priced out of the market entirely. As data from other markets show, larger operators are often better placed to grow profits. In such an ecosystem, only the sites backed by the largest conglomerates can compete. 

How The System Will Work

Traditional bets such as horse racing and sports remain taxed at lower rates, while online and slot-style gaming fall into higher-rate categories. Currently remote gaming duty in the UK stands at around 21% of gross profits, and machine gaming duty ranges up to 20% depending on the type. MPs say the system fails to reflect the different levels of engagement and frequency that online and high-speed products deliver.

The industry has pushed back. Representatives claim resets to tax rates might harm investment, reduce jobs and push consumers into unregulated spaces. They cite contributions to sport sponsorship and local employment when arguing against higher rates. Still, the committee, drawing on think-tank data, suggests tax rises could channel billions into public services. Some commentators believe the final increase may land between £1 billion and £1.5 billion in the upcoming budget cycle.

What the proposed changes would mean for UK tax policy

The current tax structure applies multiple rates across distinct product types. General betting duty (for sports and racing) sits at 15%, remote gaming duty at 21%, and gaming duty for land-based casino-style machines can reach up to 50% in some brackets. MPs argue that products with higher engagement and turnover deserve higher rates. They favour a more tier-based approach, though they oppose simply consolidating all rates. 

Fiscal analysts say revenue from gaming could rise significantly under the proposed system. The Social Market Foundation estimates that tax reform could generate up to an additional £2 billion annually. Some senior Labour figures, including Gordon Brown, believe gaming duty reform could help fund social initiatives. Meanwhile the industry warns that elevating rates too far could reduce regulated market participation and diminish tax take. The Treasury has yet to commit to final figures, and one minister described the debate as “ongoing”.

Reactions from industry, business and government

The Betting & Gaming Council responded to the report by arguing that raising taxes on the regulated sector will damage the economy. The council claims that its members contribute £6.8 billion to the UK economy and support more than 100 000 jobs. They also warn that tax hikes could erode funding that member companies provide to sports like horseracing, football, rugby and darts. In committee hearings members were asked to address whether their products cause societal harm. 

One hearing, chaired by Meg Hillier, highlighted industry resistance to recognising varying levels of risk across product types. However, many insiders point out that the UK appears to be tightening control while many emerging markets are seeking to expand their offerings.

In Westminster, the response has been firm. Committee members described recent industry arguments as “scaremongering” designed to block tax reform. Observers believe that any increase will need to balance revenue gain with maintaining the regulated market’s appeal. Government officials indicated that tax reform discussions will be central to the autumn budget. Final decisions are expected after further consultation that includes consumer groups, economists and industry stakeholders.

Implications for players and the regulated market

If higher taxes on certain gaming formats are introduced, business models may shift. Companies could adjust bonus structures, payment options or game portfolios. The regulated market may seek more focus on slower-play formats to maintain profitability under higher duty rates. Some firms already promote features like longer minimum intervals between rounds and transparent odds models to align with emerging policy signals.

For consumers the effect may be subtle at first. Online platforms will still aim to provide seamless service and mobile usability, although firms could revisit loyalty offers or introduce stricter wagering terms to maintain margin. Market competition remains high and many regulated sites compete on user-experience, payment flexibility and support services rather than purely on price.