Rachel Reeves, the UK’s new Chancellor, is facing criticism for her decision not to include an increase in taxes on online casinos in her first budget. This move brought worry among politicians and donors alike, especially because they see it as a missed opportunity to generate an estimated £900 million.
The proposed tax increase, which would have doubled the remote gaming duty (RGD) on online games of chance from 21% to 42%, was suggested by the Social Market Foundation (SMF) think tank and had gained support from the Liberal Democrats. These funds could have gone a long way in supporting crucial public services, such as health and social care.
Since casino apps and online gaming platforms continue to grow in popularity, with an ever-increasing number of casinos and slot games available in UK, some are questioning whether this decision was in the best interests of the public or influenced by other factors.
The Liberal Democrats, led by Treasury spokesperson Daisy Cooper, voiced particular disappointment with the Labour government’s choice to overlook this potential tax hike. Cooper pointed out that the 21% RGD rate is lower than in many European countries and other parts of the world, where online gaming companies face significantly higher tax rates. She said that by keeping the current rate, Labour is allowing large gambling companies to benefit while targeting other sectors, such as family farms and small businesses, with increased tax responsibilities. Ed Davey, leader of the Liberal Democrats, added that a tax increase on the online gambling sector seemed an obvious solution for a government serious about addressing societal issues.
One of Labour’s largest donors, Derek Webb, also expressed disappointment with the budget decision. Webb, a former casino game inventor who now champions campaigns for stronger regulation and increased taxation on gambling, emphasized that this was a missed chance to curtail what he called the “greed” of the online gambling industry. As Labour’s fifth-largest donor, Webb has consistently supported measures aimed at introducing tighter controls on the sector. He noted that Labour’s decision not to act could reflect prioritization of the gambling industry’s interests over broader public support, which polling shows to be in favor of increased gambling taxes.
The Labour Party’s connection to the gambling industry is not new and has come under scrutiny in the past. Some have pointed to the substantial financial support Labour has received from figures tied to the gambling world. The Coates family, owners of Bet365, have donated significant sums to Labour, including contributions to Keir Starmer’s leadership campaign. Rachel Reeves herself has received donations for her constituency office from industry figures such as Richard Flint, former CEO of Sky Betting & Gaming, and Neil Goulden, a former director of Gamesys. Reeves has also mentioned a long-standing friendship with Michael Dugher, former Labour MP and current head of the Betting & Gaming Council (BGC), a major lobbying group for the gambling industry.
Grainne Hurst, the CEO of the BGC, expressed support for the government’s decision, saying that a tax increase on the online gambling sector at this time would have hurt consumers and industry growth. She warned that higher taxes could potentially drive consumers toward unregulated, unsafe markets and applauded the government for rejecting what she called “anti-gambling prohibitionist” demands. Hurst maintained that the current tax rates strike the right balance, benefiting both players and the industry without forcing players into riskier, black-market alternatives.
