London, United Kingdom – Chancellor Rachel Reeves is facing mounting pressure as deliberations continue regarding potential tax increases on the gambling industry ahead of next month’s Budget. Industry representatives are warning that ample levies on betting and online slot machines could drive consumers towards unregulated, illicit markets, creating a “Black Market Britain.”

Potential Tax Increases Loom large

Sources indicate that the Chancellor is considering raising both the bookmakers’ levy,currently at 15 percent,and the online slots levy,presently capped at 21 percent. The increases are being explored as a means to address a growing shortfall in public finances. Insiders reveal that intensive discussions between major betting firms and Treasury officials have taken place recently, as the industry attempts to mitigate the impact of proposed policy changes.

The debate coincides with a Treasury Committee hearing scheduled for Tuesday,where experts including Paddy Power co-founder Stewart Kenny,former advisor Theo Bertram,and representatives from the Betting and Gaming Council will present their views on the implications of increased taxation.

Warnings of an unregulated Market

A key concern voiced by industry stakeholders is the potential for consumers to migrate to illegal betting platforms if taxes become excessively burdensome. This shift could eliminate vital safeguards and significantly reduce tax revenue for the government. according to a recent report by the Gambling Commission, over 2.5 million people in Great Britain are at risk of developing some form of gambling harm – a number that could increase dramatically with the proliferation of unregulated operators.

One industry source articulated the severity of the situation, stating that the proposed measures are “all to play for” and highlighting the potential for a substantial increase in illegal betting activities. Concerns are being raised that the Prime Minister’s wife, Victoria Starmer’s, known enthusiasm for horse racing could be leveraged to underscore the wide-reaching effects of the proposed changes.

Political Opposition and Economic Concerns

Shadow sport minister Louie French has sharply criticized the potential tax hike, characterizing it as “a disaster waiting to happen.” Economic analysis from EY suggests that such a move could exacerbate the black market, lead to widespread job losses within the regulated betting sector, and negatively impact overall public finances.

grainne Hurst,representing the Betting and Gaming Council,emphasized that increased taxes will “hand an enormous advantage to the unregulated black market,where there are no safeguards,no tax receipts,and no jobs.” She added that “every pound pushed into the black market is a pound lost to British businesses and the Treasury.”

This growth comes after Reeves assured business leaders last year that her administration would prioritize fiscal responsibility and avoid additional borrowing or taxation. However, the current economic climate suggests a change in approach may be unavoidable.

Tax Measure Current Rate Potential Increase
Bookmakers’ Levy 15% Undisclosed
Online Slots Levy 21% Undisclosed

Did You Know? The UK gambling market generated £14.4 billion in gross gambling yield in the year to March 2024, according to the Gambling Commission.

Pro Tip: For investors in the gambling sector, staying informed about evolving tax policies and regulations is crucial for assessing risk and making strategic decisions.