The government is sending signals that tax rises for the gambling industry are coming. Caving into pressure from backbench MPs, Rachel Reeves said gambling firms should “pair their fair share of taxes” – so how does the extra £100m being taken this year for the Statutory Levy figure into the chancellor’s equation?
Chancellor of the Exchequer Rachel Reeves has suggested she is prepared to increase taxes on gambling companies to help fund measures tackling child poverty.
Speaking to ITV News on Monday, Reeves remarked: “I do think there’s a case for gambling firms paying more. They make an important contribution to the economy but they should pay their fair share of taxes and we’ll make sure that that happens.”
Her comments point towards a potential move to scrap the current cap on benefits for parents, a policy that has been criticised for exacerbating child poverty rates across the United Kingdom.
The Institute for Public Policy Research argued in a recent report that higher levies on high-stakes online gambling could provide sufficient revenue to address this issue. According to its estimates, such a change could generate approximately £3.2bn annually. That sum, the think tank suggested, would be enough to end the benefit cap, which has been the focus of growing political debate.
The proposal has won notable support, including from former Labour Prime Minister Gordon Brown, and Reeves appears to have been swayed despite warnings from the industry that increased taxes will devastated horse racing and turbocharge the black market.
Shares in UK betting firms take a tumble as tax rumours abound
Shares in major UK betting firms fell sharply on 30 October, following Rachel Reeves’ suggestion the government may increase taxes on the sector.
Appearing on ITV News, the Chancellor said gambling firms “should pay their fair share,” prompting investors to lose confidence in the industry’s largest names.
“Among the affected companies, betting firm Evoke saw the steepest decline, falling 1.5 percent as of 09:07 GMT, making it one of the top losers on London’s small-caps index, which was down 0.09 percent,” reported financial journal Investing.com.
“Other gambling stocks also traded lower, with Entain dropping 1.08 percent and Flutter declining 0.5 percent.”
Speaking on the response, David Brohan, gaming and leisure analyst at stockbrokers Goodbody, said “media speculation has been rife on potential tax increases for months, and we think most investors are expecting some level of tax increase as likely in the upcoming budget.”
