The UK government appears determined to press on with its plans to hike taxes for gambling operators despite warnings from industry leaders that such measures could harm jobs, drive players toward unregulated websites, and reduce funding for British sport. Lawmakers are considering a proportional system with higher taxes for more harmful types of gambling.

Online Gambling Can Be Especially Addictive

A  recent report from the Treasury Select Committee urged the government to resist what it described as “industry scaremongering” and to impose a tax rate that reflects the growing social harm from online betting games. The report comes just weeks before Chancellor Rachel Reeves presents her first Budget as the UK faces mounting pressure to address a sizeable fiscal deficit.

The cross-party committee, chaired by Dame Meg Hillier, stated that online gambling now constitutes almost half of the UK’s total gambling revenue. The report notes that while traditional betting, such as horse racing and bingo, can usually be enjoyed safely, online casino games and virtual slots have created a new generation of high-frequency, high-loss gambling.

Online betting games are extracting huge amounts of money from people who have been funnelled into the most addictive, harmful corners of the industry via their love of sports, or the occasional game of bingo.

The committee’s findings are based on months of evidence sessions examining how to strike a balance between tax policy, economic growth, and social responsibility. MPs dismissed arguments that higher taxes would push consumers toward unregulated operators, instead recommending harsher crackdowns against illegal offshore sites.

Gambling Operators Attempted to Downplay the Commission’s Concerns

Gambling industry representatives remain firmly opposed to any potential tax hikes. Grainne Hurst, chief executive of the Betting and Gaming Council (BGC), argued that regulated gambling is already one of the UK’s most heavily taxed sectors, contributing £4 billion ($5.27 billion) annually to the Treasury and supporting over 100,000 jobs. She cautioned that a tax hike could have rippling consequences for the broader economy.

Hurst also informed MPs that the industry invests heavily in safer gambling practices like affordability checks, stake limits, and data-driven monitoring systems. However, the Treasury Committee remained unconvinced. Its report criticized the industry’s claims that gambling caused no social harm and pointed out that gambling platforms exploit player data and behavioral patterns to encourage longer play and higher losses.

The impacts of problem gambling in our communities are plain to see, and the industry’s boldfaced claim to our inquiry that it does no social harm is staggering.

Reeves’s upcoming Budget could clarify whether online casino and slot games will face a higher tax rate compared to sports betting. Treasury sources have suggested that MPs are considering leaning toward a more graduated system based on the relative risk of harm. With the government showing no signs of yielding to industry pressure, the days of uniform gambling taxation may be numbered.