Labour MPs call for UK gambling tax hikes to fund child benefit changes

Labour MPs call for UK gambling tax hikes to fund child benefit changes

Summary

More than 100 Labour MPs have written to Chancellor Rachel Reeves urging significant tax rises on online gambling products so the proceeds can be used to abolish the two-child benefit cap. The cross-party push draws on research from the IPPR and campaigners who say a targeted levy on high-harm gambling products could raise around £3.2bn in 2026/27, enough to remove child and household benefit caps and help lift an estimated 500,000 children out of poverty. The MPs argue gambling firms have seen big sales growth while contributing relatively little in jobs or tax, and they propose steep duty increases on slots, poker, bingo and certain machine games, with potential protections for horse-racing betting.

Key Points

• 101 Labour MPs signed a letter urging Chancellor Rachel Reeves to raise gambling taxes and scrap the two-child benefit limit.
• The APPG on Gambling Reform and IPPR recommend raising Remote Gambling Duty, Machine Games Duty and General Betting Duty substantially (eg. Remote Gambling Duty 21% to 50%).
• IPPR estimates the proposed hikes could raise £3.2bn in 2026/27, potentially lifting 500,000 children out of poverty by removing benefit caps.
• MPs say many betting firms pay little tax, employ relatively few people in the UK and sometimes locate operations offshore to reduce tax bills.
• Horse-racing betting is likely to be protected or treated differently, and industry bodies warn tax rises risk boosting the black market and harming jobs, investment and sports funding.

Content summary

The Labour letter, backed by members of the APPG on Gambling Reform, sets out a case for targeted taxation of online gambling products that are linked to higher harm. Signatories argue that gambling-related harms cost the Exchequer over £1bn a year and that the industry’s growth has not translated into proportional public benefit. The IPPR’s modelling underpins the MPs’ ask, showing steep duty increases could fund the removal of both the two-child benefit cap and the household benefit cap.

Rachel Reeves has said the proposals are “on the table” and will outline taxation plans in her 26 November budget; she previously ordered a consultation on simplifying betting taxation into a single rate. The Betting and Gaming Council strongly opposes the hikes, citing economic contribution and risks of expanding an unsafe black market. Meanwhile, campaigners and some industry figures have discussed protections for horse-racing and differentiated treatment for lower-harm products.

Context and relevance

This development sits at the intersection of social policy and regulatory reform: it links revenue-raising from a controversial industry with an immediate social-policy objective (ending the two-child cap). The proposal follows sustained campaigning by politicians and activists and comes at a politically sensitive time—the chancellor will set out plans in the autumn budget. For the gambling industry, operators and investors, it signals a potential material shift in the tax and regulatory landscape; for social-policy stakeholders it represents a viable funding route to remove benefit caps.

Why should I read this?

Because if you care about UK politics, social policy or the iGaming sector, this could change where money comes from and who pays. Quick: MPs want to force big gambling firms to stump up cash to end a child benefit rule that campaigners say traps kids in poverty. It’s politically charged, could raise billions and will be on the chancellor’s budget agenda. Worth a scan if you want the short version without wading through all the briefings.

Source

Source: https://next.io/news/regulation/labour-mps-call-uk-gambling-tax-hikes/