Proposed gambling tax hikes could cost 40,000 UK jobs and drive players to black market, new report finds
Summary
A new Ernst & Young (EY) report, commissioned by the Betting and Gaming Council (BGC), models the potential economic impact of the UK government’s proposed gambling tax changes ahead of the Autumn Budget. EY finds that raising the General Betting Duty (GBD) from 15% to 21% would raise an estimated £250m a year for the Treasury but could cut gross value added (GVA) by around £240m and cost between 2,800 and 4,700 jobs across the sector and its supply chain.
The report warns that more aggressive proposals from think tanks — such as the Social Market Foundation (SMF) and the Institute for Public Policy Research (IPPR) — could cause far larger disruption. EY models scenarios in which tougher rates could push tens of thousands of jobs at risk, divert up to £1.2bn of stakes into the black market for some measures, and substantially reduce net tax receipts once job losses and lower corporation tax and National Insurance are taken into account.
Key Points
- EY modelling: raising GBD from 15% to 21% could yield ~£250m additional revenue but cut GVA by ~£240m and cost 2,800–4,700 jobs.
- Black market risk: stakes migrating to unregulated markets could increase by £400m–£1.2bn under the GBD rise scenario.
- More extreme proposals: SMF suggestions (25% betting, 50% online gaming) might raise ~£1bn nominally but risk up to ~30,000 job losses and £3bn in lost economic value.
- IPPR plan (50% duties) projects large nominal revenues but EY says true net receipts could be ~£1bn — falling below £500m after accounting for wider economic impacts.
- Sector contribution: the gambling industry currently contributes ~£6.8bn to the UK economy, pays ~£4bn in tax and supports over 109,000 jobs.
Why should I read this?
Short version: if you care about jobs, town‑centre betting shops, consumer protections or how tax changes really translate into cash for the Treasury, this is worth five minutes. The report flags that big tax hikes could backfire — fewer legal operators, more illegal play, and less money actually reaching the public coffers. Yep, sounds like a policy own goal.
Context and Relevance
This discussion lands as the Labour government prepares its Autumn Budget (26 November). Policymakers face a trade‑off: boost nominal receipts from higher gambling duties, or protect a regulated industry that supports jobs and funds regulatory work. EY cautions that excessive rates risk driving consumers to unsafe, unregulated providers and shrinking the regulated market — which would reduce rather than increase net public revenue once second‑order effects are included.
For industry stakeholders, local economies and regulators, the findings are highly relevant: they inform debates around the scale of rate changes, likely behavioural responses from players and operators, and the wider economic consequences for tax receipts and employment. The report underlines that modelling must account for migration to the black market and lost tax take from closed businesses before any headline revenue figure is treated as secure.
