‘Economically reckless, factually misleading’ – BGC ‘completely rejects’ proposals behind Gordon Brown’s tax calls

Key points:

– Brown referenced tax rates in the Netherlands, even though the Dutch regulator this week warned against high taxes that have ultimately lost the Government revenue

– BGC refutes IPPR proposals Brown based his calls on, branding them ‘economically reckless’ and ‘factually misleading’

– Gambling Insider provides its verdict

The Betting and Gaming Council (BGC) has “completely rejected” proposals put forward by the Institute for Public Policy Research (IPPR) that have once more called for a tax increase on UK gambling.

The IPPR claims “fairer gambling taxes” could raise £3.2bn ($4.3bn) in the fight against child poverty, backed by former UK Prime Minister Gordon Brown, who put forward his argument in The Guardian newspaper.

The BGC, however, has made its views clear. Its natural stance was always going to be in opposition, of course, but it has additionally called into question some of the facts presented in these proposals.

A BGC statement reads: “We completely reject the proposals by the IPPR, which Gordon Brown has based his calls for a drastic tax hike on, and which will only hit ordinary punters. These proposals are economically reckless, factually misleading and risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn’t protect consumers and contributes zero tax.

“BGC members contribute £6.8bn to the economy, generate £4bn in tax, while supporting 109,000 jobs. It’s also incorrect to suggest horseracing is taxed at a higher rate. General Betting Duty is 15% across all sports. Conflating the separate Levy with tax is misleading, as the Levy goes directly back into racing to support the sport.

“Further tax rises, fresh off the back of Government reforms which cost the sector over a billion in lost revenue, would do more harm than good – for punters, jobs, growth and public finances.”

What Gordon Brown said

Brown’s opinion piece was headlined “The gambling industry is a licence to print money. Tax it properly – and turbocharge the fight against child poverty.”

He wrote in The Guardian: “Having been invited to respond to the government’s consultations on both child poverty and gambling taxation – and following recent reports from the Social Market Foundation and the Institute for Public Policy Research (IPPR) – it’s clear that we can identify sources of revenues to fight the war against child poverty. The first step is raising billions by taxing the extraordinarily profitable gambling and betting industry, without affecting lotteries or bingo.

“Excluding the lottery, betting and gaming was an £11.5bn sector last year that incurred only £2.5bn in tax. As much as £3bn extra can be raised from taxing it properly. Remote gaming duty (effectively the tax on online slots games) is about 35% in the Netherlands, 40% in Austria, 50% in Pennsylvania and 57% in tax haven Delaware, two of the few US states where it is legal. Yet the same activity is taxed at just 21% in the UK, raising only £1bn. Applying a 50% levy – much less than the 80% tax on cigarettes and the 70% tax on whisky – would raise £1.6bn more.

“Gambling levies aren’t the only source of revenue that could pay to alleviate child poverty. But this should be one straightforward budget choice. The government can fulfil today’s unmet needs by taxing an undertaxed sector. Gambling won’t build our country for the next generation, but children, freed from poverty, will.”

The Gambling Insider verdict

As a former UK Prime Minister, Brown has been there and bought the T-shirt when it comes to battling budget deficits. He understands the difficulties involved in managing a national economy more than most – and not just any economy, one of the world’s foremost.

Unfortunately, however, the budget choice he proposes is not as “straightforward” as one suggests. Not its outcome, anyway.

Gambling is an easy target. It has social costs and political opposition around the world. The industry generates billions and its main benefit is that of entertainment, rather than education, health or anything similar that could be deemed essential.

But if taxes were raised on every industry that made money just because it yielded a profit, the world economy as we know it would simply cease to operate effectively. Yes, we have argued before that UK gambling companies could afford slight increases in tax. They still can.

Though here’s the kicker: the Netherlands tax rate (which is the very first Brown references in his argument) was only two days ago suggested to have lost the Dutch Government tax revenue by the Dutch regulator itself.

Indeed, the Netherlands Gambling Authority conducted an impact assessment of increasing the gambling tax rate from 30.5% to 34.2% on 1 January 2025, concluding that tax revenue had decreased as a result.

So how would a dramatic tixe rise for UK gambling help reduce child poverty in the UK – if there is credible evidence to suggest it could even lower tax revenue?

Ceteris paribus, the same results, revenue and industry setup with far higher tax rates would generate far higher tax revenue. But when you completely change the regulatory setup of an industry, it is no longer ceteris paribus.

The drastic increases backed by Brown (similar to those we saw last year) are not grounded in reality. The BGC team probably had its easiest task all year labelling the IPPR’s proposals “economically reckless and factually misleading.” Because that’s exactly what they are.