Thank you for writing and asking me to attend a drop in event on the 5th of November on gambling. While I was unable to get to that particular event due to a full parliamentary schedule that day, I am very aware of the issues you have raised in your email.
There was a Westminster Hall debate on this topic held on the 2nd of December and I have provided the link to the full transcript here for your interest:
Gambling: Regulatory Reform - Hansard - UK Parliament
You are no doubt aware of the proposed changes to gambling regulations in last week’s Budget, when the Chancellor announced that the duty on remote online gambling will increase from 21% to 40%, starting next April. I There was also a change to online sports betting duty, from 15% to 25% from April 2027.
Speaking in the debate in Westminster Hall, the Minister for Creative Industries, Media and Arts, said:
"We have introduced those increases in gambling duties to reflect the way in which the sector has gone and to support our public finances”
However, Louie French MP pointed out that,
Regulation of gambling must be a careful balance to avoid unintended consequences.
Each month, more than 20 million people across the country safely place a bet, but for a minority of people it can also become a serious problem. In the new digital landscape, regulation must strike the correct balance between protecting consumer freedoms and protecting the vulnerable from harm.
The Government's decision to increase gambling duties is risking serious adverse consequences. For example, analysis has found that 16,750 high tech jobs could be lost in the online sector. Moreover, it is estimated that £6 billion in stakes will be lost to the black market, resulting in a projected 140 per cent increase in the size of the black market. While the legal, well-regulated market has strong safeguards in place to identify and protect problem gamblers, the black market has none.
Louie French MP shared the example of the Netherlands to illustrate this, saying
“At the start of this year, the Dutch Government raised their gambling tax on gross gaming revenue from 30.5% to 34.2%—a much smaller rise than that which this Government have announced, with another rise planned. The Dutch Government combined it with much tighter restrictions, strict spending caps, deposit limits and sweeping advertising bans. Within months, the Netherlands has seen regulated gambling revenue collapse by around 25% and tax receipts fall significantly, despite the higher rate, which has left a €200 million shortfall. The percentage of gamblers using regulated sites dropped below 50%, and the Dutch regulator itself reported that illegal gambling sites now receive more visits than regulated ones, with searches for the “100 best illegal gambling sites” surging.”
“That is the reality of the situation in a comparable European country. Over-regulation and excessive taxation have driven gamblers to the black market. We can see the same pattern developing here in the UK, with even the OBR highlighting that the black market will gain from those tax choices.”
If the social and behavioural change caused by regulation and taxation pushes more people into the black market, we must recognise that consequence. I understand the Treasury has allocated £26 million to the Gambling Commission to try to prevent an estimated £500 million reduction in tax yield through leakage to the black market.
Furthermore, while the Government has attempted to exclude racing from the Chancellor's taxes, it is still likely to suffer. Horse racing accounts for 29 per cent of online betting gross gambling yield. A tax rise on the industry, even with the exemption for racing, will inevitably reduce the betting industry’s contribution to racing as costs are cut across the sector including on marketing, sponsorship and promotions. In fact, I understand some sponsors are already re-evaluating their sponsorship of various events. This not only risks the future of racecourses and horseracing, but also jeopardises the livelihoods of those that depend on them.
The last Government, after reviewing the existing gambling regulation, set out sensible and proportionate reforms to bring regulations in line with the digital age. For example, it introduced new stake limits for online slots games, associated with large losses and long sessions; background checks to protect those most at risk; and rules to prevent bonus offers including free bets from harming vulnerable people. The current Government seems to not have taken the same sensible approach to measures and failed to correctly consider the impact.
Regarding advertisements for gambling, it is clear that gambling advertising can have a disproportionate impact on particular groups, such as people who are already experiencing problems, and that some aggressive advertising practices can exacerbate harms. Measures are already in place to prevent this, and the Gambling Commission’s new rules prevent direct marketing from being targeted to those showing strong indicators of harm. Furthermore, the Committee of Advertising Practice has implemented strengthened protections for adults vulnerable to gambling harm.
The gambling industry adds £6.8 billion to the UK economy, pays around £4 billion in tax, and supports over 109,000 jobs across the country. We believe this Government's decision to increase taxes risks job losses, damages the economy, and will drive billions into the gambling black market. I am concerned that in the black market, there are no affordability checks, no safer gambling tools, no self-exclusion and no protection at all for punters and no taxes to support public finances.
