UK Treasury Committee Proposes Significant iGaming Tax Hike Citing Harm Concerns

Treasury Committee Urges Higher Taxes on Online Gambling

The UK Treasury Select Committee has released a report on November 7, 2025, recommending a significant increase in taxes for the iGaming sector, specifically targeting online gambling products. The committee's proposal stems from growing concerns over the harm and addiction associated with online gambling, urging the government to adopt a tax policy that reflects the varying levels of harm caused by different forms of betting.

The report emphasizes that while traditional forms of gambling, such as horseracing and arcade games, can be enjoyed safely, online betting games often promote 'harmful, addictive, high frequency gambling that brings no benefits to people, families and communities.' This recommendation comes just weeks before Chancellor Rachel Reeves is set to announce her Budget on November 26.

Proposed Tax Increases and Revenue Projections

The committee's report suggests that the Remote Gaming Duty (RGD) and Machine Games Duty (MGD) should be set at a higher rate than the gaming duty levied on casinos. Currently, the RGD stands at 21%, MGD at 20%, and General Betting Duty (GBD) at 15%. Think tanks like the Institute for Public Policy Research (IPPR) and the Social Market Foundation (SMF) have proposed raising RGD and MGD to as much as 50%, and GBD to 25%.

These proposed increases are estimated to generate substantial additional revenue for the government, with figures ranging from £1.88 billion to £3.2 billion annually. Proponents suggest this revenue could be utilized to fund anti-poverty initiatives.

Industry Pushback and Committee's Rebuttal

The proposals have met strong opposition from the gambling industry, particularly the Betting and Gaming Council (BGC). The BGC has warned that higher taxes could lead to several negative consequences, including:

• Driving players towards the unregulated black market.
• Significant job losses, with an analysis by EY commissioned by the BGC suggesting up to 40,000 jobs could be at risk.
• Reduced funding for British sports.

Grainne Hurst, Chief Executive of the BGC, reportedly claimed that gambling causes 'no social harm,' a statement that Dame Meg Hillier, chair of the Treasury Committee, found 'staggering.' The committee, however, dismissed the industry's warnings about the black market as 'scaremongering,' citing research that indicates no proven correlation between higher tax rates and an increase in unregulated gambling. The report recommends that the government actively examine strategies to combat black market gambling.

Call for Differentiated Taxation

A core aspect of the committee's report is the call for a 'sharper differentiation' in the taxation of gambling products. The committee argues that the current tax policy does not adequately account for the varying extent of harms caused by different types of gambling. This approach aims to ensure that products with a higher propensity for harm, predominantly found within the online sector, are taxed at a rate that reflects their societal cost.