Proposed gambling tax hikes could cost 40,000 UK jobs and drive players to black market, new report finds

A new report by Ernst & Young (EY) has warned that the UK government’s proposed increase in betting and gaming taxes could have severe economic consequences, threatening tens of thousands of jobs and driving gamblers toward unregulated markets.

Commissioned by the Betting and Gaming Council (BGC), the report titled 'Impacts of Changes to Betting and Gaming Taxation' has been submitted to the Treasury ahead of Chancellor Rachel Reeves’ Autumn Budget on November 26. It models potential outcomes of raising the General Betting Duty (GBD) and aligning it with the higher Remote Gaming Duty (RGD), as well as other possible tax reforms being considered by the Labour government.

EY’s analysis shows that raising GBD from 15% to 21% could generate about £250 million ($330 million) in additional annual revenue for the Treasury. However, the report warns that such a move would lead to a £240 million ($318.5 million) drop in gross value added (GVA) and result in the loss of between 2,800 and 4,700 jobs across the gambling sector and its supply chain.

The study also estimates that black-market gambling stakes could increase by between £400 million ($530.9 million) and £1.2 billion ($1.59 billion) as players migrate away from regulated platforms in response to higher taxes and reduced payouts.

More aggressive tax proposals from think tanks such as the Social Market Foundation (SMF) and the Institute for Public Policy Research (IPPR) would result in even greater disruption, according to the report.

The SMF has suggested rates of 25% for betting and 50% for online gaming, which EY estimates could raise around £1 billion ($1.3 billion) in tax revenue but lead to the loss of up to 30,000 direct and indirect jobs and £3 billion ($3.98 billion) in economic value.

The IPPR’s plan for 50% duties across gaming and machine operations could also erase as much as £3 billion ($3.98 billion) in gross value added, EY said. While the IPPR claims such measures could generate £3.2 billion ($4.25 billion) in annual revenue, EY’s modeling suggests the true figure would be closer to £1 billion, falling to less than £500 million ($663.6 million) once job losses, reduced corporation tax, and lower National Insurance contributions are accounted for.

“The figures speak for themselves – tens of thousands of jobs lost, billions diverted to the black market, and a possible £3 billion hit to the economy,” said BGC chief executive Grainne Hurst.

“Tax raids like those proposed would mean fewer betting shops, casinos, and bingo halls, fewer jobs, and a huge boost to the growing, unsafe gambling black market, while not raising anywhere near the tax claimed.”

Hurst added that "balanced regulations and a stable tax regime guarantee a growing regulated sector. But these proposals would achieve the absolute opposite of that and undermine the very consumer protections that keep people safe by pushing customers towards the unregulated black market.”

The EY report notes that the UK’s gambling sector, including online, retail, and casino operators, currently contributes £6.8 billion ($9 billion) to the economy, pays £4 billion ($5.31 billion) in tax, and supports more than 109,000 jobs nationwide.

It also points out that the government’s 2023 white paper, 'High Stakes: Gambling Reform for the Digital Age', is already expected to cut remote gaming revenues by £725 million ($962.3 million) by 2026. Combined with additional tax increases, EY warns, these changes could accelerate closures of betting shops and casinos.

While acknowledging the government’s desire to boost tax receipts, EY cautioned that excessive rates risk undermining consumer protection and pushing economic activity into the black market. The report concludes that policymakers face a delicate balance between raising revenue and maintaining a sustainable, regulated gambling industry.