Gambling businesses domiciled in the UK could be forced to leave if taxes are significantly raised by the Labour government, warns PricewaterhouseCoopers (PwC). 

The dire warning comes from a PwC report commissioned by the Betting and Gaming Council (BGC), which analyses market trends across Europe in jurisdictions where regulations and tax have been significantly tightened.

Italy, Romania and France were detailed as examples of shrinking markets due to their strict regulatory regimes, whilst Denmark and Sweden – both generally considered favorable by experts have retained a stable number of gambling licences, since introducing reforms prior to the 2020s. 

The report comes ahead of the UK’s 26 November Budget, as industry anxieties mount that Chancellor of the Exchequer Rachel Reeves will side with the recommendations of Think Tanks and double taxes on all gambling activities, expect for wagers on UK racing. 

Using data from H2 Gambling Capital, VIXIO Gambling Compliance, and BGC’s own members, PwC’s findings suggested that countries where the tax on online gambling GGR exceeds 25% usually have a lower tax take at around 9%.

On the other hand, jurisdictions that tax their online gambling GGR at rates lower than 25% predominantly have a tax take of around 13%, PwC added.

If Reeves decides to go through with the tax increase, the report cautions that operators will be forced to adapt by limiting their pricing, player bonuses, market offered and marketing spend to offset financial headwinds.The knock-on effect would see consumers look for alternatives with unlicensed offshore websites, a trigger increasing the UK gambling exposure to the black market.  

BGC members across Germany, the Netherlands, Spain and the UK have reduced their betting and gaming bonuses in the past as a result of stricter regulations and higher tax implementation, PwC added.

The report came soon after Grainne Hurst, CEO of the BGC, made her case against a gambling tax increase in front of a Treasury Select Committee, however her arguments were quickly dismissed by reformists.

With just twelve days to go before the Autumn Statements announcement, the Chancellor and PM Keir Starmer maintain that the ‘red-lines’ of Labour fiscal policies will not be crossed.

Elsewhere, the Autumn Statement is expected to centre on pro-growth reforms — spanning planning, housing and business investment, with most briefings emphasising a focus on “delivering for working people”. 

According to the Treasury, this agenda will be accompanied by a new Youth Jobs Guarantee, offering paid work placements for young people on long-term Universal Credit, a commitment already flagged by the Chancellor in pre-Budget reports.