Members of a Northern Irish legislative group have leapt into the fray around betting taxation as the UK budget looms on 26 November with a hike in gaming duties now widely considered set in stone.

The Northern Ireland Assembly’s All-Party Group on Reducing Harm Related to Gambling has penned an open letter to Rachel Reeves, Chancellor of the Exchequer with the Labour government, backing one of the more extensive tax raises.

The APG is accusing the Labour government of failing to meet its manifesto pledge of reducing gambling harm, arguing that “the evidence clearly shows that remote gaming products, such as online slots and casino games, are far more harmful than remote betting”.

A potential increase in betting tax has been on the political agenda for some time, with the Treasury having consulted on the topic over the past few months. The Treasury Select Committee of the UK House of Commons also heard submissions from pro and anti-tax voices last month.

A widely expected outcome is a merger of the three main types of gaming duty – Remote Gaming Duty (RGD) of 21%, General Betting Duty (GBD) of 15% and Pool Betting Duty (PBD) of 15% – into one single 21% duty.

Another prospect is for RGD, paid by online betting operators, to rise to 50% and GBD, paid by all licensed operators whether retail or land-based, to rise to 25%. This prospect was first tabled by the think tanks the Social Market Foundation (SMF) and the Institute for Public Policy Research (IPPR).

The Northern Irish APG is throwing its hat into the ring behind the latter option, arguing that this could raise £2bn in annual Treasury revenue while discouraging harmful forms of gambling. It has also taken a particularly strong stance against the 21% merger idea, labelling this as a ‘harmonisation’ of gambling taxes.

“The British Government should not be seeking to harmonise the rate at which these types of remote gambling are taxed,” the letter reads.

“It should instead use the upcoming Budget to increase the tax rates on remote gambling to offset the societal costs of the harms associated with it, which are estimated to cost the Exchequer in excess of £1bn annually.”

The letter concluded: “Reject the proposals to harmonise tax rates on remote gambling and use your upcoming budget statement to introduce appropriate tax increases on the industry. To do so would serve to reduce the harms associated with the activities of the highly profitable remote gambling industry and raise much needed additional revenue.”

Northern Irish lawmakers choose their side

The odds of betting tax increasing are now solidly stacked against the industry. Reeves said earlier this year at the Labour conference that bookmakers should ‘pay their fair share’, while her speech outside Downing Street earlier this week was widely seen by observers as indication that her budget will see taxes increase.

While Reeves’ Monday speech had consumer-facing taxes like income tax, national insurance and stamp duty in mind, the industry should still err on the side of caution and expect its costs to go up in two weeks time.

The past few months have seen stakeholders in both betting and gaming involved in extensive campaigning, particularly the British Horseracing Authority (BHA) and the Betting and Gaming Council (BGC).

According to the Telegraph, the BHA’s campaign may have paid off and horse racing is set to be excluded from betting tax raises. To be fair to the pro-tax lobby, campaigners had previously said that they envisioned online gambling, casinos and slots bearing the brunt of betting taxation, a prospect Northern Irish politicians appear to agree with.

“Remote gambling, and in particular online gaming and slots, is causing untold harm to individuals, families and communities here,” said Philip McGuigan, the Sinn Fein MLA who leads the Gambling Harm Reduction APG.

“It is unacceptable that these highly addictive products could be taxed at the same rate as less harmful gambling activities, like betting on horse racing. The statistic that we have the highest rate of problem gambling is deeply concerning and urgent action is needed.

“We are calling on the British Chancellor to reject these proposals to harmonise tax and instead use the upcoming Budget to increase taxes on the remote gambling industry. This would protect people, reduce harm, and raise much-needed funds for public services.”

Gambling, Great Britain, and Northern Ireland

Gambling in the UK is slightly fragmented legally and politically, with the UK Gambling Commission (UKGC) serving as the regulator for gambling in Great Britain under the 2005 Gambling Act.

However, gambling in Northern Ireland is governed under its own legislation. The industry was governed for decades by the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985, passed by the Northern Irish Assembly’s predecessor, the Parliament of Northern Ireland.

In 2022, legislators sought to update the country’s gambling framework with the passage of the Betting, Gaming, Lotteries and Amusements (Amendment) Act 2022. Similar to the then ongoing review of the 2005 Gambling Act in Great Britain, the amendment sought to modernise Northern Irish gambling regulations for a digital era.

With most UK betting firms, with the exception of a few regional independent chains, being nationwide – with active in both Great Britain and Northern Ireland – the way these firms are taxed falls to the government in Westminster, with fiscal policy set by the aforementioned Rachel Reeves.

Gambling remains an area of concern for many MLAs in Northern Ireland, with McGugian a particularly vocal figure around the impact of gambling harm on the country’s communities, something that has fueled desire among some Northern Irish politicians to see the industry pay a higher rate of tax.