Rachel Reeves is due to announce the UK budget in 15 days time, and calls for the Chancellor of the Exchequer to significantly hike gambling taxes aren’t dying down, with former PM Gordon Brown leading the charge.

The economic figurehead of Tony Blair’s New Labour government, Brown served as Chancellor for a decade from 1997-to-2007. His tenure saw Labour implement the reforms of 2005 Gambling Act modernising UK laws for remote gambling.

As Chancellor, he introduced sweeping reforms to UK gambling’s tax plan, introducing a betting duty on remote licences to a standard 15% tax on gross profits. Brown views actions taken at the time as positive and necessary to help operators return to the UK and boost economic productivity in the 2000s.

Industry anxieties now turn to whether Brown will be the engineer of a doubling of GGR taxes applied to all gambling verticals, in his ambitions to lift the two-child benefit cap and raise £3bn for the exchequer to tackle child poverty directly.

Speaking to Sky News yesterday morning, Brown reiterated his call for gambling tax to be raised to pay for a government campaign to curb child poverty, which stands at an embarrassingly high figure of 31% for a country with the world’s sixth largest economy by GDP.

“We tax cigarettes at 80%, we tax alcohol at 70%, but the online gambling tax is 21%. So there’s a big case for change,” Brown said on Sky’s Mornings with Ridge and Frost programme.

Referring to the hundreds of bookmakers and casinos in the UK, both online and offline, Brown added that operators ‘could well afford to pay a tax – and I want that money to go to child poverty’.

“So, move the money from, if you like, the bad, by taxing it,” he said. “And put it to good, which is children taken out of poverty.”

Any sign of Reeves’ intentions?

Gordon Brown’s assessment of gambling tax is based on reports from the Social Market Foundation and Institute for Public Policy Research (IPPR), particularly the latter. The think tank has proposed a scrapping of the two-child limit on child benefits.

It estimates this would cost around £3bn, which it further believes could be paid for via rising gambling taxes in some form. The most drastic suggestions so far has been from the IPPR and SMF, which suggest increasing Remote Gambling Duty from 21% to 50% and General Betting Duty from 15% to 25%.

This whole debate stemmed from a consultation launched by the Treasury earlier this year into whether the three main types of gaming tax – RGD, GBD and Pool Betting Duty – should be merged into one single 21% rate.

It appears that after extensive lobbying from both the betting industry and horse racing the latter will be excluded from these calls, leaving the onus on RGD and Machine Games Duty (MGD), and to a lesser extent on GBD.

At the moment, Reeves’ intentions are purely the matter of speculation with the Treasury being understandably guarded around the topic. Reeves’ comments in recent weeks suggest that a scrap of the two-child benefit limit, first introduced by the Conservative government back in 2017, is on the cards – but there has been no more clarity on whether gambling taxes are intended to pay for this.

“I don’t think that it’s right that a child is penalised because they are in a bigger family, through no fault of their own,” Reeves told BBC Radio 5 Live this week.

“And so we will take action on child poverty. The last Labour government proudly reduced child poverty, and we will reduce child poverty as well.”

Betting’s toughest battle yet?

Regardless of the two-child cap discussion though, the Labour government is facing a Mt Everest-sized financial burden at the moment. Reeves also acknowledged this week that the government has been facing a ‘black hole’ in public finance for some time.

The government’s intentions around childhood poverty aside, public finances need to be paid for somehow, and the online betting industry with its gross gaming yield (GGY) of £1.49bn between April-June 2025 will always be a tempting target.

Industry lobbying remains consistent. While horse racing is reported to have secured its objectives, the Betting and Gaming Council (BGC) is still working overtime to secure any last-minute political wins.

The trade body published a report this morning making comparisons with other markets which saw tax raises lately, namely France (54.9% on online sportsbook income), Sweden (22% ) and the Netherlands (38% in 2026), the latter an often-cited example of the negative impacts of taxation.

The study’s findings argue that higher tax jurisdictions see a higher level of black market activity as a result, with France, Sweden and the Netherlands seeing 57%, 35% and 37% of their market share taken up by black market firms.

Grainne Hurst, CEO of the BGC, said: “Britain has one of the safest gambling markets in Europe but if the Treasury isn’t careful, we could quickly end up like France or Sweden, with huge black markets contributing nothing in tax, offering zero player protection, and providing no funding for sport or the economy.

“Well-balanced regulation and fair taxes protect players, raise more revenue for the Treasury, and support thousands of jobs. Unlicensed operators do none of those things.”

The BGC’s campaigning may all be for nought, however. At a Treasury Select Committee hearing late last month, MPs appeared unconvinced by the BGC’s black market warnings nor comparisons to the Netherlands – both of which had been dismissed earlier in the day by representatives from the IPPR and SMF.

British bookmakers are no strangers to lobbying and political engagement, but the highly heated debate around taxation seems to have been the most intense it has faced yet, surpassing the lengthy review of the 2005 Gambling Act. It is also a battle all signs are suggesting the industry is on the losing side of…