The Institute for Public Policy Research (IPPR) has called upon the UK government to significantly increase gambling tax, as a means to reduce child poverty.
The think-tank has set out its position with the aim of the policy change raising around £3 billion ($4 billion) per year, while it insists there would be no real boost to the illicit gambling market.
One high-profile figure backing the IPPR proposals is former British Prime Minister and long-time Chancellor, Gordon Brown. He has called upon the incumbent, Rachel Reeves, to hike gambling taxes so that changes can be made in the upcoming autumn budget.
The report released by the IPPR states that there are options on the table for the government to remove the two-child limit and scrap the household benefit caps.
These two distinct welfare policies restrict the financial support provided to families through benefits. They are issues that are controversial and viewed by many as priorities to be addressed, but at present, there is no sign of change from the ruling Labour Party.
It is believed that the measures to alleviate child poverty for 500,000 people would cost £3 billion, and to raise the finance, lawmakers have been advised to consider that “Gambling taxation is an area ripe for reform,” according to the report.
“It is inescapable that gambling causes serious harm and a significant share of profits derive from the most frequent users, who are at most risk of harmful patterns of play, often linked to addiction or financial distress.”
Time to tax the highly profitable gambling industry to pay for action on child poverty.
Gambling will not build a Britain for the future but children free of poverty will. https://t.co/Foqzx47yza
— Gordon Brown (@GordonBrown) August 6, 2025
Gambling industry body says tax plan is ‘economically reckless’
The think-tank goes on to state that gambling operators, which are largely exempt from VAT and often based overseas, should be expected to contribute more to address social harm, especially as the industry is so profitable.
It has been recommended to increase remote gaming duty from 21% to 50%, with machine games duty increasing from 20% to 50% on operator profit.
The hike would follow the increase of overall betting duty from 15% to 25%, with the IPPR estimating that the government could generate an additional £1.8 billion ($2.4 billion) in the 2026-27 financial year.
Brown has spoken out in support of the proposals, claiming that the “undertaxed” gambling sector is “by far the most cost-effective way” for Chancellor Reeves to act to lift children out of poverty.
As expected, the reception from the industry has not been as welcoming, with the Betting and Gaming Council warning the “economically reckless” plan would push gamblers toward the underground market.
UK gambling industry lobbyists are said to be organizing meetings and events to schmooze ministers ahead of a feared tax rise.
Image credit: Grok/X
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