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The Treasury Select Committee has urged Chancellor Rachel Reeves to push ahead with targeted gambling tax increases, arguing that the government should resist what MPs call "scaremongering" by major operators. The request comes while Reeves is preparing her second Budget and is weighing up how to extract additional revenue from a sector that received £11 billion from players during the previous year.

The Committee's report focuses on increasing duties for what is considered the most "addictive" and fastest-growing sectors of the market. This includes slot machines on the high street and online casino games.

MPs said that setting tax measures around product risk would create a fairer system. This is similar to arguments made by think tanks like the Social Market Foundation and the Institute for Public Policy Research.

Despite the ongoing debate, industry analysts continue to point out promising areas of regulated gambling across the sector. An expert analysis of no-KYC casinos shows the benefits that these platforms can have for public projects. The easier onboarding process of such sites is a big draw for many, and the tax revenue of these casinos can be used for public projects. Discussions about online gambling show the direction that policy should move to: ensuring player protections while encouraging responsible industry practices.

The Committee announced its findings after what was described as an "extraordinary moment" in an evidence session last week. Graine Hurst, Chief Executive of the Betting & Gaming Council (BGC), has consistently denied that gambling causes social harm. "You feel a moment in a room sometimes where everyone's jaw drops," said Committee Chair Meg Hillier. "A couple of us pushed to ask if she was sure she was saying that. But she doubled down."

Industry Fears Driving Players Offshore

Operators argue that aggressive tax changes will push players to unregulated platforms and force shop closures across the country. In a report commissioned by the BGC, accounting firm EY warned that 40,000 jobs could be lost if duties were to be increased. Betfred claimed that all 1,287 of its shops would close under certain scenarios should the tax increase be implemented.

Hursts said that BGC members "contribute £6.8 billion to the economy, generate £4 billion in tax, and support 109,000 jobs." She said that higher rates would undermine the regulated market. She also cited NHS research suggesting that only 0.4% of adults are problem gamblers and warned that increased duties risked reducing revenues and cutting funding that BCG members provide to British sport.

The gambling sector has repeatedly argued that policymakers must choose between maintaining a regulated gambling industry or imposing tax rises that will encourage players to seek out offshore regulators.

Reeves has previously acknowledged the trade-offs involved, saying earlier this year: "I do think there is a case for gambling firms paying more... they should pay their fair share of taxes and we will make sure that happens."

MPs Want Differentiation Between Low-Risk And High-Risk Products

The Committee's report requests that tax revenue be raised for products that are considered to pose the highest risk of addiction. Currently, tax rates vary significantly. General betting duty on sports and horse racing is at 15%, machine gaming duty is at 20%, and remote gaming duty applied to online casino games is set at 21%. Casinos pay between 15% and 50%, depending on profitability.

MPs say differences should reflect varying levels of harm. "Online betting games are extracting huge amounts of money from people who have been funnelled into the most addictive, harmful corners of the industry via their love of sports, or the occasional game of bingo," Hillier said. The Committee stressed that traditional forms of gambling, like bingo halls, seaside arcades, and horse racing, should be safely enjoyed by everyone.

MPs acknowledged that tax increases might push a minority of players to unregulated sites, but doubted the operators' dire warnings. Studies submitted to the Committee show that higher duty rates are not consistently associated with increased black-market activity in other countries. However, the report recommends that the Treasury consider anti-avoidance measures to protect consumers.

Reeve's Budget is drawing nearer, and both sides are increasing their lobbying. Operators are warning of threats to investment and employment, while MPs insist a new tax system is needed for the sector's changes.