The UK betting and gaming sector faces a potential economic downturn if new tax hikes go ahead, according to independent analysis by EY. Commissioned by the Betting and Gaming Council (BGC), the study warns that proposals from the Social Market Foundation (SMF) and the Institute for Public Policy Research (IPPR) could result in tens of thousands of job losses, reduced tax revenue, and an expanded illegal gambling market.
EY’s findings suggest that the proposed tax increases could eliminate over 40,000 jobs, shift £8.4 billion in wagers to the black market, and reduce the sector’s economic contribution by £3.1 billion. Despite these consequences, the new tax rates would generate only a fraction of the additional revenue forecasted by their proponents.
Currently, the regulated gambling industry contributes £6.8 billion to the UK economy and pays £4 billion in taxes annually. It supports more than 109,000 jobs nationwide, with major hubs in Stoke-on-Trent, Manchester, Leeds, Nottingham, Sunderland, and Warrington. The proposed tax measures, however, could erode this foundation, with significant repercussions for workers, businesses, and local economies.
BGC Chief Executive Grainne Hurst called the proposed increases a direct threat to growth, stating:
“It is now clear these further tax rises are a direct threat to British jobs and economic growth. The figures speak for themselves – tens of thousands of jobs lost, billions diverted to the black market, and a possible £3 billion hit to the economy. Tax raids like those proposed would mean fewer betting shops, casinos and bingo halls, fewer jobs, and a huge boost to the growing, unsafe gambling black market, while not raising anywhere near the tax claimed.”
Impact of Proposed Tax Changes
Under current regulations, UK bookmakers pay tax on Gross Gambling Yield (GGY) — the difference between stakes and customer winnings — at 21% for online gaming, 20% for machine gaming, and 15% for sports betting. The think tanks propose raising these rates to 50% for online gaming and 25% for sports betting.
EY’s modeling shows that the IPPR proposal would eliminate 40,000 jobs, redirect £8.4 billion in stakes to unregulated operators, and cut £3.1 billion from the UK’s Gross Value Added (GVA). The SMF proposal, while slightly less severe, would still result in 30,200 job losses, an £8.1 billion black market shift, and a £2.5 billion drop in economic output.
Although the IPPR claimed its recommendations could yield £3.2 billion in new tax revenue, EY estimates the real figure would likely be closer to £1 billion. Once reduced employment, lower corporate tax, and other indirect effects are considered, the Treasury’s actual net gain could fall to below £500 million.
Industry experts caution that higher taxes would make the regulated market less competitive, driving players toward offshore and illegal operators offering better odds and promotions. This, they warn, would erode consumer protections and reduce overall tax receipts.
EY also highlighted that both think tanks failed to consider the 2023 Gambling Act Review White Paper, which is already projected to cut sector revenue by £1 billion. Their growth assumptions — 31% by 2025 — also diverge from EY’s forecast of a modest 4% growth between 2023 and 2026.
Industry Reaction and Wider Implications
The proposed tax hikes have sparked concern across the betting industry. One of the operators warned that additional levies could lead to the closure of its 1,300 betting shops, threatening nearly 7,000 jobs. Entain CEO Stella David also cautioned that higher taxes could push more consumers toward the black market, undermining existing regulatory safeguards.
Hurst emphasized that stable taxation and balanced regulation are essential for maintaining a safe, thriving industry, adding:
“Balanced regulations and a stable tax regime guarantee a growing regulated sector. But these proposals would achieve the absolute opposite of that and undermine the very consumer protections that keep people safe by pushing customers towards the unregulated black market, where there are no safeguards, no tax receipts, no jobs, and no support for the sports we all love.”
The EY analysis concludes that higher tax rates would fail to achieve their intended fiscal goals, instead damaging one of the UK’s most regulated and internationally competitive industries.
Global Gaming Bodies Unite to Address Industry Challenges
A year ago, the American Gaming Association (AGA), European Casino Association (ECA), and Betting and Gaming Council (BGC) have joined forces to tackle global issues such as illegal gambling and responsible gaming through a newly signed Memorandum of Understanding (MOU).
The partnership between AGA, ECA, and BGC aims to enhance collaboration on key topics, including industry innovation, player protection, and cross-border security. Bill Miller, AGA President and CEO, described it as “a significant step forward in our collective efforts to advance the legal gaming industry and protect consumers around the globe.”
The agreement lays the groundwork for joint research projects and knowledge-sharing initiatives among the three associations. One of the first major actions under the MOU will be a law enforcement roundtable in January 2025, focused on combating illegal gambling networks and improving coordination between regulators and law enforcement agencies.
By uniting under a shared vision, the AGA, ECA, and BGC aim to ensure a secure, responsible, and innovative future for the global gaming industry.
Source:
“Further tax raid on betting threatens 40,000 jobs and £3BN blow to UK economy, warns new analysis“, bettingandgamingcouncil.com, October 26, 2025.
