An article in the Guardian on Friday 11th October entitled “Labour considers up to £3bn tax raid on gambling firms”[i] made gambling company shares plummet.[ii] The article by Rob ‘Ripper’ Davies should really have been posted on April 1st as it was so much fantasy as to be laughable.

 

It states that the Labour government are considering a £3BN raid on gambling taxes due to a report written by the Institute for Public Policy Research (IPPR) called ‘Our greatest asset: The final report of the IPPR Commission on Health and Prosperity’.[iii] The IPPR is a left-wing think tank and in this report, its authors have fully drunk the Kool-Aid of Public Health. It proposes a radical restructuring of the economy and society to promote a healthier a population which will in turn reduce costs for the NHS and the Welfare budget. A laudable ambition but when you look into the detail, it is ultimately Stalinesque in its approach and full of restrictions and regulations, that have no hard evidence of working and every chance of making people’s miserable lives a lot more miserable, just so an ever burgeoning cottage industry of Public Health zealots can themselves grow fat on the tsunami of grant money that has appeared for this new fad variant of Woke.

 

Public Health, like all Marxist endeavours, seeks to liberate the working classes but ends up enslaving them. Just as Scottish people now pay 30% for their alcohol due to Public Health measures which so far has only seen record deaths for alcoholism, the Public Health approach focuses on increasing regulations and taxes to encourage behavioural change. Like with most authoritarian regimes, there is no democratic accountability as to who decides which behaviours need changing and the victims are those whose actions do not fit the new puritan ideal. George Orwell would have added Public Health advocates to his un-PC description of socialists who he described as; ‘fruit-juice drinker, nudist, sandal-wearer, sex-maniac, Quaker, ‘Nature Cure’ quack, pacifist, and feminist in England’. The sex maniac attribute maybe a bit much considering the looks of many, unless its highly deviant.

 

Public Health ignores the fact that people alter their mood by smoking, drinking and drugs because, in part, they are unhappy with their lot, or eat and drink high salt, sugar and fat because its affordable. Public Health also ignores that people drink, smoke and eat unhealthily because they enjoy it. Public Health ignores the fact that it is these people’s choices to do so. Public Health wants you completely subservient to the state. It ignores the basic fact that if you want people to live healthier lives, give them better lives, better jobs and more money. Don’t make their lives more miserable by banning what little pleasure they can get. But Public Health is about ideology not reality, like every authoritarian dogma.

 

The IPPR Report argues for the now usual mantra of if only the polluter would pay then the extra taxes could fund better services and the change in behaviour would mean less pressure on healthcare. It ignores the question of how do you prove that the pollution is caused by the polluter. Its obvious with an oil spill, or even tobacco but since such a large amount of those suffering gambling problems do so as a symptom of other mental health issues, how do you attribute such costs

 

For gambling, it proposes massive increases in gambling taxes, such as:

 

• General Betting Duty – from 15% to 30%

• Remote Gaming Duty – from 21% to 50%

• Machine Games Duty – from 5-20% to 10-40%

 

Then we can see the impact of Derek Webb on the Public Health lobby (which I will return to) with land based casinos getting just a marginal hike:

 

• Gaming Duty – from 15-50% to 20-66%

 

Then the remaining taxes are left alone, Lottery Duty, Pool Betting Duty and Bingo Duty as these are the only acceptable forms of gambling to Public Health nasties.

 

Why I am calling bullsh*t  on this proposal?

 

Because its utterly economically illiterate. The less then 400 words given to gambling in this 126 page report provides no explanation of its workings. It gives no criteria as to how the new tax rates were calculated, it just says that remote and machines are higher harm, without evidence. It then looks like it has just taken these arbitrary increases in tax rates and applied them to the current tax take, just giving supposed totals of future gambling tax revenue in 2025/26 of £2.9BN growing to £3.4BN by 2029/30 – which looks like they have just adjusted for inflation.

 

Even someone with just an economics GCSE would have the basic intelligence to know that if you increase taxes you ultimately change consumer behaviour. The IPPR bizarrely believe that if you increase taxes on operators by 50%, everything will just stay the same. Tax rises of this enormity will cause operators to either move to the Black Market or be forced to increase their prices (offer smaller odds) so that they become uncompetitive with the Black Market and eventually have to move there to survive or just go out of business. Basic economics tells you such a tax rise would bankrupt the regulated UK industry and explode the Black Market. This in turn would completely destroy gambling tax revenues which is why I am certain that even the most junior Treasury official will dismiss this as the ideological rubbish it obviously is.

 

If you don’t think my analysis of why I think this is blatant bullsh*t have a read of real tax expert’s views on this https://taxpolicy.org.uk/2024/09/25/the-tax-longlist-29-ways-rachel-reeves-could-raise-22bn/  

 

Unsurprisingly, the Guardian also quotes the left wing think tank Social Market Foundation (SMF) as ‘working on a more moderate proposal that would double the tax on online gambling companies from 21% to 42%, raising about £900m’. The obvious economic illiteracy here being that either the SMF or the Guardian haven’t heard of General Betting Duty. We are no doubt waiting for Derek Webb to get out his chequebook and his poodle Noyes coming up with some ideological hocus pocus.

 

Economic illiteracy combined with a willingness to take the anti-gambling lobby’s money go hand in hand with these lefty think tanks. The IPPR attempted a cost but no benefit study on gambling in 2016, which stated that gambling costs the country between £260M and £1.16BN. The report, Cards on the Table, was so heavily caveated, they basically admitted they were pulling numbers out of thin air, and the range of its estimated costs so wide, that it was as big a joke as this current one.[iv]

 

The SMF is equally appalling and understandably. This once credible think tank has been paid by Derek Webb so many times to come out with ludicrous reports that James ‘Herr Flick’ Noyes should declare himself as a Webb employee. Their last economically illiterate report argued that because gambling has a short supply chain it should be restricted so that people would spend their money on other activities that provide a bigger economic multiplier.[v] This Marxist approach to the economy, ignores personal choice, or that many other industries equally have short supply chains, looking at the biggest sector of the British economy, the service industry and more importantly, you restrict gambling, gamblers will go to the Black Market and spend their money there – outside of the UK and not get any protection.

 

What we see in these reports are the confluence of the two sides of the anti-gambling lobby being given a veneer of credibility by these think tanks. The anti-gambling Public Health academics believes that only the most village fete type gambling (raffles) are really acceptable and want the rest banned. Derek Web funded anti-gambling groups want to protect his friends in land-based casino industry, hence the only moderate tax increases proposed above and they don’t provide any real evidence for why. The fact that land based casinos have a similar rate of problem gamblers than online does suggest that the criteria for change wasn’t based purely on harm.[vi]

 

So it does remain a truism in politics that when the government changes, the good people from think tanks aligned to the party get jobs (e.g. Torstein Bell from the Resolution Foundation who is now an MP) while those who publish economically illiterate codswallop are left to hawk their credibility to whichever fanatics will cross their palms with gold.

 

I should add that since 2016, British politics has gone mental and the usual laws of political physics no longer apply, so there could be a small chance that the most sensible of government departments, His Majesty’s Treasury, being led by its most technocratic and economically able Chancellor in a generation would consider on the basis of less than A4 sheet of paper commentary, which highlights the hugely flawed 2.5% problem gambling rate from the Great British Gambling Survey which its publisher, the Gambling Commission has practically disowned and demanded no one use the stats in a way that the IPPR obviously have (will Andrew Rhodes be writing to them) and provides no explanation to its workings, is a worthwhile basis to undertake the biggest overhaul in British gambling taxation since gambling taxes were introduced in 1966 and which would obviously crash the industry, lose millions from the Exchequer, cause thousands of job losses and send millions of punters to the Black Market to be robbed. But I don’t think so.

 

What I do think will happen and what I think explains the supposed quote from the anonymous Treasury source in the  Guardian, is that they will finally go forward with their proposed consultation for having a unified online gambling duty. Since online betting is presently taxed at 15% and online gaming currently taxed at 21% it seems logical that the new unified tax rate will be 21%. Arguably, this could even be an opportunity to increase this new rate even further, say 25% but the Treasury themselves has said (it was in 2014 I think but cant find the source) that the believe that 29% is the rate which causes a Black Market, so that would be a logical ceiling.

 

Like practically everything Yorkshire’s most infamous son writes in his antisemitic[vii] and so politically extreme that even Labour luvvies won’t read it anymore[viii] with an estimated readership of only 60,000[ix] (mostly Islington and Sociology Departments) newspaper, this story is just ideological campaigning by those so blinded by their hatred for all things gambling that they have lost all integrity, whether it be as journalists or as researchers. Unfortunately for gambling companies the impact on their share price far outweighs the amount manure that has caused it.

 

[i] https://www.theguardian.com/politics/2024/oct/11/labour-tax-gambling-firms-treasury-public-finances

[ii] https://www.thisismoney.co.uk/money/markets/article-13956907/Gambling-shares-nosedive-amid-rumours-looming-3bn-tax-raid.html

[iii] https://ippr-org.files.svdcdn.com/production/Downloads/Our_greatest_asset_Sept24.pdf

[iv] https://www.ippr.org/articles/cards-on-the-table

[v] https://www.smf.co.uk/wp-content/uploads/2021/03/Double-or-nothing-March-2021.pdf

[vi] Conolly, A., Davies, B., Fuller, E., Heinze, N., Wardle, H. (2018). Gambling behaviour in Great Britain in 2016 Evidence from England, Scotland and Wales. Nat Cen.

[vii] https://www.spectator.co.uk/article/guardian-deletes-controversial-7-october-review/

[viii] https://x.com/Tony_Robinson/status/1845125575842705618

[ix] https://pressgazette.co.uk/media-audience-and-business-data/media_metrics/most-popular-newspapers-uk-abc-monthly-circulation-figures-2/