Former Prime Minister Gordon Brown has thrown his weight behind calls to raise taxes on online casinos and slot machines. His position reflects the fact that hundreds of thousands of children could be lifted out of poverty with the money.
A new analysis of the two-child limit raises the possibility that the government is underestimating the savings. Specifically, what could be recovered from winnings at gambling. At the same time, many players are increasingly drawn to gambling sites not on GamStop, which offer fewer restrictions than UK-regulated platforms. Their popularity shows there is a strong demand for alternatives, and it adds another dimension to the debate over how best to regulate and tax the industry.
The implementation of the two-child limit for all Universal Credit and Child Tax Credit applicants is expected to save £2.5 billion in 2024–2025 and potentially £3.6 billion in subsequent years, according to data from the House of Commons Library. At least 422,000 families, or more than half of those with three or more children, are already impacted by the rule, which only applies to third and subsequent children born after April 2017.
This appears to be within a reasonable range, as it closely matches the IPPR’s estimate of £3.2 billion. Therefore, even though Gordon Brown’s savings aren’t drastically off the mark, they might err on the side of optimism, especially if the funding is only available to a portion of the impacted households.
31% of children in the UK lived in relative poverty after housing costs in 2023–2024. 44% of children in families of three or more were impacted, according to the Commons Library’s broader poverty briefing. These are incisive numbers that highlight the pressing need for more than just rhetorical solutions.
Many families in the towns of Hertfordshire and Buckinghamshire deal with these stresses in silence. In line with national trends, school districts have noted an increase in demand for tenant support services and free school meals. One way to put money where it’s most needed would be to increase gambling taxes, as has been suggested by Brown.
The IPPR’s proposal would raise the betting duty from 15% to 25% and the taxes on online casinos and slot machines from about 20% to 50% to match horseracing rates. Although it’s a big increase, it would align the sector with other gaming-related areas.
Importantly, it would also guarantee that a larger portion of the revenue from gambling, which keeps increasing annually, is reinvested in public services. The strong demand for online gambling in the UK gives the Treasury a lot of leeway to act without depleting the market, despite critics’ warnings that higher taxes might drive players to offshore platforms.
Our own figures suggest the fundraising potential is no fantasy. It’s economically plausible. But the path to getting it through Parliament, and ensuring the money actually reaches the families who need it, remains to be paved. For residents in our region, it’s a reminder that policy debates can make a real difference. So long as the numbers add up and the words become deeds.
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