Remote Gaming Duty and the online betting industry

Rachel Reeves is short of cash and thinks she can squeeze more money out of the booming online betting industry. The problem, as I explain in The Critic, is that it is not really booming and the government risks killing the golden goose.

One of the failings of the British left is to take the Conservatives seriously when they claim to be the party of low taxes. Having talked themselves into believing that the Tories spent 14 years under-taxing businesses and the rich, the Labour Party came into power thinking that there were billions of pounds lying on the pavement waiting to be picked up. It only took one Budget for this idea to unravel. Before the election, a tax on non-doms was the magic money tree that would pay for free school breakfasts and fix the NHS. Today, the only question is whether the tax will raise a trivial sum of money or lose the government money. Hiking National Insurance contributions for employers seemed like a pain-free way of raising £25 billion, but it was soon understood as a tax on employment and, with business confidence collapsing, it no longer looks like such easy money. 

There is a dawning realisation that the Conservatives, who raised the tax burden to the highest level in 70 years through a combination of higher rates, new levies and fiscal drag, did not walk the walk as the party of low taxes. If they didn’t introduce a new tax or increase an old one, it was not because they were on the side of “the rich” but because they could see that it would do more harm than good. While the far-left call for a wealth tax in the deluded belief that it would raise £25 billion a year, the rich are already scarpering under the weight of existing taxes.

In practice, the government has a choice between raising taxes such as VAT and income tax which have a broad base or cutting the size of the state. The Cakeist electorate want neither and nor does the Labour Party and so the government continues to search for easy pickings.

One ruse, announced last week, is to raise the tax on online betting. The government did not quite put it like that. It said it wants to explore the possibility of a “single tax for UK-facing remote gambling”, but since the tax on online casinos is 21 per cent while the tax on online bookmakers is 15 per cent, the only realistic outcome is an increase in the latter to match the former.

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