Black market alert sounded by Reeves due to proposed gambling taxes
Gambling Tax Increase: Potential Impact on Regulated Markets and Consumers
A proposed tax increase on gambling, reducing deductible gambling losses from 100% to 90% starting in 2026, is causing concern within the regulated gambling industry. This change could lead to "phantom income" tax liabilities for gamblers, even those who break even or lose overall.
Stella David, the CEO of the Coral and Ladbrokes owner, Entain, has expressed her concerns to the Chancellor, warning that such a tax could drive people to unregulated operators. The increase could potentially discourage some gambling activity in regulated markets, with gamblers seeking alternatives where tax burdens and regulatory oversight are absent.
This shift could indirectly affect state gaming revenues negatively by incentivizing gamblers to move to unregulated platforms. Industry experts and lawmakers argue that this could be detrimental, as states reliant on gambling taxes for revenue could see their share decline if players migrate to unregulated platforms.
The list of companies offering online platforms for individuals to invest their money includes Entain, Interactive investor, InvestEngine, Hargreaves Lansdown, Trading 212, and AJ Bell. However, no specific product or service offered by these companies is mentioned in the provided information.
Despite the impending tax change, the broader gambling market continues to show robust growth. Commercial gaming revenues have increased in casino games, sports betting, and iGaming as of mid-2025. However, the tax law change could disrupt this growth trajectory if it substantially alters gambler behavior.
There is strong bipartisan opposition to the tax increase, with ongoing legislative efforts such as the FAIR BET Act and the FULL HOUSE Act aimed at restoring full deductibility to prevent these negative outcomes. These developments indicate the tax increase could have significant economic and regulatory ramifications if enacted as planned.
Former Prime Minister Gordon Brown has suggested a tax on the gambling sector to fund the scrapping of the two-child benefit cap and help alleviate poverty. The full impact of the proposed tax increase on the gambling industry and consumers remains to be seen, as the situation continues to evolve.
