Reeves puts the UK Black Market on the line with a gambling tax increase

Monday 27 October 2025 at 18.00
| Updated:

Monday 27 October 2025 16:55

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Chancellor Rachel Reeves risks creating a “British Black Market” if next month’s Budget sees a significant tax crackdown on the gambling sector.

Industry insiders have warned of a potentially disastrous impact on bookmakers and gambling companies if levies on online betting and slot machines are raised in line with former Prime Minister Gordon Brown’s recommendations.

The future of gambling tax will be discussed on Tuesday in a Finance Committee hearing featuring Paddy Power co-founder Stewart Kenny, former Tony Blair and Brown adviser Theo Bertram and figures from the Betting and Gaming Council.

AM City understands that a number of meetings took place between major betting operators and Reeves’ Treasury last week ahead of the November 26 Budget, where Reeves is expected to target a so-called “sin tax” to plug his growing financial black hole.

UK Black Market

It seems almost inevitable that the bookies levy – from 15 per cent – ​​and the online slots levy – 21 per cent – ​​will be increased as the gambling industry lobbies to keep such increases to a minimum. One source said that “it’s all worth it” in urging the government to take a good look at the sector, while another source raised the alarm over illegal gambling if tax raids continue, and warned that the country could become Britain’s Black Market.

Insiders say the industry will lean on Prime Minister Victoria Starmer’s wife’s interest in horse racing from now until the Budget in the hope of showing how widespread the impact of the proposed changes will be.

Shadow Sports Minister Louie French said a crackdown on gambling was “a disaster waiting to happen,” and added that EY analysis showed “Labour will further fuel the black market, thousands of high street shops and jobs in the regulated sector will be lost across the UK, and the Chancellor will create another black hole in the nation’s finances.”

Reeves’ taxes went up

The “sin tax” is expected to include increased levies on bookies, while speculation surrounds further raids on income, property and middle-income taxes.

Grainne Hurst of the Betting and Gaming Council said the tax increase “would provide huge profits to an unregulated black market, where there are no protections, no tax revenues and no jobs”.

“Every pound put on the black market is a loss for UK businesses and the Treasury,” he added.

Last year, Reeves told the business world he would not “come back with more borrowing or more taxes” after his first Budget as the Chancellor saw the announcement of an increase in public spending of almost £70 billion.

French added: “This inexperienced government is risking lives and livelihoods, and taxpayers will pay the price.”

The Treasury Department was asked for comment.