Reeves Weighs Higher Levies as Treasury Seeks to Simplify and Capitalize on Exponential Growth

The UK gambling sector is under renewed scrutiny as Chancellor Jeremy Reeves faces mounting calls to increase taxes on operators, following the Treasury’s proposal to streamline levies in response to a dramatic rise in online betting. Industry figures report that digital wagers have grown by over 35% in the past 18 months, driven by advanced mobile platforms and aggressive marketing campaigns targeting younger demographics.

In a consultation paper released on July 30, 2025, the Treasury outlined plans to consolidate multiple gambling duties—including the General Betting Duty and the Remote Gaming Duty—into a single ‘Gambling Activities Levy.’ The move aims to simplify the tax framework, reduce administrative burdens, and generate additional revenue estimated at £600 million annually. Officials argue the current patchwork of levies is outdated and ill-equipped to capture the fast-evolving online market.

Reeves, who assumed office this spring, has expressed cautious support for reform but is mindful of potential backlash from industry stakeholders. “We must ensure that our tax system reflects modern realities,” Reeves told the House of Commons Treasury Committee. “However, we also need to protect jobs and ensure the UK remains a competitive hub for digital innovation.” The Chancellor conceded that striking the right balance will require further dialogue with operators and consumer groups.

Operators, represented by the Betting and Gaming Council (BGC), warn that excessive taxation could stifle investment and drive customers to unregulated offshore platforms. Michael Dugher, the BGC’s chief executive, said: “We support sensible reforms, but punitive rates could undermine decades of progress in responsible gambling. It’s vital that any new levy incentivizes compliance and innovation, rather than penalizing customers and businesses alike.” Dugher also stressed the importance of maintaining stringent anti-money laundering controls and consumer protections.

Consumer advocates, by contrast, welcome the prospect of higher taxes earmarked for addiction treatment and public health initiatives. The campaign group GambleAware has called for a minimum contribution of 1% of gross gambling revenue to fund research and support services, stating that the current voluntary model generates less than half the resources needed for effective problem gambling interventions.

Economic analysts at the Institute for Fiscal Studies warn that without careful calibration, the streamlined levy could inadvertently shift tax incidence onto less-regulated segments, such as esports betting and in-play mobile slots. They recommend a tiered approach, with higher rates for high-risk activities and rebates for operators demonstrating best-in-class safety protocols.

Among the proposed measures is a ‘Digital Services Adjustment,’ which would impose additional charges on companies generating more than £100 million in online bets annually. Insider sources suggest this adjustment could add a 2-3% surcharge, potentially raising operator tax rates from the current average of 15% to closer to 18%–20%.

The Treasury’s consultation will run until September 15, with a finalized levy structure expected in the autumn Budget. Reeves faces a delicate political calculus: delivering a fiscal windfall to fund social priorities, while ensuring the UK’s gambling sector remains vibrant and tightly regulated. As online betting continues its exponential ascent, the outcome could set a precedent for digital taxation frameworks worldwide.