Brown Supports Gambling Tax Reform to Fight Child Poverty

Addressing Child Poverty Through Gambling Tax Reforms

Gordon Brown, the former Prime Minister of the United Kingdom, has called for an increase in taxes on online casinos and slot machines to help fund efforts aimed at lifting children out of poverty. His proposal is backed by research from the Institute for Public Policy Research (IPPR), which suggests that reforming gambling taxes could generate £3.2 billion—enough to eliminate the two-child limit and the benefit cap. These policies, according to the think tank, have the potential to lift half a million children out of poverty and reverse years of hardship for low-income families.

The two-child limit restricts child tax credit and universal credit to only the first two children in most households, while the benefit cap limits the total amount of benefits a household can receive. Both policies have been criticized for disproportionately affecting low-income families and contributing to rising levels of child poverty.

Brown emphasized that this move would be the “first crucial step in the war we must wage against child poverty.” He pointed to the IPPR report, which highlights the need to ask the highly profitable gambling industry to contribute more to address the UK’s unmet social needs. The former leader stressed that taxing gambling more fairly could fully fund the removal of these policies, helping to lift children out of poverty and build a better future for the next generation.

The government is expected to release a child poverty strategy in the autumn, and various campaign groups are urging it to commit to ending the two-child limit. However, the delay in publishing the strategy has raised concerns among critics, who argue that more children will fall into poverty during the intervening months.

Brown has been involved in a government consultation on child poverty as ministers prepare to present plans to tackle the issue this autumn. Originally scheduled for the spring, the publication was postponed to align with the budget. Critics believe this delay puts more children at risk.

In a recent article in the Guardian, Brown expressed sympathy for Rachel Reeves’ “fiscal inheritance” but stressed the urgent need to act on poverty. He recalled his own childhood in a mining and textiles town where unemployment had started to take a toll, saying he had not seen such deep poverty since then.

The IPPR has proposed specific changes to gambling taxes, including increasing the tax rate on online casinos from 21% to 50%, raising the tax on slots and gaming machines from 20% to 50%, and increasing general betting duty on non-racing bets from 15% to 25%. These changes would bring other sports in line with the rates paid by horseracing.

According to the IPPR, these tax increases would not reduce overall government revenue. Henry Parkes, principal economist and head of quantitative research at IPPR, argued that the gambling industry is highly profitable yet often exempt from paying VAT and corporation tax, with many online firms based offshore. He added that gambling causes serious harm, especially in its high-stakes forms, and that it is fair to ask the industry to contribute more given the current levels of child poverty.

However, the Betting and Gaming Council has rejected the proposals, calling them “economically reckless” and “factually misleading.” A spokesperson for the council warned that further tax rises could drive people to the growing, unsafe, unregulated gambling black market, which does not protect consumers and contributes no tax. They also highlighted that the sector has already lost over a billion pounds in revenue due to previous government reforms, arguing that additional taxes would harm punters, jobs, growth, and public finances.

Despite the opposition, the debate continues over how best to address child poverty and whether the gambling industry should bear a greater share of the responsibility. The IPPR's research underscores the potential impact of targeted tax reforms, while industry representatives caution against the risks of further regulation.