How Can Gambling Help Reduce Child Poverty?

The online gambling industry appears to be performing well in the UK, with growth trends continuing. For 2025 - 2026 alone, it is estimated that the industry will generate approximately  £3.8 billion  in tax revenue for the British government, according to an updated report released by the Office for Budget Responsibility in March 2025.

How could the gambling industry contribute to solving social problems such as child poverty, which has reached record levels? According to the   Child Poverty Action Group  (CPAG), 4.5 million children across the UK live in poverty, representing a 100,000 increase from the previous year.

The Institute of Public Policy Research (IPPR ) published a report estimating that £3.2 billion a year from gambling taxes could be used to fund removing the two-child benefit and help half a million children to overcome poverty.

Former Prime Minister Gordon Brown agrees that raising taxes for gambling operators would help to remove the cap that only protects families with the first two children.  

“The government can fulfil today’s unmet needs by taxing an undertaxed sector,” Brown said to the Guardian. “ Gambling won’t build our country for the next generation, but children, freed from poverty, will.”

However, the Betting and Gaming Council replies that hiking gambling taxes is "economically reckless" and can lead punters to choose “grey zone” casinos instead, hitting the UK stakeholders. Given the changes that have been implemented by the UKGC since July 25, these concerns are not unfounded.

The recently released  top list of new casinos not on GamStop , compiled by a group of gambling enthusiasts, is already shaking up the British online gambling market. The balance between the well-being of national license holders and society's needs must be found soon. Without effective regulation from the government authorities, this balance will remain out of reach.

The tax changes proposed by IPPR include a tax increase for online casinos from 20% to 50% and for general betting duty from 15% to 25%. The gambling sector currently enjoys a complete exemption from VAT.

The chancellor reassured the concerned parties that a review of gambling taxes is under examination and new policies will be set out in the budget in the Autumn.

The changes were entered in April 2017  under the Conservative government, restricting universal and child tax credits to families with the first two children. As a result, 115,000 families were affected by the cap, with an approximate £60 financial loss per week. Overall, 450,000 children live in poverty, and that number is expected to rise to 550,000 by the end of the decade.

The IPPR doesn’t think that raising the gambling taxes will negatively impact the overall revenue for the Exchequer. It is more likely that gambling operators will start to seek alternative options to “protect their bottom lines by worsening odds”.

The IPPR says raising these taxes is unlikely to reduce overall revenue for the Exchequer because firms are likely to "seek to protect their bottom lines by worsening odds", which means a "strong possibility of higher government revenue" than their forecasts expect.

Henry Parkes, principal economist and head of quantitative research at IPPR, in his statement claims, " The gambling industry is highly profitable, yet is exempt from paying VAT and often pays no corporation tax, with many online firms based offshore. It is also inescapable that gambling causes serious harm, especially in its most high-stakes forms.

"Set against a context of stark and rising levels of child poverty, it only feels fair to ask this industry to contribute a little more."

From the standpoint of child protection views, the ideas of gambling companies contributing to uplifting children, providing free meals, clothing, and necessary staff for unprivileged families, sound quite promising. They have support from all spectrums of society - social groups, NGO, authorities, even the Chancellor of the Exchequer - but do they have a stable ground to be turned into reality? The question stays open.

The Betting and Gaming Council appears uncertain whether the companies will comply with the tax rise. They already have to retool their platforms and physical spaces to the new changes that were set after July, forcing them to spend huge amounts to align their business with the new requirements, including mandatory levies. Adding a new tax increase won’t help the situation.

One of the spokesmen gave the following assessment that the possible proposals are " economically reckless, factually misleading, and risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn't protect consumers and contributes zero tax. Further tax rises, fresh off the back of government reforms which cost the sector over a billion in lost revenue, would do more harm than good - for punters, jobs, growth and public finances."