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In a landmark policy move, the Labour government is set to introduce a statutory levy on gambling companies, expected to raise £100 million annually to address gambling addiction. This initiative, a key part of Labour’s social welfare agenda, would ensure a stream of investment in research, education, and treatment for gambling, replacing the widely criticized voluntary donation system.

Labour’s Stand Against Gambling Harms

The proposed reform marks a significant departure from previous approaches. Online gambling operators will be required to contribute 1% of their gross gambling yield (GGY), while land-based establishments such as betting shops and casinos will pay 0.4%, reflecting their higher operational costs. Operators with GGY below £500,000 will be exempt from the levy.

This measure is one of the most substantial regulatory changes in recent years, reflecting Labour’s commitment to curbing the social costs of gambling. For years, the voluntary system allowed gambling companies to decide their contributions and where the funds went, leading to unpredictable support for crucial addiction services.

Labour Party sources have emphasized that the new levy is part of their broader plan to reduce societal harm caused by industries that disproportionately profit from vulnerable populations.

How the Levy Will Be Used

The revenue generated by the levy will be allocated across three key areas. A significant portion will support the NHS in expanding its treatment services for gambling addiction, ensuring that those affected can access professional help. Another part of the funds will go toward prevention campaigns, educating the public about the risks of gambling and promoting safer practices. Additionally, research into gambling-related harms will be intensified, with UK Research and Innovation (UKRI) leading a multidisciplinary program aimed at mitigating the industry’s societal impact.

Labour has assured critics that the funds will be managed independently, preventing any influence from gambling operators over their distribution or use.

Industry and Political Responses

The Betting and Gaming Council (BGC), which represents the gambling industry, has voiced cautious approval of the levy but has warned of potential unintended consequences. While supporting the principle of sustainable funding, the BGC has called for a sliding scale to account for the financial realities of smaller operators and land-based venues. It has also raised concerns that higher financial burdens might lead to job losses and drive consumers toward unregulated gambling markets.

However, reform advocates have hailed the Labour government’s initiative as a transformative step. Iain Duncan Smith, a prominent campaigner for gambling reform, praised the levy as a long-overdue measure that forces the industry to take responsibility for the harm it causes. Labour MP Carolyn Harris, who has been a vocal critic of gambling practices, also applauded the move, calling it "a significant victory for vulnerable individuals and families impacted by gambling addiction."

Labour’s Broader Strategy

This statutory levy follows Labour’s promises of addressing perceived systemic issues in the gambling sector. Gambling addiction has emerged as a growing public health issue in the UK, with recent reports highlighting its devastating effects on individuals and communities.

The gambling sector contributes £7.1 billion annually to the UK economy and generates over £4.2 billion in taxes. Labour’s policy seeks to implement stricter regulation and industry accountability while preserving the sector’s significant economic contributions.

Sources:

BBC News. (2024, October 17). Gambling levy could raise £100m for NHS treatment. Retrieved from https://www.bbc.com/news/health-67132720
UK Government. (2023). Consultation on the structure, distribution, and governance of the statutory levy on gambling operators. Retrieved from https://www.gov.uk/government/consultations/consultation-on-the-statutory-levy-on-gambling-operators/consultation-on-the-structure-distribution-and-governance-of-the-statutory-levy-on-gambling-operators

Labour Government to Enforce £100 Million Gambling Levy to Combat Addiction