The UK government has confirmed plans to introduce a gambling levy, which has sparked concerns about the potential financial consequences for charities. Set to come into effect in April 2025, the levy will impose a statutory fee on gambling operators, generating approximately £84 million annually. The funds raised will be allocated to research, prevention, and treatment of gambling-related harms. However, while the initiative aims to address the negative impacts of gambling, charities have warned that it could divert critical funding away from good causes, particularly society lotteries.
The new levy will be enforced through secondary legislation, and society lotteries, such as the People’s Postcode Lottery, will pay a reduced rate of 0.1% of their gross yield. These lotteries have expressed concern that the levy could divert up to £1 million annually from the funds they generate for charitable causes. The People’s Postcode Lottery has already voiced its opposition to the government’s decision, emphasizing that the policy contradicts the “polluter pays” principle and could severely impact charities already grappling with rising operational costs, such as those resulting from increases in national insurance contributions.
A spokesperson for the People’s Postcode Lottery criticized the government for not considering the broader implications for charity funding, highlighting that charities would effectively be “forced to subsidize” efforts to mitigate gambling harms, which they do not cause. Despite this opposition, the charity GambleAware, which is set to receive some of the funds raised through the levy, welcomed the announcement. GambleAware expressed optimism that the levy would play a crucial role in safeguarding individuals from gambling-related harm.
The idea for a gambling levy was initially proposed under the previous Conservative government, and the current Labour government has now confirmed its intentions to proceed with the plan. In its most recent proposals, the Labour government suggested increasing the levy’s overall contribution to between £90 million and £100 million annually, surpassing the initial goal of £84 million. It also outlined a revised structure for the levy, proposing a rate of 1.1% for online gambling operators, 0.5% for casinos and bookmakers, and 0.2% for bingo.
Fiona Twycross, the gambling minister, emphasized that gambling operators must maintain their current financial contributions until the levy comes into effect. She also stressed the importance of ongoing collaboration between statutory bodies and third-sector organizations to ensure that individuals in need continue to have access to essential services as the new system is implemented.
The government confirmed that the funds raised through the levy would be allocated in the following manner: 20% for research, 30% for prevention efforts, and 50% for the treatment of gambling-related harms. Zoë Osmond, the chief executive of GambleAware, described the levy as a “significant step” in protecting people from gambling harm. She expressed that the introduction of the levy is a long-awaited move and aligned with the organization’s advocacy for a statutory system to ensure sustained support for individuals affected by gambling issues.
In addition, Osmond reiterated GambleAware’s commitment to supporting the new system, which is expected to build upon the successes of the National Gambling Support Network and other third-sector initiatives. By integrating these resources with the government’s new statutory framework, the sector hopes to improve access to treatment and support services for people facing gambling addiction.
Charity groups, however, remain concerned about the financial ramifications of the levy. Society lotteries, which have become a significant source of funding for many charitable organizations, are particularly worried about how the tax will impact their ability to support good causes. While the intention behind the levy is to address the harms caused by gambling, these charities argue that diverting funds from lottery proceeds undermines their ability to meet growing demand for their services.
As the government prepares for the gambling levy’s implementation, both charities and industry stakeholders are closely monitoring the development of the policy. Many hope that the government will reconsider the proposed structure or offer solutions to mitigate the potential financial strain on charity funding. With the UK’s charitable sector already facing increased financial pressures, the balance between addressing gambling harms and supporting good causes will remain a point of contention as the plan moves forward.
Overall, the gambling levy represents a crucial step in addressing the social harms caused by gambling. However, its impact on charity funding and the broader voluntary sector will need careful consideration to ensure that it does not inadvertently harm the very causes it aims to support. The government’s engagement with charities and stakeholders in the coming months will be vital in ensuring that both the fight against gambling-related harms and the support for charitable causes can proceed harmoniously.
