New Labour’s Old Guard Pressures Reeves to Make Casinos Pay Up

_{Blair and Brown resurface. (Image: PA Images/Alamy)}

As Chancellor Rachel Reeves prepares to deliver her first full budget later this month, pressure from former Prime Minister Gordon Brown is mounting for Labour to overhaul gambling taxes to fund the party’s long-promised campaign against child poverty.

Brown, who oversaw sweeping financial reforms during Tony Blair’s government and helped shape the 2005 Gambling Act, has re-emerged as a leading voice urging Reeves to make the industry “foot the bill.” Speaking on Sky News, he said: 

“We tax cigarettes at 80%, we tax alcohol at 70%, but the online gambling tax is 21%. So there’s a big case for change.”

Brown framed his proposal as a moral and fiscal necessity, arguing that the gambling sector can afford to contribute more. “Move the money from, if you like, the bad, by taxing it,” he said. “And put it to good, which is children taken out of poverty.”

Brown’s Return to the Fiscal Debate

For many inside Westminster, Brown’s renewed presence in the public debate carries symbolic weight. As Chancellor from 1997 to 2007, he introduced a uniform 15% betting duty on gross profits, a move that helped modernise the UK’s gambling landscape and coax operators back onshore.

Now, nearly two decades later, the former prime minister is backing calls from the Institute for Public Policy Research (IPPR) and the Social Market Foundation (SMF) to double the Remote Gambling Duty (RGD) from 21% to as high as 50%. The same reports suggest increasing General Betting Duty (GBD) from 15% to 25%, raising an estimated £3 billion, roughly the amount needed to lift the two-child benefit cap.

This marks a striking reversal from Brown’s earlier role as an architect of deregulation. In 2005, Labour’s gambling reforms were pitched as modernising Britain’s laws for the digital age. Today, Brown argues that a higher tax burden is “the fair way to target a profitable sector that can afford to help tackle inequality.”

Reeves’ Balancing Act

Reeves, the first female Chancellor in British history, faces a tough balancing act. The Treasury is under pressure to address a projected £22 billion fiscal gap while delivering on Labour’s pledge to reduce child poverty, a promise central to its 2024 election manifesto.

While Reeves has hinted that removing the two-child benefit cap is “on the cards,” she has stopped short of confirming gambling tax hikes as the funding source. Speaking to BBC Radio 5 Live, she said: 

“I don’t think that it’s right that a child is penalised because they are in a bigger family, through no fault of their own. We will take action on child poverty.”

That line echoes Labour’s past achievements, under Brown’s own chancellorship,  when the party lifted nearly one million children out of poverty through targeted welfare spending. Yet insiders say Reeves’ fiscal discipline and her reputation for prudence may lead to a more cautious rollout.

Industry Braces for Impact

The UK’s land based and online casino industry and betting sector is on alert. The Betting and Gaming Council (BGC) has spent months lobbying against a tax increase, arguing that higher duties will push consumers toward the black market. Between April and June 2025, the online gambling industry recorded a gross gaming yield (GGY) of £1.49 billion, a tempting revenue stream for the Treasury, but one the BGC warns is already under strain.

BGC CEO Grainne Hurst said the industry supports “well-balanced regulation and fair taxes” but cautioned against following examples such as France, Sweden, and the Netherlands, where higher duties have coincided with a surge in unlicensed play. 

“Britain has one of the safest gambling markets in Europe,” Hurst said. 

“If the Treasury isn’t careful, we could quickly end up like France or Sweden, with huge black markets contributing nothing in tax, offering zero player protection, and providing no funding for sport or the economy.”

However, recent parliamentary hearings suggest MPs are unconvinced. Both the IPPR and SMF dismissed the BGC’s black-market argument, claiming that tighter oversight and technology can mitigate the risks without reducing tax intake.

Political Promises and Policy Realities

Labour’s 2024 manifesto pledged to make tackling child poverty “a defining mission” of its first term, alongside commitments to maintain fiscal responsibility and grow the economy. But with limited headroom for borrowing, Reeves’ room to manoeuvre is shrinking.

If Labour scraps the two-child cap, introduced by the Conservatives in 2017, it will face scrutiny over how the move is funded. A tax rise on gambling could provide a politically palatable option: popular with progressive voters, defensible on moral grounds, and difficult for the opposition to criticise.

Yet such a decision would test Labour’s relationship with an industry it helped shape two decades ago. Brown’s return to the spotlight has revived memories of the Blair-era liberalisation that made the UK a global gambling hub, and the social backlash that followed.

For the casino sector, the stakes are clear. Reeves’ upcoming budget could determine whether gambling companies remain a reliable contributor to the Treasury, or become a political scapegoat in Labour’s effort to prove it can govern both ethically and economically.

The Legacy Question

Brown’s influence today underscores the cyclical nature of UK gambling policy. As Chancellor, he championed deregulation to modernise the economy; as elder statesman, he now champions higher taxes to address inequality. His intervention places Reeves in a politically delicate position, caught between fiscal pragmatism and moral imperatives.

With the budget just two weeks away, industry insiders are reading every signal from No. 11. Whether Reeves follows Brown’s advice could shape not only Labour’s economic legacy but also the future of Britain’s multibillion-pound casino and betting industry.