New Sin Tax Targets Online Gambling in the UK


If you live in the UK and enjoy online gambling, smoking cigarettes, or drinking wine, you may be in for an unpleasant surprise. The Chancellor’s latest budget reveals that these industries will be subject to a “sin tax”. Online gambling operations in the United Kingdom will face a hit of over £1bn over the next five years.

Fixed term stakes have been cut

Earlier this year, the government decided to cut the maximum stake that can be placed on fixed-odd betting terminals, otherwise known as FOBTs. Dramatically lowering it from £100 down to just £2. This triggered a major overhaul of gambling tax, which has taken effect from October 2018.

The Treasury plans to make up the projected shortfall by raising the tax on online casinos from 15% to 21%, generating £1.25bn in the same time-frame.

This move is set to anger FOBT campaigners who claim that FOBTs are addictive, and that left to their own devices, casinos are not doing enough to help curb the habits of their users and more was expected from the government.

They point out that this change is long overdue, as it has been put off since October last year. The government has been accused by opposition politicians of “allowing greed to triumph over good”, by failing to crack down on the industry. It is well documented that casinos, as well as other vices affected by the sin tax, offer a constant stream of income that lines the government’s pockets.

Does the sin tax pose a moral question?

The term ‘nanny state’ is often thrown around in reference to the government overstepping the line and taking charge of our private lives in some way or another. This can be a sensitive subject, especially when it comes to recent legislation like the ‘sugar tax’, or in this case the ‘sin tax’.

Much like sugar, we know that gambling can be highly addictive. While we make like to assume that most people who derive enjoyment from a classic game of slots are responsible adults, we have to accept the fact that some are not. Also like sugar, access to the world of gaming has never been so prevalent as it is today. Being highly accessible can be both a blessing and a curse. It can be hard for some people to resist, which is when the state has to step in.

When does gambling become a problem?

Access to online gaming is readily available. It provides enjoyment to a lot of people. According to a 2017 report by the Gambling Commission, over 2 million of us are regular gamblers. But, as the old proverb goes ‘everything in moderation’, and too much of a good thing can turn the tables. Gambling should be a fun and stress-free way to wind down at the end of a hard day’s work. However, gambling becomes an issue when you start to spend more than you can afford; when it starts to interfere with everyday life, then it’s a problem.

What does a sin tax solve?

Historically, a sin tax is a tax that is levied against things that are deemed to be detrimental to society. Alcohol, sweets, tobacco, and fast food have all been bedfellows of this tax in the past. This tax is meant, not to entirely stop, but to curb habits to a much less harmful level instead, while also generating tax revenue to help deal with the problems that they might create. In some instances, this helps, in others the public simply sees them as a sort of ‘punishment’ for their ‘sinful’ behaviour.