The Conservatives have launched a barrage of criticism at the government on mooted plans for a tax raid worth up to £3bn on the gambling industry, with the shadow sports minister demanding the government “take the blinkers off”. 

Shares in British gambling firms plummeted on Monday morning amid reports of the tax raid, which would contribute a hefty proportion of the £22bn in savings the government says it needs to find.

But there have been concerns over the impact of the potential fund raise, with shadow sport minister Louie French insisting any such move by the chancellor Rachel Reeves in her Budget on 30 October would be comparable to “torpedoing a legal industry that already pays over £4bn in tax a year”.

French told City AM: “The market says it’s odds-on that the Labour government wants to raid gambling firms with sky-high tax rises in the same week they’re attempting to win investment.

“If true, this would be a terrible error, hammering an industry that employs tens of thousands and invests heavily in British sport. 

“Sharply doubling taxes on betting shops and online gambling sites risks wiping out firms’ profits. That means closures, job losses, and a black hole in sports funding, affecting everything from darts and snooker to football and rugby.”

Government need to take the blinkers off

James Wheatcroft, analyst at the investment bank Jefferies, said: “The proposals apparently being considered would all but wipe out bookmaker profitability in the UK, per our estimates.”

The potential hit on the gambling industry comes ahead of Premier League clubs adopting a voluntary ban on betting firms occupying lucrative front of shirt sponsorship vacancies from the 2026/27 season.

Added French, Conservative MP for Old Bexley and Sidcup, on the potential tax raid: “It would be a catastrophic blow to Britain’s much-loved race tracks, which rely on gambling for income. The racing industry would shrink without millions of people enjoying a flutter on the horses. But Labour’s tax would sink betting firms, depriving the industry of money.

“Instead of moving forward with sensible reforms that would help the long-term sustainability of sport and gambling, Labour’s tax raid on racing would see the government fall at the first hurdle, having been stuck in the stalls for three months since the election. 

“Labour needs to take the blinkers off. This socialist tax raid would be self-defeating as firms close and the black market grows further, torpedoing a legal industry that already pays over £4bn in tax a year.”