Gambling duties are not modelled: add the betting, gaming, machine and lottery duty rates and the gambling losses to charge them on #2586

What the engine does today

policyengine-uk charges no gambling duty. Gambling has no variable of its own: survey gambling stakes (Living Costs and Food Survey COICOP 09.4.3) sit inside the household input recreation_consumption. That input counts towards consumption, and so towards full_rate_vat_consumption, although gambling is exempt from VAT. No parameter covers General Betting Duty, Pool Betting Duty, Remote Gaming Duty, Machine Games Duty, Gaming Duty, Bingo Duty or Lottery Duty. HOUSEHOLD_TAX_VARIABLES and gov_tax include the excise duties added in #1876 but none on gambling, and the excise list in #1775 does not mention gambling.

The law

• General Betting Duty, Pool Betting Duty and Remote Gaming Duty: Finance Act 2014, Part 3 (ss.125–142, 143–153 and 154–162). They have been charged at the place of consumption since 1 December 2014.
• Machine Games Duty: Finance Act 2012, Schedule 24, rates in paragraph 9, since 1 February 2013.
• Budget 2025 changes: Finance Act 2026 s.86 (Remote Gaming Duty 40%), s.87 (remote betting rate, new FA 2014 s.127A) and s.88 (Bingo Duty repealed).
• Gaming Duty and Lottery Duty: HMRC Excise Notices 453 and 458.

Rates for 2026-27 (HMRC gambling duty rates):

• General Betting Duty: 15% of net stake receipts (stakes less winnings) on fixed-odds and totalisator bets; spread bets 3% (financial) and 10% (other). From 1 April 2027, 25% on remote bets other than bets on UK horseracing. Bets on self-service terminals in licensed premises, pool, spread and on-course bets keep their current rates.
• Pool Betting Duty: 15% of net pool betting receipts.
• Remote Gaming Duty: 40% of remote gaming profits from 1 April 2026 (21% from 1 April 2019; 15% before).
• Machine Games Duty, on net takings (payments to play less prizes): 5% where the cost to play is at most 20p and the prize at most £10; 20% where the cost to play is at most £5; 25% above £5.
• Gaming Duty (land-based casinos), on gross gaming yield per six-month accounting period: 15% on the first £2,686,000, 20% on the next £1,852,000, 30% on the next £3,243,000, 40% on the next £6,845,000, 50% on the rest. The bands are frozen for 2026-27.
• Bingo Duty: 10% of bingo promotion profits until 31 March 2026, then abolished.
• Lottery Duty: 12% of the price of a ticket, the only gambling duty charged on stakes rather than on stakes less winnings.

Why it matters

• Budget decisions on gambling duties cannot be scored.
  • Budget 2025 raised Remote Gaming Duty to 40% and created the 25% remote betting rate: +£810m in 2026-27 rising to +£1,155m in 2030-31, OBR-certified (HMRC TIIN).
  • For Autumn Budget 2026, a Machine Games Duty rise is reported to be under consideration: 20% to 25% on gaming machines in betting shops (The Times, 21 October 2026, as reported by the Racing Post).
  • Think tanks have costed larger changes: IPPR £3.2bn for 50% on remote gaming and machines and 25% on betting; SMF £275m–£458m for 40% on Category B machines.
• Receipts are material: about £3.6bn in 2024-25 (HMRC UK Betting and Gaming Statistics). The OBR's November 2025 forecast has £5bn in 2026-27 and £6bn by 2030-31.
• Official sources treat household incidence differently, so the model's choice should be explicit:
  • the OBR assumes operators pass on around 90% of the Budget 2025 rises through prices or payouts (EFO November 2025, para 3.40);
  • HMRC's TIIN says individuals are affected if the rise reaches them through odds or return to player;
  • ONS's Effects of Taxes and Benefits allocates betting taxes and the National Lottery to households;
  • HM Treasury's household distributional analysis leaves gambling duties out.

Proposed change

• Parameters for each duty's rates, with dates and references:
  • General Betting Duty, including the 2027 remote rate and its exclusions;
  • Pool Betting Duty; Remote Gaming Duty (15%, 21%, 40%); Machine Games Duty's three rates;
  • Gaming Duty's bands; Bingo Duty to 31 March 2026; Lottery Duty.
  • Annual calculations from 2024/25, as Add household alcohol, tobacco, vehicle and road fuel gas duties #1876 does for alcohol and tobacco.
• Inputs: household, annual, default zero, one per duty base:
  • net losses (stakes less winnings) on remote gaming; on remote betting, split into UK horseracing and other; on land-based betting, including self-service terminals; on pool betting; on gaming machines; on land-based casino games; on bingo;
  • spending on National Lottery tickets.
• Two documented simplifications:
  • Gaming Duty's bands apply to each casino's six-monthly yield, not to a household. Charge household casino losses at an effective rate (receipts over yield) held as a parameter, as Alcohol duty is not modelled: add the strength-banded rates and alcohol quantities to charge them on #1872 leaves small producer relief out of household incidence.
  • Machine Games Duty is charged by machine type, but reforms are proposed by premises (betting shops, adult gaming centres, with pubs and bingo halls carved out). A parameter splitting the machine base by premises, from Gambling Commission GGY, lets such a reform be expressed without per-premises household inputs.
• A household gambling_duty variable summing the duty components, assuming full pass-through to consumers as Add household alcohol, tobacco, vehicle and road fuel gas duties #1876 does, added to HOUSEHOLD_TAX_VARIABLES and gov_tax. Note the OBR's 90% in the documentation.
• For microsimulation: the inputs come from the data.
  • The LCF diary records gambling stakes and winnings by product: football pools, bingo, other lotteries, National Lottery draws and scratchcards, and bookmaker and tote betting (which also holds machines). It has no remote or land-based split.
  • Its recorded stakes come to about a seventh of ONS household spending on games of chance in 2024-25.
  • So the data must map them to duty bases with Gambling Commission GGY by sector, and the weighted totals must be checked against HMRC's betting and gaming receipts.
• Follow-up once the input exists: take gambling out of the VAT base.

Open questions for review: whether to expose a pass-through parameter rather than fix full pass-through; whether the premises split for Machine Games Duty belongs in the engine or the data; and how far back the rate history should go.

Part of the excise duties in #1775 (Workstream C), which should list gambling. Related: #1872 and #1873 (the same input-driven structure), #1876, and #1114 (the consumption response to direct-tax reforms).