The government’s plans to introduce a gambling levy effectively forces charities to subsidise anti-gambling harms work, People’s Postcode Lottery has warned.

The government confirmed plans yesterday to implement a statutory gambling levy to strengthen gambling protections, but the plans have been criticised by society lotteries. 

The levy will be charged at a set rate for all holders of a Gambling Commission licence, ranging from 1.1 per cent to 0.1 per cent of their gross yield.

Society lotteries will pay 0.1 per cent, calculated as a proportion of the proceeds retained after good causes and prizes have been paid out, the government said. 

A spokesperson for the People’s Postcode Lottery, which manages lotteries for 20 charities, said the decision to implement the levy was “disappointing”, adding that it would mean “charities are in effect being forced to subsidise work to tackle gambling harms which are not caused by them”.

The spokesperson added that the decision “ignores the polluter pays principle and negatively impacts on charity funding at a time when they are already facing increased costs due to the National Insurance rise”.

The spokesperson added that it meant charities that have an external lottery manager to run their lottery would be levied twice, a move that they described as “bizarre”.

The spokesperson said: “There is absolutely no evidence that lotteries managed by an external lottery manager have a different level of gambling harm from those who do not, so it is illogical for them to be levied twice.”

But the charity GambleAware welcomed the decision.

A joint statement from GambleAware’s chief executive, Zoë Osmond, and its chair, Siân Griffiths, said: “The levy is also a crucial step towards ensuring continued support through a statutory system and is something we have been calling for since 2017. 

“This represents a significant step towards protecting people from gambling harm."

The topic was discussed in the House of Commons today, with Wendy Morton, the Conservative MP for Aldridge-Brownhills, asking civil society minister Stephanie Peacock: “Does she recognise that not-for-profit society lotteries will have to fund any levy due from their charitable return, which the sector, and I think many of us, feel amounts to a charity tax?”

Peacock replied: “Society lotteries will be charged the levy at the lowest rate of 0.1 per cent. I know that they are a vital fundraising tool for many charities, community groups and sports clubs up and down the country.

She added that it was her understanding that the levy would be charged after the money had gone to good causes.