Chancellor doesn't rule out raising gambling taxes after report said it could lift 500,000 children out of poverty

The chancellor has declined to rule out raising taxes on gambling after a thinktank said the move could raise £3.2bn for the public coffers and cover the cost of lifting 500,000 children out of poverty.

According to the Institute for Public Policy Research (IPPR), hiking taxes on online casinos and slot machines could raise enough revenue to fund scrapping the two-child benefit cap, with the organisation arguing that there is "no other measure which provides comparable headline child poverty reduction per pound spent". The proposals have been backed by former prime minister Gordon Brown, but the Betting and Gaming Council says they are "economically reckless" and could drive punters towards the black market.

The chancellor has not ruled out taking forward the proposals, telling broadcasters that a review into gambling taxes is under way, and policies will be set out at the budget in the autumn. Money blog: Interest rate cut to lowest level in more than two years The IPPR says in its report that the chancellor should consider increasing taxes on online casinos from 21% to 50% and raising those on slots and gaming machines from 20% to 50%, as well as raising general betting duty on non-racing bets from 15% to 25% which it said would bring other sports in line with the rates paid by horse racing.

These measures could bring in £3.2bn for the Treasury, which would cover the cost of lifting the two-child benefit cap. The cap was introduced by the Conservative government in April 2017, and it restricts universal credit and child tax credits to the first two children in a family, where the third or subsequent children are born after this date.

According to the thinktank's analysis of data from the Department for Work and Pensions, 115,000 families are affected, with an average financial impact of £60 per week. Overall, the policy is keeping over 450,000 in poverty currently, which is set to rise to 550,000 by the end of the decade, it adds.

The IPPR says raising these taxes is unlikely to reduce overall revenue for the Exchequer because firms are likely to "seek to protect their bottom lines by worsening odds.