As Chancellor Rachel Reeves looks to increase the tax burden on the UK gambling industry, a reported exemption from any rises for the horse racing industry could indicate a nightmare scenario for the casino sector.
Contrasting responses to the report underline a betting industry that is at odds, with the British Horseracing Authority (BHA) further pushing its #AxeTheRacingTax campaign, calling on the Treasury to drop its proposals.
Meanwhile, the Betting and Gaming Council (BGC) is adamant that higher taxes on any part of the betting industry will see racing “ultimately pay the price”.
No hike for horse racing
The Telegraph has reported that the horse racing betting levy won’t be increased, nor will duty on bets placed at horse racing events in person, unlike the rumoured rises for the casino and iGaming sector.
This direction aligns closely with the tax proposals issued by the Institute for Public Policy Research (IPPR) earlier this year, which former UK Prime Minister Gordon Brown has since endorsed.
IPPR’s proposals called for a 50% tax on online and retail slots, rising from 21% and 20%, as well as the general betting duty levied on bookmakers to increase from 15% to 25%. Nonetheless, the group requested that the general betting duty rates and horse racing betting levy board rates should stay at 15% and 10%.
The BHA defended the sport earlier this year with its #AxeTheRacingTax campaign, bringing attention to the negative impact that a tax increase would have on UK racing, including the funding challenges.
Highlighting the campaign was the Racing’s Cancelled Day on 10 September, which brought attention to the sport and the potential tax hike across various spaces, including parliamentary questions and media outlets.
The walkout brought the industry into conflict with the BGC, which expressed its disappointment since operators were apparently not consulted before the protest took place, despite the two bodies sharing a common goal.
When asked about the Telegraph’s recent report, a BHA spokesperson told iGaming Expert: “We do not wish to comment on speculation ahead of the Budget which is still three weeks away.
“Over the last few months, the Axe The Racing Tax campaign has consistently called on the Treasury to drop its proposals – as set out in its consultation paper published in April – to harmonise online gambling duties into a single rate due to the unintended and devastating consequences this would have for British Racing.
“We are continuing to focus on ensuring this message is heard within the Government in advance of the Budget.”
Have casinos and iGaming done enough?
The Telegraph’s report will leave many questioning whether enough has been done to back casinos in the face of tax increase speculation. The BGC has long been against tax hikes, citing consequences such as potential black market growth and job losses.
A recent report by the independent analysis firm Ernst & Young LLP, commissioned by the BGC, stated that the IPPR proposed tax rises would put more than 40,000 UK gambling industry jobs at risk, channel £8.4bn in wagers to illegal operators and impact the sector’s contribution to the country’s economy by £3.1bn.
Last week, during a parliamentary hearing in front of the Treasury Committee, the standards body staked its case against such tax increases for gambling, arguing that tax increases would drive players to black market operators who don’t have protections in place, unlike the regulated industry.
However, the Treasury Committee did not appear overly receptive to industry arguments and was sceptical of the BGC-commissioned research throughout the hearing. The defence of the BGC towards the industry also drew criticism from the mainstream media, specifically when it came to her adamant denial that any part of gambling is a contributor to social harm.
Grainne Hurst, CEO of the BGC, said during the hearing: “The industry has a lot of regulations in place voluntarily and the white paper to raise those standards. We track behavioural triggers, late-night play, chasing losses, so we make sure players are staying within the regulated space.”
Several operators that are BGC members – Rank Group, Entain, evoke and Betfred – have vocalised their protest against UK gambling tax hikes as well as the impact increases will have on their operations, especially in the land-based sector.
In response to the Telegraph report, a BGC spokesperson told iGaming Expert: “Betting and racing enjoy a long-standing, symbiotic relationship, and one cannot thrive without the other.
“If the Government chooses to impose higher taxes on any part of the betting industry, it is racing that will ultimately pay the price. Less investment, less sponsorship, and fewer punters mean less funding flowing back into the sport. You cannot protect racing by weakening the very industry that sustains it.
“Our members already contribute over £350m every year to British racing, alongside £4bn in taxes and supporting 109,000 jobs across the country. A further tax raid risks undermining those contributions, damaging the long-term future of racing and the thousands of livelihoods it supports.
“We urge the Government to think carefully before taking decisions that could drive investment away from the regulated industry and into the black market – putting jobs, revenues, and the future of British racing in jeopardy.”
In the meantime, the gambling industry will wait with baited breath on the government’s decision regarding tax, which will likely come when the next UK budget is announced on 26 November.
