The Betting and Gaming Council (BGC) has raised concerns over the UK Treasury’s proposal to implement a simplified tax measure for the gambling industry, fearing it could act as a ‘Trojan horse’ with far-reaching implications. This development follows the Autumn Statement by Chancellor Jeremy Hunt, which included a consultation on proposals to unify remote betting into a single tax framework, replacing the existing three-tax structure.
Adversely Affect UK Racing
Currently, the UK gambling tax system comprises a general betting duty and pool betting duty taxed at 15% of operators’ gross profit. In comparison, remote gaming duty on games of chance (online casino) is taxed at 21%. The BGC has expressed apprehension that a unified tax rate, potentially at 21%, could adversely affect UK racing. The council warns that higher betting duties could lead to reduced racing margins, fewer punter offers, and diminished funding for the sport’s promotion and sponsorship.BGC CEO Michael Dugher has voiced concerns about the potential negative impact of new tax increases on horse racing’s finances,“This sport relies heavily on betting operators for its success. Yet the Government appears determined to draft measures that shrink the industry with huge ramifications for other sectors, like horse racing.“What’s worse is that the Treasury didn’t bother to consult or even inform DCMS, the department responsible for betting and racing. It seems they are high on tax but low on joined-up government.”The debate on increasing gambling taxes coincides with a period where industry income is already under pressure due to operators adapting to affordability checks on customers. The proposed Gambling Review measures include a statutory levy to fund Research, Education, and Treatment (RET) for gambling-related harm and escalating costs for betting operators to support horse racing.The government’s White Paper, published in April, proposed measures expected to cost online operators over £895 million in Gross Gambling Yield. The BGC’s top members, including Entain, Flutter, bet365, 888/William Hill, and Betfred, are preparing to increase their financial contributions to horse racing. In 2022, these companies collectively paid £270 million for media rights to stream live races, a figure projected to rise in the coming years.
Fear of Further Tax Hikes
Dugher has expressed fears that the so-called tax simplification could be a guise for further tax hikes on businesses, potentially risking jobs, investment, and the global competitiveness of British horse racing. He emphasized the need for growth-focused policies, expressing concern over the increasing challenges facing the betting and horse racing industries.Horseracing, the UK’s second most popular sport, has seen a decline in betting participation over the years. The DCMS is set to review the Horseracing Levy, which supports the sport’s development, breeding programs, and veterinary care. The review aims to ensure the Levy effectively contributes to the industry, with betting operators and the British Horseracing Authority advocating for reforms to enhance commercial returns from the levy and media rights.