SBC News Voice of the Sports Betting Industry
The Treasury has been warned by the Betting and Gaming Council (BGC) not to impose a simplified measure on UK gambling taxes, branded as a ‘Trojan horse’ for the industry and its diverse stakeholders.
Last week’s Autumn Statement saw Chancellor Jeremy Hunt confirm that the Treasury would consult on proposals to bring remote betting into a single tax framework, replacing the current three-tax structure.
The current framework sees general betting duty and pool betting duty taxed at 15% of operators gross profit, whilst remote gaming duty, levied on games of chance (online casino), is taxed at 21%.
UK racing is viewed as the first casualty of a single-tiered tax rate, brought in at 21%, as the BGC warns that “any hike in betting duty would likely lead to lower margins on racing, fewer offers for punters and less funding to sponsor and promote the sport”.
BGC CEO, Michael Dugher, said: “New tax rises could be a hammer blow for horse racing’s finances, which are already threatened thanks to measures proposed by the Government in the recent white paper.
“This is a sport which relies heavily on betting operators for its success and yet the Government appears determined to draft in measures which shrink the industry with huge ramifications for other sectors, like horse racing.
“What’s worse, the Treasury didn’t bother to consult or even inform DCMS, which is the department responsible for betting and racing. It seems they are high on tax but low on joined up government.”
Parliamentary debate on increasing gambling taxes comes at a time when industry income has been hit by operators adjusting to the demands of affordability checks on customers.
The planned measures of the Gambling Review will see licensed operators contribute to a new statutory levy to fund Research, Education and Treatment (RET) to tackle gambling related harm and spiralling costs for betting operators to support horse racing.
The proposed new tax simplification plan comes soon after the Government’s White Paper, published in April, which included measures that will cost online operators in excess of £895m in Gross Gambling Yield.
The government was reminded that the BGC ‘top five members’ of Entain, Flutter, bet365, 888/William Hill, and Betfred, are preparing to ramp up their financial contributions to horseracing.
In 2022, they collectively paid £270m for media rights to stream live races, a figure that’s projected to rise to £285m this year and further to £315.2m in 2024.
The surge in costs is on top of the £384m contributed by BGC members in levies, media rights, and sponsorship deals, as well as the £125m spent on marketing efforts to promote racing and betting.
“There are genuine fears that any so-called simplification of the current tax structure will be nothing more than a Trojan Horse to further raise taxes on businesses,” Dugher added.
“This has the potential to risk jobs and investment and undermine the competitiveness of British horse racing on the global stage, placing its rich history and heritage in peril.
“We were promised an Autumn Statement that would deliver growth – the only thing growing is the list of worries for the betting and horse racing industries”.
Horseracing holds the position of the second most popular sport in the UK, with millions attending events across the nation’s racecourses.
Despite its significant following, the sport has seen a decline in betting participation from 17% of the population in 2007 to 10% in 2018. DCMS is set to review the Horseracing Levy, a fund that supports the sport’s development, breeding programs, and veterinary care.
The review aims to ensure the Levy contributes effectively to the industry, with betting operators and the British Horseracing Authority pushing for reforms that would enhance the commercial returns from the levy and media rights, ensuring the sport’s sustainability and growth.
