New report wants lower taxes to protect tote betting on horseracing

A new report by the World Tote Association has revealed that pool betting on horseracing plays an important role in the sustainability of the sport globally. 

In doing so, the report’s author, Martin Purbrick, has argued that tote betting should be looked at differently from other forms of gambling. 

A total of 77 jurisdictions were analysed to highlight each market’s size and its contribution to society. One such example is Europe, where Purbrick went all the way back to 2009 for the sake of comparison. Back then, the market was taking care of around 170,000 race horses, and added an additional €6bn to the economy. 

Since then, the horseracing industry has grown significantly, with its annual economic impact currently standing at €21.8bn. The European and Mediterranean Horseracing Federation (EMHF) estimates that its members combined deliver a total of 28,077 races each year across the 350 available racecourses. This has also opened up the market for 155,000 jobs, and annual betting activity totalling €35bn. 

Titled “Tote Betting and Horse Racing: Tax, Responsible Gambling, and Contributions to Society”, the paper makes the argument that tote betting is inherently different from fixed odds betting. This is because profits from the former are not based on customer losses, but rather on a pool of betting with share customer winnings – with the tote operator only receiving a commission. 

Moreover, the report claims that tote betting is currently experiencing a problem with its structural tax across most countries, being at the same tax level as other forms of gambling that “pose a higher risk to consumers”. 

Purbrick further states that a higher taxation rate on tote betting has a reverse effect on gambling harm, driving more players towards the illegal betting markets. Ultimately, higher tax levels would prevent regulated tote betting from being able to compete with online illegal betting operators. 

To conclude, the report states: “If horse racing is to survive as a sport, it is essential that tote betting be differentiated from other forms of gambling in national policies. The main recommendation from this report is that different forms of gambling should be taxed at different rates. 

“In the case of tote betting, the tax rate should be lower to reflect lower harm levels and the sector’s contribution to horse racing and society as a whole.”

Hasse Lord Skarplöth, CEO of Sweden’s ATG, and Alex Frost, CEO of UK Tote, added: “We hope this report will be a useful update to policy makers on the significant role Tote betting plays in supporting horse racing around the world. 

“Members of the World Tote Association want to work with governments, gambling regulators and racing authorities to ensure Tote betting can continue to play a constructive, and growing role, in supporting the sport and wider society through safe, responsible and engaging betting activity.”