Amid ongoing disputes over horseracing’s newly proposed changes to the gambling tax, Flutter has voiced strong support for the British Horseracing Authority’s latest campaign.
Announced earlier this month, the campaign represents the sport’s calls for fair and sustainable funding, but has also warned against proposals to increase duty on other gambling products.
The Treasury’s consultation on aligning tax rates across betting and gaming closes on Monday. Currently, sports betting is taxed at 15%, while casino-style games face a 21% rate.
Proposals to harmonise the two is what has sparked the most concern across the industry, and Flutter now makes its input in emphasising that such a move would damage the regulated sector and inadvertently harm racing itself.
“We would agree with almost every point the BHA is making,” Sebastian Butterworth, Strategic Racing Director at Flutter UKI, told the Racing Post, referring to the BHA’s warning that plans of harmonisation could create a severe financial threat to the sport.
“Racing is facing immense pressure from rising costs and ongoing uncertainty around funding. The BHA has done a superb job of highlighting those issues.”
“Where we would disagree is the tacit suggestion that, in order to shield racing, Chancellor Rachel Reeves should increase the betting duty on other sports from 15% and push through an eyewatering increase in gaming duty from the current 21%.”
Flutter rejected the notion of “ring-fencing” racing from the rest of its operations, arguing that betting and gaming are increasingly interconnected.
“There is talk of separate wallets and ring-fencing racing from the activities on the other side of our business, as though tennis and online bingo are somehow beneath those who much prefer to head to Thirsk or Sandown in search of winnings,” Butterworth said.
“But the businesses are not separate. An increasing proportion of revenue in racing across Flutter comes from customers who initially bet on other products, be that football or slots. Roughly a third of customers who sign up with Paddy Power, Betfair and Sky Bet to play gaming end up betting on racing every year.”
A bigger picture
Flutter also pointed to the evolving behaviour of UK bettors, especially in products such as online bingo which have grown in popularity as high street bingo halls have experienced a decline.
“It’s too easy for critics to look down their noses at customers who game online,” said Butterworth. “Take the Great British institution of bingo – the number of bingo halls has halved since 2005.
“More customers are coming to our gaming sites to play with their virtual dibbers and dabbers. They would be hit by a gaming duty rise. So would those who enjoy a game of Fishin’ Frenzy or taking on their mates at poker.”
“Defending gaming isn’t to the detriment of racing, which absolutely remains a core part of Flutter’s offer. But we simply believe the government would be wrong to put up duty on any form of gambling.”
Flutter estimated that doubling gaming duty would cost the UK gambling sector around £1bn – a figure it warns would lead to job losses, reduced investment as well as long-term damage to sports like racing that rely on a healthy, regulated industry.
“A tax rise won’t help achieve that goal – be that on racing, other sports or gaming. It won’t make racing more sustainable and it will reduce the amount of money available for the gambling sector to invest.”
The warning comes as racing increases political lobbying ahead of the consultation deadline.
A Racing Post survey revealed only six of 23 Labour MPs in racing constituencies responded, though York Central MP Rachael Maskell expressed support for tax harmonisation, calling it “a positive step” for redistribution.
York Racecourse, which also backs the BHA’s campaign, confirmed ongoing engagement with the MP. The BHA has already been encouraging racecourses, alongside other stakeholders, to engage with MPs as much as possible as tax raises loom.
The Betting and Gaming Council (BGC), the standards body for UK betting and gaming, has also been expressing concern about tax raises. However, some sections of betting and gaming may have a difference of opinion with racing, which believes it should be taxed differently to casinos due to its sporting contributions and perceived differences in harm.
Regardless, the BGC has also focused on the impact tax raises could have on racing, though it has also reiterated one of its biggest talking points – the threat of the black market to both legal UK betting and consumers.
A new YouGov poll commissioned by the BGC found that 28% of regular punters would consider moving to the black market if promotions and offers were cut due to higher taxes.
“Punters are clear – get the balance on tax and regulation wrong and you hand a competitive advantage to the black market where operators pay no tax, contribute nothing to British sport and offer no safer gambling protections,” said BGC CEO Grainne Hurst.
“Any tax hike would be catastrophic, not just on our members, but also on sports like racing, football, rugby league and darts.”
