The Conservatives are becoming increasingly vocal in the betting regulation debate, warning that Treasury plans to raise gambling taxes could push punters toward the black market and seriously hit British racing. 

With Chancellor Rachel Reeves expected to announce changes to the three existing betting taxes – Remote Gaming Duty, General Betting Duty and Pool Betting Duty – the stakes are high. The tax on bookmakers’ horse racing operations is set to rise from 15% to 21%, which would match the rate that online gambling companies currently pay.

Industry leaders are sounding the alarm. Bookmakers say higher taxes could make betting more expensive for consumers and inadvertently encourage unregulated gambling. Meanwhile, racing officials argue that the sport, worth billions to the UK economy, could face major financial setbacks. 

Although some prominent Conservative MPs like Ian Duncan Smith are vocal advocates of gambling reform – the veteran MP is leader of the All Party Parliamentary Group on Gambling reform (AAPG GR) – party leadership seems to be setting itself firmly in the camp of horse racing

Shadow Sports Secretary, Louie French MP, told City AM: “The unprecedented move to cancel racing on the 10 September highlights the urgency for the Government to change course and axe the proposed racing tax. 

“Rather than backing British racing and positive reforms that will unlock inward investment to our much loved sport, the Government’s latest tax proposals will further fuel the black market, hurting jobs, punters and racing in the process.”

Racing strike highlights the risk

The British Horseracing Authority (BHA) has this week taken the rare step of cancelling four fixtures on 10 September at Carlisle, Uttoxeter, Lingfield Park and Kempton Park. This is the first time racing has been called off directly in response to government policy. 

Meanwhile, BHA CEO Brant Dunshea emphasised we should “axe the racing tax and back British racing,” adding that the changes could devastate the industry, putting over 2,500 jobs at risk in the first five years and potentially cutting £330m from revenue.

The cancellations coincide with a Westminster protest event, where owners, trainers and jockeys will highlight the potential damage of the proposed tax.

Dunshea added: “British Racing is already in a precarious financial position and research has shown that a tax rise on racing could be catastrophic for the sport and the thousands of jobs that rely on it in towns and communities across the country.”

While opposition to the tax is widespread, the reasons differ. Racing groups focus on protecting jobs and revenue, whereas betting operators worry about driving customers to the unregulated market. 

Both see a unified tax as a potential threat, but gambling has not responded well to the BHA’s plans. The Betting and Gaming Council (BGC) was particularly critical, labelling the strike as an example of ‘futile political gestures’.

Labour divided

Even within Labour, opinions differ. MP Dawn Butler has recently campaigned for councils to have more power to stop new betting shops in disadvantaged areas. She said: “Why are there barely any betting shops in Canary Wharf but rows of them in places like Bethnal Green? It’s not by accident…it’s time to end it.”

However others, such as Richard Baker, stress the sector’s economic importance. He pointed out that betting contributes £6.8bn annually to the UK economy, £4bn in taxes and supports 109,000 jobs. 

“As a Labour MP, I want a tax regime that is fair, progressive and economically sound – one that protects the public, supports jobs, and rewards responsibility,” Baker said – though given the aforementioned APPG GR is largely made up of Labour MPs, Baker may be in the minority.

With the autumn Budget looming, all eyes are now on the Chancellor. The Conservative Party is positioning itself as the defender of the sport and the regulated betting industry, and the coming weeks will show whether their intervention can shape government policy.