Every week seems to bring with it a new dimension to the ever escalating argument about UK betting tax as the weekend closes with the British Horseracing Authority (BHA) expanding its campaign yet again.

Yesterday (Sunday 26 October), the BHA published an open letter addressed to Rachel Reeves, Chancellor of the Exchequer, urging a rethink of the proposals to increase betting tax in some form in the Autumn Budget.

The letter is signed by 363 stakeholders in the sport including jockeys, trainers, racecourse managers and other industry associations like Scottish Racing. The signatories stated their aim to “express our deep concern over Treasury proposals to merge betting and gaming taxes into a single Remote Betting and Gaming Duty”.

“These changes would have devastating and irreversible consequences for the horse racing
industry, with a severe impact on the tens of thousands of livelihoods and businesses it supports across the country,” the letter reiterated.

The budget will be announced on 26 November, and Reeves is widely expected to plan some form of gaming tax increase. The outcome most people expect is a merger of the three types of gaming duty to create one 21% betting tax – morphing the already 21% Remote Gaming Duty (RGD) with the 15% General Betting Duty and Pool Betting Duty to create the unified ‘Remote Betting and Gaming Duty‘ (RBGD) referred to by the BHA.

The BHA has been protesting the rumoured tax hikes for the past few months, launching the #AxeTheRacingTax campaign in July and taking unprecedented strike action in September – a move which drew the ire of its counterparts on the betting sector.

What will a betting tax cost racing?

As expected, the prospect of betting tax going up has led to a lot of number crunching.

For the BHA and other racing stakeholders, the impact of a heavier betting tax on the sport’s finances and those of its partner industries has obviously been of precedence – and in turn making this clear to the government.

Yesterday’s letter mapped out the sport’s fiscal concerns. The BHA projected that a 21% RBGD betting tax would cost the sport £66m annually and threaten jobs, investment and various businesses that support the sport, like media and hospitality for example.

Some familiar figures have been re-raised. The BHA argues that an increase in betting tax could threaten horse racing’s economic contribution, citing the sport’s £4.1bn contribution to the British economy, the £300m in annual tax revenue it generates, and the 85,000 jobs it provides.

The 21% betting tax is also just one scenario. A worst case scenario for both the betting and racing industries would see a 40% RGBD, which the BHA asserts would cost racing $160m a year and lead to 2,000 job losses in the first year of its implementation.

“We are deeply concerned about the broader implications of these proposals,” the letter read.

“This is not just about Britain’s second largest spectator sport, for which it is world renowned – it’s about the thousands of local businesses it sustains and the workers and communities whose livelihoods depend on a thriving racing industry.

“From trainers, breeders and stable staff to racecourse employees, hoteliers, local pubs, taxi drivers and small independent fashion shops, racing is indispensable to local economies in rural areas and towns in every corner of the UK.

“The proposed changes would irreversibly damage this, destroying our businesses, hollowing out local infrastructure, and putting at risk thousands of good, local jobs in parts of the country where alternative opportunities are often limited.”

This is hardly the first time in recent history that the BHA, and horse racing at large, has found itself at loggerheads with the government over policy. The Gambling Act review from 2020-2023 saw a heated debate around affordability, with the BHA and others protesting widely touted ‘affordability checks’.

The BHA often cited potential losses in the hundreds of millions as a result of affordability checks. Its fears have continued following the implementation of what the UK Gambling Commission (UKGC) calls ‘light-touch’ financial risk checks, which the BHA believes have contributed to a £3bn deficit in horse racing’s finances.

The affordability checks issue was one in which the BHA routinely found itself on the same side as its traditional political allies – the bookmakers. The debate around betting tax has seen somewhat of a schism, however.

BGC bangs the drum again

The aforementioned horse racing strike was harshly criticised by the Betting and Gaming Council (BGC), the UK’s trade association and standards body for the regulated betting industry. The BGC was particularly unhappy with the lack of notification and consultation from racing ahead of the strike’s announcement.

There are still some cases of racing and bookmaking working together – Flutter Entertainment’s planned ‘Future of Racing Summit’ in partnership with the BHA at York Racecourse in February being a good example of this. However, in the aftermath of the racing strike, relations between the two appear to remain frosty.

This has not stopped the BGC from continuing its own campaign trail. The association issued a statement today condemning the Treasury’s forthcoming ‘tax raid’ on the gambling sector, though the Treasury would probably argue that no such raid has been fully confirmed.

The BGC remains particularly critical of the Institute for Public Policy Research (IPPR) and Social Market Foundation (SMF) argument, backed by former PM Gordon Brown, that a betting tax merger could be used to pay for the scrapping of the two child benefit cap.

Opponents of this policy argue it is naive, while the BGC continues to cite the economic impact on the industry. It has cited research suggesting that the proposal would endanger 40,000 jobs, channel £8.4bn in stakes to the black market, and reduce the sector’s economic contribution by £3.1bn.

“It is now clear these further tax rises are a direct threat to British jobs and economic growth,” said Grainne Hurst, CEO of the BGC. “The figures speak for themselves – tens of thousands of jobs lost, billions diverted to the black market, and a possible £3 billion hit to the economy.

“Tax raids like those proposed would mean fewer betting shops, casinos and bingo halls, fewer jobs, and a huge boost to the growing, unsafe gambling black market, while not raising anywhere near the tax claimed.”

Reeves has found herself caught in the firing line between the BGC, BHA and other opponents of a betting tax hike and the SMF, IPPR, former Prime Ministers and over 100 sitting Labour MPs.

However, the Chancellor has given some indication of which way she is leaning. At the Labour conference last month, Reeves said that gambling firms should ‘pay their fair share’, and operator accountants and finance teams would be wise to prepare accordingly ahead of 26 November.