Betting and Gaming Council Raise Concerns Over Potential “Trojan Horse” to Raise Taxes

The Betting and Gaming Council (BGC) has raised concerns regarding the Chancellor’s proposed simplification of gambling taxes. The Autumn Statement announced a consultation to unify the current three-tier tax system into a single tax structure. This system currently includes a 15% general betting duty and pool betting duty, contrasting with the 21% remote gaming duty on online casino games.

The BGC warns that any increase in betting duty could adversely affect horse racing revenues, leading to reduced margins, fewer offers for punters, and decreased sponsorship and promotion funds. This comes at a time when the industry is already facing financial pressures due to customer affordability checks, plans for a new statutory levy for Research, Education, and Treatment of gambling-related harm, and increasing costs to support horse racing.

This new tax proposal follows the Government’s White Paper published in April, which is expected to cost online operators over £895 million in Gross Gambling Yield. Concurrently, bookmakers are preparing for a record increase in contributions to horse racing next year, with media rights costs predicted to rise significantly.

In 2022, BGC members paid £270.1 million for live streaming rights and in-bookmaker race displays. These costs are expected to rise to £285.3 million this year, with an anticipated increase to £315.2 million in 2024. Last year, BGC members contributed £384 million to British horse racing through levies, media rights, and sponsorship, along with £125 million in marketing to promote racing and betting.

Horse racing, as the UK’s second-largest sport, attracts over five million attendees annually across 59 racecourses. However, its popularity has seen a decline, from 17% of the population participating in horse race betting in 2007 to 10% in 2018. The Department for Culture, Media and Sport plans to review the Horseracing Levy by next year, which supports the sport’s improvement, breeding, and veterinary care.

The betting industry, working with the British Horseracing Authority and stakeholders, seeks reforms to increase returns from the levy and media rights. Betting shops, crucial to the UK’s high streets, support 42,000 jobs and generate significant tax revenue. Yet, recent regulatory changes and COVID-19 impacts have led to over 2,000 shop closures and the loss of 10,000 jobs since 2019.

The regulated betting and gaming industry contributes significantly to the economy, taxes, and employment. The BGC emphasizes the importance of government reforms not pushing customers towards the unregulated online gambling market. A study by PWC indicated a rise in customers using unlicensed betting websites, with substantial amounts being staked.

In Great Britain, approximately 22.5 million adults bet each month, with 0.4% of adults identified as problem gamblers in the latest NHS Health Survey for England.

Michael Dugher, Chief Executive of the Betting and Gaming Council, said: “Any further 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.

“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.

“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”.

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