Racing should be taxed separately from all other forms of betting, UK industry group says
The British Horseracing Authority has made a formal submission to HM Treasury.
UK.- The British Horseracing Authority (BHA) has today submitted the sport’s formal response to HM Treasury’s consultation on remote gambling duties, outlining opposition to harmonisation and calling for British horseracing to be taxed at a different and lower rate to all other forms of betting.
The industry body says a tax hike for bookmakers on racing betting in the Autumn Budget would be the third leg of a triple whammy of financial threats caused by government policies, including affordability checks on racing bettors and a lack of horse racing levy reform, which it says jeopardise the future of the sport in Britain.
The BHA joined the gambling sector in calling for the government to ditch plans for a new unified Remote Betting and Gaming Duty (RBGD). It launched a campaign this month with the slogan ‘Axe the Racing Tax’, urging all horseracing stakeholders to collectively lobby the government.
The government’s proposal is to merge the current three separate tax categories – Remote Gaming Duty, General Betting Duty, and Pool Betting Duty – into one. The current Remote Gaming Duty, which covers online slots, poker, bingo and similar, is levied at 21 per cent of gross profits based on a place of consumption (POC) model.
General Betting Duty varies depending on vertical: fixed-odds betting is taxed at 15 per cent, sports spread betting at 10 per cent, and financial spread betting at 3 per cent. Pool Betting Duty is charged at 15 per cent on gross profits, applicable to sports pools only (excluding horse and greyhound racing).
Industry groups, including the Betting and Gaming Council argue that the change would mean a tax hike for many bookmakers in the Autumn Budget. The BHA says economic analysis it commissioned shows that aligning the current 15 per cent tax rate paid by bookmakers on racing with that of online games of chance – currently taxed at 21 per cent could hit racing’s finances to the tune of £66m in lost income via the Levy, media rights and sponsorship.
In a worst-case scenario, the sport could lose £160m of income a year, it says. This would put thousands of jobs at risk and severely impact towns and rural communities across the country, it warns, while also hampering British racing’s work on equine welfare.
In calling for a tax carve out on racing betting, the sport’s submission outlines the precedent for horseracing receiving individual treatment in the tax system, with operators already paying a unique tax on British racing in the form of the Horserace Betting Levy. The BHA says the reason betting on the sport is taxed at a lower rate than online games is precisely to recognise the racing’s dependence on revenue from betting.
Today’s submission comes ahead of the Treasury’s public consultation deadline on Monday (July 21). Treasury civil servants will review responses in the coming weeks before making recommendations to ministers. It is expected that Treasury ministers will make a final decision on whether to press ahead with plans to harmonise remote gambling duties ahead of the budget, which expected in October.
The BHA’s submission has the backing of British racing’s key stakeholder groups including the Jockey Club, Arena Racing Company, the Racecourse Association, the Racehorse Owners Association and the National Trainers Federation.
Brant Dunshea, acting chief executive of the British Horseracing Authority, said: “British racing’s stakeholders are united in their opposition to the Treasury’s proposals to harmonise remote gambling duties.
“Horseracing has a uniquely symbiotic relationship with betting and the Government must recognise this. It is why we are calling for betting on racing to be taxed at a different and lower rate to all other forms of betting.
“Thousands of jobs and livelihoods in towns and rural areas across the country are supported by the financial contributions of the betting industry through Levy, media rights and sponsorship. If the Chancellor delivers this tax bombshell at the Autumn Budget, not only will jobs be lost but the future of Britain’s second-largest spectator sport will be in jeopardy.
“This is why it is vital that the Government carefully considers the argument made by all British racing’s stakeholders and works alongside us to protect a cherished national institution. We are also urging fans of the sport to write to their MP to ask them to put pressure on the Chancellor to Axe The Racing Tax and our campaign will be reaching wider audiences in the months leading up to the Budget.”
