World Tote Association report calls for differentiated tax rate

The report suggests that tote betting should be treated differently from other forms of gambling.

Belgium.- The World Tote Association has published a new report that argues that tote betting should be taxed differently from other forms of gambling. The report says that pool betting on horseracing plays a vital role in the sustainability of the sport. 

Authored by Martin Purbrick, the report is entitled Tote Betting and Horse Racing: Tax, Responsible Gambling, and Contributions to Society. It analysed tote betting in 77 jurisdictions, focusing on each market’s size and social contribution.

The report notes that in Europe alone, the horseracing industry has an estimated annual economic impact of €21.8bn. The European and Mediterranean Horseracing Federation (EMHF) says its members deliver 28,077 races a year at 350 racecourses, supporting 155,000 jobs and generating annual betting activity worth €35bn. 

The report notes that in contrast with fixed odds betting, profits in tote betting are not based on customer losses but on a pool. The operator only receives a commission. It finds that the sector is struggling with tax in many countries due to being taxed the same as other forms of gambling, which the report argues poses a higher risk to consumers.

Purbrick claims that a high tax rate on tote betting has a counterproductive effect when it comes to gambling harm because it drives more players to illegal betting markets, preventing regulated tote betting from being competitive.

He concludes: “If horse racing is to survive as a sport, it is essential that tote betting be differentiated from other forms of gambling in national policies. The main recommendation from this report is that different forms of gambling should be taxed at different rates. 

“In the case of tote betting, the tax rate should be lower to reflect lower harm levels and the sector’s contribution to horse racing and society as a whole.”

Hasse Lord Skarplöth, CEO of Sweden’s ATG, has been a vocal advocate for differentiated tax rates and a fierce critic of the rise in gambling tax in Sweden. He commented on the report with Alex Frost, CEO of UK Tote. They said: “We hope this report will be a useful update to policymakers on the significant role Tote betting plays in supporting horse racing around the world. 

“Members of the World Tote Association want to work with governments, gambling regulators and racing authorities to ensure Tote betting can continue to play a constructive, and growing role, in supporting the sport and wider society through safe, responsible and engaging betting activity.”