A radical alternative to Treasury plans to \u201charmonise\u201d the rate of tax paid on online sports betting and high-risk casino gaming products received support from one of racing\u2019s key stakeholder groups on Monday when Paul Johnson, the chief executive of the National Trainers\u2019 Federation, said proposals from the Social Market Foundation thinktank, which will be published on Tuesday, \u201chave the full backing of the NTF\u201d.<\/p>\n
The Social Market Foundation report \u2013 titled The Duty to Differentiate: How gambling tax reform can raise revenue for the government, reduce harm to the public and save British horse racing \u2013 was written by Dr James Noyes, a senior fellow at the SMF, with a foreword by Alex Ballinger MP, a member of the all-party parliamentary group for Gambling Reform.<\/p>\n
In a sharp contrast to the Treasury\u2019s proposal for a unified rate of duty, Noyes argues that online gaming, on slots and other fixed-margin casino products such as roulette, is \u201cunder-taxed\u201d at its current rate of 21% of gross profits, pointing out that \u201cin some European jurisdictions, tax on remote casino is closer to 40%, and in some US states it is over 50%\u201d.<\/p>\n
The report suggests that the tax rate on gaming products should be raised to as high as 50%, while in one chapter Noyes also proposes changes to the regime around betting tax and the Levy system, which returns money to racing from off-course betting.<\/p>\n
Online operators at present pay an additional 10% of their gross profits on racing turnover in Levy, which represents, as Noyes points out, \u201ca de facto horse-racing betting duty of 25%\u201d when combined with the current 15% charge for betting duty. He suggests a change to the ratio of duty to Levy, combined with an extension of the Levy to bets on overseas racing, would improve significantly the proportion of overall betting turnover that is returned to the sport.<\/p>\n
The Labour MP for Halesowen, Alex Ballinger, provided a foreword to the report by the Social Market Foundation. Photograph: PetaPix\/Alamy<\/p>\n
The SMF report notes that Martin Cruddace, the chief executive of the major racecourse group Arena Racing Company, recently proposed an inversion of the rates charged for Levy and betting duty, but suggests that this \u201cdoes not go far enough\u201d to address \u201csystemic underfunding\u201d. It proposes that a reduction to 5% of gross profits for racing bets alone, alongside an increase to 20% for the Levy, \u201cwould ensure fiscal neutrality for the betting industry, while fundamentally reorienting the distribution of revenue in favour of the sport\u201d.<\/p>\n
Johnson was among several representatives of racing\u2019s key stakeholder groups who met Noyes last week to discuss the SMF proposals, and said on Monday that the report is \u201ca sensible and informed piece of work that could be a route for the government to resolve the issues that have beset the sport in recent years and which are affecting our ability to compete with other jurisdictions\u201d.<\/p>\n
He added: \u201cWhilst our immediate priority has been to ensure that the Treasury does not inflict a significant blow on racing via tax harmonisation, we are aware that success here does not resolve the challenges faced by the sport at present, or undo some of the damage inflicted in recent years.<\/p>\n
Quick GuideBHA announce start date for new chairShow<\/p>\n
The British Horseracing Authority said on Monday that Lord Allen of Kensington will take up his new role as chair of the organisation on 1 September, after the Labour peer won his first major battle in the world of racing politics and persuaded the BHA board to back his plans for a fully independent board of directors.\u00a0<\/p>\n
Allen was announced as BHA chair in November 2024 with a start date of 2 June, but his arrival as the head of racing\u2019s ruling body was postponed in May to allow him to \u201ccontinue meeting stakeholders to better inform his vision for the sport\u201d.\u00a0<\/p>\n
The board comprises an independent chair, four independent directors and four member-nominated directors, two from racecourses and two to represent the sport\u2019s participants, including owners, trainers, jockeys and stable staff.\u00a0 <\/p>\n
Allen is believed to have insisted on an end to the member-nominated directors before agreeing to take up his new role, having concluded that the presence of sectional interests at the top of the organisation was a potential barrier to progress and innovation.\u00a0<\/p>\n
Following a meeting of the board on Monday, there was agreement that the BHA would start working towards an independent board of directors, allowing Allen to take up his new role in a few weeks\u2019 time.\u00a0<\/p>\n
\u201cI am delighted we have agreed to a process towards a new independent BHA board,\u201d Allen said in a statement on Monday, \u201cand I look forward to formally starting in September. Horse\u00a0racing\u00a0has a strong future. There is work to do, but I am in no doubt as to the passion and commitment of the many thousands of people who make up our industry.\u201d<\/p>\n
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\u201cThe SMF proposes a tax solution that is mindful of the very different social and economic aspects of different types of gambling, and which seeks to support a sport that means a great deal to the British public.\u201d<\/p>\n
In his foreword to the SMF report, Ballinger, the Labour member for Halesowen, said that \u201cas the Treasury considers changes [to the tax regime around gambling], it is vital that they reflect the real impact of gambling on people\u2019s lives\u201d, and describes its \u201cpractical\u201d proposals as \u201csmart, fair ideas that deserve serious attention\u201d.<\/p>\n
Ballinger said: \u201cThe evidence is clear: some gambling products \u2013 like online slots \u2013 cause far more harm than others\u201d, adding: \u201cThese harms carry huge costs, from personal debt and family breakdown to rising pressure on public services. Our tax system should reflect this.\u201d<\/p>\n
The British Horseracing Authority released research on Monday which suggests that tax harmonisation at a rate of 21% could lead to an industry-wide revenue loss of \u201cat least \u00a3330m in the first five years\u201d and put \u201c2,752 jobs at risk in the first year alone\u201d. The BHA has also launched an online petition<\/a> which calls on the government to \u201crethink\u201d its plans on gambling taxation.<\/p>\n The Betting and Gaming Council (BGC), the main body representing the gambling industry in the UK, said on Monday that arguments for a hike in gaming taxes were \u201cnaive\u201d.<\/p>\n \u201cSome naively argue that tax increases should target gaming while sparing sports betting or carving out horse racing,\u201d a BGC spokesperson said.<\/p>\n \u201cBut the reality is our members don\u2019t ringfence products in that way, these are integrated businesses. Any tax rise, whether on betting or gaming, affects the whole operation. That means less money available for sponsorship, media rights and support for sports like racing, which is especially vulnerable to changes in the customer offer.\u201d<\/p>\n