The rumour mill surrounding the UK government’s planned increase of gambling tax continues to turn… with new reports suggesting that bookmakers will be spared from the raid.
According to The Telegraph, the chancellor won’t raise the amount of tax paid by operators on their sports betting activities – providing a huge sigh of relief to anyone with an interest in horse racing in particular.
However, it’s not all good news for betting firms. The same report suggests that Rachel Reeves will hike the tax paid by providers of remote games, like slots and roulette, and on the land-based sector.
It’s a move that could yet see the worse-case fears of mass shop closures play out, as online casino gaming provides a key source of revenue for many bookmakers.
Stealth Raid
Critics have already labelled the chancellor’s plan as a ‘stealth tax’ on UK sport and horse racing.
Most bookmakers offer online casino games to their players; a significant source of their income. For context, one leading firm made £715 million from its gaming division in 2023, which accounted for 21% of its entire revenue.
And so, by sharply increasing the tax paid by bookmakers on gaming to approximately 20-25% of their profits, the government will still be indirectly taxing the sports that they were said to be hoping to protect.
With the tax paid on revenues generated from Fixed Odds Betting Terminals (FOBTs) also set to rise in Reeves’ budget later this month, the threat of betting shop closures – as has been warned by numerous industry stakeholders in recent times – remains a huge concern.
Representatives of both Entain and Evoke, the parent company of William Hill, have warned that shop closures will be an inevitability of tax hikes, while Betfred chief Fred Done went one step further by claiming that he could be forced to close all of his 1,287 high street shops – around 20% of the UK gambling industry’s entire retail empire.
While few will have sympathy for Done personally – he and brother Peter were named in the Sunday Times Rich List once again in 2025 with a combined fortune of £2.9 billion, the likelihood of thousands of employees being made redundant, in an era in which retail jobs are becoming ever more scarce, should be a huge concern to the Treasury.
Meanwhile, a spokesperson for Flutter confirmed that increasing tax on remote gaming will still have ramifications for all areas of their business.
“Any increase in business tax, on gambling or any other activity, is not a free hit and will have obvious consequences on jobs and investment,” they commented.
Unconscious Coupling
Initially, the chancellor wanted to ‘harmonise’ gambling tax into a single structure, which would have seen all bet types and operators taxed the same.
That idea went down particularly poorly with horse racing stakeholders, who rely so heavily on bookmakers paying into the levy fund, as well as lump sum payments for sponsoring individual races and entire meetings.
The #AxeTheRacingTax campaign was born, with the sport effectively going on strike by cancelling all races back on September 10.
That idea to harmonise taxes, it seems, has been kicked to the kerb, with the Treasury now focusing on a separation of sports betting and online games of chance, which research suggests can proliferate problem gambling and addictive behaviour.
However, a cut in profit margin will likely see betting firms tighten their belts, delivering weaker odds and fewer promotions for punters, while also cutting their marketing spend in sponsoring races.
Bookmakers pay a percentage of their profits into the betting levy, which is used to help fund racing’s prize money and logistical upkeep. But if operators are earning less due to a more severe taxation regime, their contributions to the levy will fall accordingly.
According to industry sources, betting shops pay around £100 million a year into horse racing to acquire the media rights to show meetings on their big screens. So, with individual shops or entire chains shutting their doors, the amount being paid into racing will, once again, be diminished.
More than 85,000 people are employed either directly or indirectly within horse racing in the UK, with 20,000 of those working at racecourses.
So even if horse racing avoids a tax hike directly in the Autumn Budget, it’s still likely that the sport – and its employees – will suffer as an unwanted outcome of taxing online casino games through the nose.
And as Rob Wood, the CFO of Entain, points out:
“When a shop closes, it is not just the staff who lose. The Treasury loses tax. The high street loses footfall. Racing loses funding.”