Last month, strikes descended on British racing, with representatives making their way to London to protest planned tax changes. But how much impact has the strike had?
On September 10th, racing in the United Kingdom ground to a halt. The strike was a planned protest against the possible change in betting tax. Stakeholders within the horse racing sector believe this will cripple the industry, leading to job losses and a huge drop in taxable revenue. After the cancellations of meetings at Carlisle, Uttoxeter, Lingfield, and Kempton, with key figures attending London for lobbying, what impact has the strike had?
London’s September Lobbyists
Axe the Racing Tax was held at the Queen Elizabeth II Centre, just a short walk from the Houses of Parliament. It seems quite likely that the tax on betting profits, currently at 15%, may be raised to 21% which puts it in line with products used in online casinos. The British Horseracing Authority has estimated this will cost the industry £65 million annually.
Racing did continue in Ireland, however, with many bettors punting on Irish Racing. This saw people turn to websites like https://www.irishracing.com/ for racing news, racecards, tips and results.
The day began with some of the most prominent figures from the industry in London. Holly Doyle, one of the sport’s most influential female riders, stood alongside five-time champion jockey, Oisin Murphy, in the shadows of parliament for pictures. Top trainer, John Gosden, was amongst the protestors, and he told The Guardian newspaper that “Our costs of production are absolutely frightening. When you compare it to the cost of production of online gambling on casino products, I think you’re looking at two completely different ball games. I don’t think the government understands our industry.”
It was not just figures from racing at the event either. It was estimated that around 20 MPs had accepted invitations and were in attendance. Martin Cruddace, the chief executive of Arena Racing Company, was also due to speak to the parliamentary group for gambling reform later in the week.
Ministers Urge Government to Raise Gambling Taxes
Since the strike, the end of September saw more than 100 MPs from the Labour government write to the Chancellor. This letter called for an increase in the rate of gambling taxation, believing it could help combat child poverty.
Written by MPs Alex Ballinger and Beccy Cooper of the All-Party Parliamentary Group for Gambling Reform, it has been suggested that the funds raised can help scrap the two-child benefit cap. However, this was specifically aimed at a “targeted levy on harmful online gambling products.”
The changes were suggested by the Institute for Public Policy Research, based in SW1, and were backed up with approval from former Prime Minister Gordon Brown. This will see remote gambling duty move from 21% to 50%, with duty on slot machines increasing from 20% to 50%. Crucially for the betting industry, it would mean 15% to 30% rise in sports betting, online or in shops, though this would exclude horse racing.
While this seems good for the racing sector, it will have an impact on betting shops. William Hill was the first company to come out and say it would damage their business, and noted that it would have to close up to 200 betting shops. Its parent company, Evoke, has been creating plans for differing outcomes. Closures would mean a shutdown of between 9% and 15% of its chain, according to reports by the Sunday Times. It is believed 1,500 jobs could be impacted.
This was echoed by Entain, who own the Ladbrokes and Coral brands. Stella David became the CEO in April, and the tax hike is one of the first major tests she may face. She noted that this increase would mean Entain has to “consider its investment level in the UK” and may mean closures of physical stores. It owns 2,300 shops across the UK.
So far, it is unknown if these planned taxes will go ahead. A similar scheme in the Netherlands, which increased gambling duty, actually resulted in less taxable revenue. Duty was raised from 30.5% to 34.2% and has resulted in a €40 million fall. Many companies and punters may not know until the budget in November.
Companies will inevitably want to avoid any sort of higher taxation, and they may not be able to get rid of it fully. However, this lobbying may have made the government consider a lower rate, and even exclusion for certain types of gambling.
