The government gambling tax proposal put forward by UK Chancellor Rachel Reeves could cause major funding losses in horse racing.
Reeves has put forward that the General Betting Duty will rise from 15% to 30% in the Autumn budget later this month, a move which could have consequences for those involved in the industry.
The increase in machine games duty (MGD) looks set to rise from its current rate of 20% to 50% and this could put up to 25,000 people out of work, according to a press release seen by ReadWrite.
In Britain, there are currently 5,800 betting shops featuring over 40,000 employees. These shops contribute nearly £140 million ($184 million) to horse racing, while the industry pays £1 billion ($1.3 billion) in tax.
Despite the Institute for Public Policy Research calling for Reeves to raise the MGD to 50% to raise over £3 billion ($3.9 billion) a year, the knock-on effects would heavily affect horse racing.
A total of £84 million ($110 million) would be lost in funding from both betting shops and media rights payments if the MGD tax rises to 50%.
Even increases of 30% or 40% would still see thousands of job losses alongside losing either £48 million or £70 million in funding, respectively.
BGC Chief Executive has her say on the proposed measures
Grainne Hurst said: “Any increase in betting and gaming taxes on any part of the industry would hammer ordinary punters while threatening British jobs, high streets and the future of horseracing.
“The figures for machine games duty speak for themselves – thousands of shop closures, tens of thousands of job losses, and an £84m hit to horseracing. This isn’t a small tweak to the tax system – it’s an act of economic vandalism against communities, workers and Britain’s second most popular spectator sport.”
A higher tax rate in the gambling industry could also see a rise in the use of black market websites in the future.
In 2021, only 3.3% of all online betting and gaming took place via unsolicited black market websites.
This has risen to 5% and if Reeves’ proposed tax hikes come to fruition, that figure will continue to rise.
Featured image: Canva
The post UK government gambling tax proposal could ‘wipe $110M from racing income’ appeared first on ReadWrite.