Online Casinos Must Pay Higher Taxes, Say Horse Racing Leaders
Senior leaders within the horse racing sector have expressed significant concerns regarding proposals to increase tax rates for horse racing betting to align with the higher rates imposed on UK online casinos. This discussion unfolded during a recent gathering hosted by the Social Market Foundation (SMF), where key stakeholders, including racecourse directors, Treasury officials, Members of Parliament, and representatives from the British Horseracing Authority, convened to deliberate on the future of gambling taxation.
Historically, horse racing leaders have collaborated with various gambling entities through the Betting and Gaming Council (BGC) to advocate for the broader interests of the sector. Currently, horse racing betting is subjected to a tax rate of 15%, while online casinos are taxed at a more substantial 21%.
Disparity in Taxation: A Threat to Horse Racing
In the aftermath of the meeting, Martin Cruddace, CEO of Arena Racing Company—which operates renowned courses such as Doncaster and Chepstow—stated, “It is crucial for British horse racing to underscore that betting on its sport is subject to distinct taxation and regulatory standards, setting it apart from online casino and arcade games, as well as other sports.”
Cruddace further highlighted the potential ramifications of tax harmonization, noting, “Aligning tax rates between online casinos and horse racing betting could inadvertently position Britain as a global leader in online casinos while rendering our esteemed sport of horse racing relatively impoverished on the world stage.”
The current trajectory indicates a troubling decline in tax contributions from horse racing, which fell to approximately £100 million, down from a peak of £115 million. In contrast, online casinos affirmed their robust growth, generating an impressive £4 billion in revenue in 2024 alone, with slots and casino games contributing to about 75% of the UK’s overall gambling industry revenue.
The regulatory landscape is shifting, as evidenced by the recent restrictions imposed by the UK Gambling Commission on machine gaming within land-based casinos, potentially incentivizing a shift towards online gaming platforms.
A representative from the horse racing sector articulated a concern, stating, “The operational overhead associated with online casinos is minimal, with their direct contributions to the British economy being virtually nonexistent. The potential for widespread harm from such platforms is, frankly, staggering.”
BGC’s Stance on Industry Cohesion
The Betting and Gaming Council has sought to mitigate concerns regarding any perceived divide among its member organizations, reaffirming support for the sentiments of horse racing leaders. A spokesperson articulated, “BGC members collectively contribute £6.8 billion to the economy, generate £4 billion in tax revenue, and support 109,000 jobs. However, pursuing an erroneous approach regarding taxation could foster a cycle of decline.”
Generally, the BGC opposes any tax increases that could adversely affect revenue streams. Nevertheless, a prevailing trend shows that online casinos are taxed at higher rates than sports betting. Historical data from various US states reveals similar patterns, with states such as Pennsylvania imposing tax rates of 54% on slots compared to 34% on sports betting. Notably, Michigan and West Virginia also employ higher rates for casino gaming, while Spain adopts a uniform 20% tax rate across all gambling types.
