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Velimir Velichkov November 28, 2023 3 min read
BGC Criticizes Proposal for Gambling Tax Increase
BGC's chief executive, Michael Dugher, called the proposed tax increase "nothing more than a Trojan Horse," explaining it may significantly impact the horse racing industry
Currently, horse racing is the second biggest sport in the UK. More than five million people enjoy some 1,400 horse racing events annually, figures that are a testament to the popularity of the sport. Yet, the horse racing industry is threatened amid changes that propose tax simplification, the single industry body for the UK betting and gaming industry, the Betting and Gaming Council (BGC), warned.
On Monday, the Council issued a new report, analyzing recent tax proposal that may significantly impact the sector. The BGC acknowledged that the UK government released its Autumn Statement recently, where it described a proposal that calls for the replacement of the existing three-tax structure with a single tax on remote betting.
Currently, games of chance such as online casinos pay a 21% tax on profits. On the other hand, sports betting operators are subject to a 15% tax. According to the BGC, any hike in betting tax “would likely lead to lower margins on racing, fewer offers for punters and less funding to sponsor and promote the sport.”
Michael Dugher, BGC’s chief executive, warned about the dangers of implementing further tax increases. He explained that increasing taxes may deal a devastating blow to the horse racing sector. “This is a sport which relies heavily on betting operators for its success and yet the Government appears determined to draft in measures which shrink the industry with huge ramifications for other sectors, like horse racing,” added Dugher.
Calling the proposed tax simplification “nothing more than a Trojan Horse,” he said that this change may serve as a stepping stone for the implementation of more taxes on businesses. Moreover, he said that it is worrying that the Treasury didn’t discuss the proposal with the DCMS, the body responsible for betting and racing in the country.
Proposed Gambling Tax Increase Comes amid Changes to the Sector
Dugher also shared his concern regarding the timing of the planned tax raise. He explained: “Any further new tax rises could be a hammer blow for horse racing’s finances, which are already threatened thanks to measures proposed by the Government in the recent white paper.”
The government published its White Paper on the review of the Gambling Act back in April. The White Paper proposed robust changes to the gambling sector, including the implementation of affordability checks.
The BGC also spoke about the growing costs related to broadcast races that its members pay annually. According to the Council, its five biggest members, Betfred, 888/William Hill, bet365, Flutter and Entain, anticipate record cost increases for broadcast races. As an example, the BGC said that last year, costs associated with rights for live streaming were £270.1 million ($341.3 million). In contrast, this year, such costs increased by nearly 6% to £285.3 million ($360.5 million). Moreover, the Council warned the aforementioned costs are expected to increase by a further 10.5% in 2024.