British Racing Strike Sparks Controversy Over Tax Reforms

The British racing industry has announced a strike scheduled for September 10, 2023, igniting significant debate over proposed tax reforms affecting online betting and casino products. This unexpected move has garnered extensive media attention, potentially outweighing the financial losses expected from cancelling lower-profile meetings at venues such as Kempton, Lingfield, Carlisle, and Uttoxeter.

As racing stakeholders prepare for the strike, many punters are already focused on the upcoming St Leger meeting at Doncaster, which could divert attention during the strike day. The British Horseracing Authority (BHA) has expressed serious concerns regarding government plans to “harmonise” duty rates, which could cost the sport between £66 million and £160 million annually, according to commissioned modelling.

Industry Reactions and Concerns

The decision to strike has prompted varied responses within the industry. The Betting and Gaming Council (BGC) criticized the BHA’s choice to reschedule races without consulting betting operators, emphasizing that their support is crucial for the sport’s funding. In a statement, the BGC mentioned, “Racing’s decision to reschedule fixtures was taken without consultation with betting operators, whose support for the funding of the sport is mission critical.”

Michael Dugher, chair of the BGC, further warned that any increase in costs would not only impact the sport’s funding but also diminish the experience for punters. He stated, “any increase in costs gets passed on not just to the sport, through reduced spend on sponsorship, but also punters. That might mean worse odds, fewer offers, less generous promotions.”

Dugher also challenged the notion that betting is solely a game of skill, stating, “the idea that betting on horseracing is purely a game of ‘skill’ and not also a game of ‘chance’ is nonsense.” His remarks highlight the complexities and nuances of betting, suggesting that factors beyond skill often influence punters’ choices.

Future Implications for Racing and Betting

The BGC’s response reflects a shifting landscape in which traditional betting companies are increasingly viewed as subsidiaries of larger global operators, focused on maximizing profits from fixed-margin gaming. The BGC advocates for maintaining the current duty rates of 15% for betting and 21% for gaming. However, with the UK Treasury actively seeking increased revenues, particularly from gambling, a change in these rates appears likely.

As discussions continue heading into the autumn budgets, potential scenarios for the racing industry contrast sharply with those of the gambling sector. For racing, any form of duty harmonisation is seen as detrimental, not only leading to a loss of revenue but also incentivizing operators to focus more on gaming over racing.

Conversely, the best-case scenario for the gambling industry would involve harmonisation at either 21% or 25%, which they would perceive as a relief given the looming threat of higher gaming duties—possibly exceeding 40%—that they face in other markets.

While some industry leaders, like Dugher, dismiss the strike as a mere “futile political gesture,” its potential to influence ongoing discussions about tax reform is significant. The strike serves as a reminder of the critical interplay between racing and betting, and it underscores a growing urgency as both sides negotiate their futures amid changing regulations.

As the date approaches, the impact of this strike and the government’s response will likely shape the landscape of British racing and betting for years to come.