U.K. Chancellor Rachel Reeves is expected to shield the horse racing industry from a wider gambling tax increase as part of the upcoming November Budget, according to government sources. The Treasury is reportedly preparing a £1-billion tax package focused on slot machines in betting shops and online gaming, while leaving levies on horse racing bets unchanged.
Key Takeaways
- The Treasury plans to raise around £1 billion by increasing Machine Games Duty and Remote Gaming Duty rates.
- Horse racing will be exempt from the new taxes, though the industry fears indirect consequences.
- Treasury officials argue the tax rise is politically viable amid a 60% growth in online gambling over the past decade.
Horse racing will retain its current tax structure, with in-person bets at racetracks remaining largely untaxed. On the other hand, the taxes on gaming machines and online gambling are likely to go up a lot. Industry experts think that the Remote Gaming Duty could go up to as much as 40%.
The current rates are 20% for Machine Games Duty and 21% for Remote Gaming Duty.
The planned increases have drawn criticism from betting firms and racing advocates who argue that the move will ultimately damage the sport's finances. Treasury insiders maintain the changes are aimed at online casinos and machine betting, not at traditional racing.
Protests earlier this year by jockeys and trainers highlighted concerns over the sport's economic sustainability. Jockey Kieran Shoemark warned that additional financial pressures could make horse racing "impossible to survive."
Meanwhile, some former industry figures, including ex-Paddy Power co-founder Stewart Kenny, have supported higher taxes on sectors deemed most harmful, such as online gaming.
The Treasury views the proposal as both fiscally necessary and politically defensible, with internal analysis showing rapid growth in digital betting since 2015.
Labour MPs urge gambling tax hike to fund child benefit reforms
The proposed gambling tax changes come as Chancellor Rachel Reeves faces growing pressure from Labour MPs to go further. Nearly one in four Labour MPs (101 so far) have signed a petition urging the government to raise gambling taxes by up to £3 billion and use the funds to end the two-child benefit cap.
The campaign, supported by former prime minister Gordon Brown, argues that removing the cap could lift half a million children out of poverty. However, Reeves faces a £20 billion shortfall in meeting fiscal rules, making such a policy costly. The Institute for Public Policy Research estimates the change would cost £3.5 billion annually.
The Betting and Gaming Council has warned that steep tax rises could harm the regulated market, pushing players toward unlicensed gambling platforms. CEO Grainne Hurst said that excessive taxation risks driving customers "towards the unsafe, unregulated black market."
The government is simultaneously consulting on merging different gambling duties by 2027 to modernize tax structures. Instead, think tanks like the Social Media Foundation have called for selective increases, saying that online slots should have higher taxes while traditional industries like horse racing should be protected.
Gordon Brown and other high-ranking members of the Labour Party still support plans for a 50% tax on online gambling, saying it would be a socially responsible way to raise money to fight child poverty and change welfare policy.
