Racing celebrates ‘Axe the Tax’ Budget campaign victory after Reeves spares sport

Lord Charles Allen, the chair of the British Horseracing Authority, paid tribute on Wednesday to “everyone who has played their part across the sport” following the budget announcement by the chancellor, Rachel Reeves, that the rate of duty for betting on horse racing will remain unchanged at 15%.

Confirmation that racing would be exempt from tax hikes on online casino gaming as well as betting on football and other sports follows a seven-month campaign under the slogan “Axe The Racing Tax”, which initially launched in response to a Treasury proposal to “harmonise” the duty paid on both betting and gaming at a single rate.

Instead, the chancellor opted for a new regime on gambling duty with a focus on online games of chance, which are associated with significantly higher rates of gambling-related harm than single-event betting. Remote Gaming Duty (RGD), the tax paid on profits from online slots and casino games, will effectively double, from 21% to 40%, and while the tax rate for online betting on sports other than racing will rise from 15% to 25%, there is no change to the rate on either machine gaming or sports betting in high-street shops.

“I would like to commend the chancellor and the government for listening to the concerns of British racing and offering their clear support for our sport,” Lord Allen said on Wednesday, “[and] thank everyone who has played their part across the sport, standing as one to communicate our message.

“The government has rightly recognised that we are not only a vital part of the fabric of the British way of life, but we are also a global leader and one of the country’s most important soft power levers. We want to maintain Britain’s place on the world stage.”

Martin Cruddace, the chief executive of Arena Racing Company (Arc) and a key figure in the “Axe The Racing Tax” campaign, said the sport had “been clear throughout that harmonisation of tax rates of British racing and other betting and gaming products would gravely impact our industry.”

Cruddace added: “As a sport and industry, we continue to offer a real contribution to this country, supporting communities and culture. I am so glad that the government has recognised that fact and helped put our sport on a path to growth.”

The new gambling duty regime is closely aligned to proposals put forward by the Social Market Foundation (SMF) think tank in July, and also follows an intervention in the debate in August by the former prime minister, Gordon Brown, calling for a significant rise in online gaming duty.

Rachel Reeves announced in Wednesday’s budget that the rate of duty for betting on horse racing will remain unchanged at 15%. Photograph: House of Commons

“This decision mirrors the proposals made in our recent SMF report on gambling tax,” Dr James Noyes, one of the authors of the report, said. “We are pleased that the government has decided to differentiate between different types of gambling product – increasing the duty on more harmful remote casino content while protecting horseracing from the planned rise in betting duty.

“For too long, the online gambling industry has been undertaxed. This decision by the chancellor will ensure that operators pay their fair share and brings the UK into line with international best practice.”

Gambling operators’ profits on racing bets are subject to an additional 10% deduction to fund the Levy, and the decision to increase the rate of duty on non-racing bets, effectively aligning these with racing bets at a total deduction of 25%, will be expected to increase the sport’s attractiveness as a product for online operators.

The budget statement also allocated an additional £26m for the Gambling Commission to combat a possible increase in unlicensed gambling, which has been repeatedly raised by the Betting and Gaming Council, the industry’s main lobbying group, as a potential result of tax rises.

“We want to collaborate with our betting operator partners to grow the sport,” Brant Dunshea, the BHA’s acting chief executive, said, “and I’m absolutely convinced that betting operators and racing have a shared interest in doing that and are committed to doing so.

“Our sport is often criticised for being fragmented and not joined up. I think [the success of the campaign] is a very good example of how when the sport comes together with a shared purpose and a shared goal, we are an incredibly powerful voice to government.”