ROB Wood, Chief Financial Officer and Deputy CEO, Entain plc, operator of Ladbrokes and Coral explains the threat to horse racing posed by Rachel Reeves’ proposed betting tax hike.
From the magic of the Grand National to the Cheltenham “roar”, horseracing is one of Britain’s greatest sports. It’s a brilliant day out for millions every year and part of our national identity.
But that proud tradition is now at risk as the Chancellor prepares to open her Budget box on November 26 with an eye-watering tax raid on the betting industry.
The Government has hinted that it wants to protect racing from the tax hikes. The reality is the betting industry funds racing – and is happy to do so. But you can’t take such vast amounts of money out of betting and pretend racing will not feel the pain.
You don’t protect the horse by wrecking the stable.
Racing is not just about big hats and big wins. It is a major industry, the second most watched sport in the country, supporting 85,000 jobs across the country, including 20,000 people working at racecourses.
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Every race meeting brings life to towns,pubs, hotels and high streets.
Even if some politicians are loathed to admit it, betting helps make all of that possible. Each year, companies like Entain, which operates the Ladbrokes and Coral brands, put millions into racing through sponsorships, media rights and the levy.
Across the industry this adds up to over £350 million a year invested in the sport, a figure that will be unsustainable in the face of a huge tax hike on the betting and gaming sector.
At Entain we paid more than £500 million in UK taxes last year, making us a top 20 taxpayer. Two-thirds of every pound we earn already goes to the Treasury. We are proud of that. But there is a limit. Raise taxes too far and the whole system starts to break.
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Take betting shops. Costs keep rising through wages, energy and National Insurance. Sadly, we have already seen around 30 per cent of shops close in the last six years.
Of the 6,000 that are left, many are hanging by a thread. Another tax hike will tip hundreds, if not thousands, into closure.
And when a shop closes, it is not just the staff who lose. The Treasury loses tax. The high street loses footfall. Racing loses funding.
Online, an even more sinister danger looms. Push taxes too high, odds are squeezed, promotions are cut, and punters, sometimes unwittingly, turn to the black market, using illegal websites that pay no UK tax and offer no player protection.
We have already seen the risk grow, with the UK black market share rising from two to nine per cent in three years.
Look at the Netherlands. They raised their gambling tax to 35 per cent and now half their market is illegal. Tax revenue fell, protections for customers vanished and everyone lost except the criminals.
It is not too late to avoid the same mistake here with another losing bet. Leave high street shops out of any tax rise. Keep online rates fair so legal firms stay competitive and safe.
And go after the black market with proper enforcement.
Britain’s betting industry already pays its way, creating thousands of jobs and funding the sports we love. We want to keep doing that.
But if the Chancellor overplays her hand, she will hurt the very sports Britain treasures.
The industry not only funds racing but is a huge contributor to greyhound racing, darts, snooker, rugby and others.
For all these sports, there will inevitably be less money to go around if tax rises happen. And it makes no difference if tax rises are on sport or gaming, the negative consequences for British sports, jobs and tax revenues are all the same.
Horseracing has always been part of our national story. Let’s make sure it has a future.
