Treasury sources say the Chancellor is now odds-on to ditch plans to ramp up gambling levy amid fears it could send sport of kings to knacker’s yard
The Daily Star’s campaign to save horse racing from a betting tax hike hell is leading the charge to the winning post, Treasury sources say.
Rachel Reeves is now odds-on to leave the levy on the sport of kings untouched at 15% in next week’s Budget. Racing chiefs were so worried she planned to whack it up to 21% – the same rate as online gambling – the sport went on strike for the first time in history leading to top jockeys Hollie Doyle, Tom Marquand and Oisin Murphy marching alongside us on Westminster.
Industry experts warned the move could cost 40,000 jobs and risked consigning the 500-year-old sport to the knacker’s yard. Bookies would slash the odds they offered on horses in a bid to recoup the extra cash they faced coughing up to the Treasury on each bet placed.
That meant every punter who backed a winner would not pocket as much money for their skill. Ever y race would be hit including the Grand National on which 15m – a third of Britain’s adult population – have a flutter every year.
Not only would it hammer owners, trainers, jockeys, stablehands, courses and bookmakers but also every linked industry from beauticians spray-tanning Ladies’ Day race-goers to cabbies ferrying revellers to the track.
According to the Betting and Gaming Council fans would turn to non-taxpaying black market bookies – putting themselves at risk of gambling addiction and slashing not only future investment in the sport but the Government’s income from racing.
The Daily Star took up the reins against the planned hike on behalf of legions of readers who feared the Chancellor was about to wreck their fun flutters.
Now – as we enter the final furlong ahead of Reeves’ much-feared spending review – it appears victory may be in sight.
According to the Financial Times three people ‘familiar with the situation’ said Reeves now plans to maintain the current 15% tax rate for bets on sports such as football, boxing, tennis, darts and golf when they are placed in bricks-and-mortar bookmakers.
Online sports betting is set to face a ‘slight’ increase in tax. The only exception to this will be horse racing – which Reeves plans to leave alone.
The top City newspaper declared: “Betting on horse racing, both online and in-person, is set to get a complete reprieve.”
Instead the Chancellor plans to raise taxes on fixed-odds betting terminals and online games. Machine betting has been called ‘addictive’ and ‘higher-risk’ by anti-gambling campaigners who have called for the tax rate on it to be ramped up to 50%.
Former Prime Minister Gordon Brown had urged Reeves to put up levies on all forms of sports betting and horse racing to raise £3.2bn and fund the scrapping of the two-child benefit cap.
In September the Chancellor said she believed there was ‘a case for gambling firms paying more’.
The threat led to Betfred – owned by Britain’s second-biggest taxpayers the Done family – warning it would shut all its 1,300 shops if Reeves pressed ahead.
Grainne Hurst, chief executive of the Betting and Gaming Council, told us the move would push racing fans into the ‘Wild West’ world of black market bookies run by criminals who pay no tax at all and have no safeguards in place to stop folk blowing their mortgages.
She said 1.5m Brits already gamble £4.3bn-a-year in the illicit sector where there are no rules to stop folk running up vast debts, gambling with credit cards or loan cash or developing chronic addictions.
Forcing legitimate bookies to offer less attractive odds was likely to drive more people to illegal operators and risked plunging Britain into a debt, addiction and homelessness hell.
Grainne said she was ‘hopeful’ Reeves would see that ‘any tax rise would be a hammer blow to customers’ and an ‘act of vandalism on sectors that are providing the growth and investment and the jobs which the UK so desperately needs right now’.
A source from one leading bookmaker said: “It looks odds-on the Chancellor has had a re-think – and thank heavens for that. But no race is ever run until we reach the winning post.
“The Budget is all a bit Bob Dylan with everything blowing in the wind. Let’s hope we don’t fall at the last.”
The Treasury declined to comment in detail but said: “Horse racing is part of the cultural fabric of the country. That’s why it’s the only sector that benefits from a government-mandated levy while betting at the races gets a 100% tax break which we have no plans to change.”
The Daily Star says…
Ever since a hike in horse racing betting tax was suggested we said it would be a terrible idea. Experts from the industry spelled out just how badly it would impact not just ordinary punters, but a raft of other trades linked to the sport as well.
As well as that, the move would likely push gamblers to use illegal bookies in order to get value for money on their bets.
Now after plenty of pressure – backed by your Daily Star – it looks like Rachel Reeves has ditched these plans.
Sources close to the Chancellor reckon she will now spare horse racing from the dreaded tax increases.
It will be interesting to see what actually ends up in Reeves’ chaotic Budget.
Most of the plans so far have been leaked, slammed and then ditched by the panicky Chancellor.
But whatever next week’s statement brings, if the horse racing betting tax rise is gone then it can only be an improvement!