British Horseracing Authority Chief Executive Brant Dunshea has warned the increase in Machine Games Duty announced in Wednesday's budget will "cause significant damage to racing’s finances".
Chancellor John Healey raised the duty to 25% from 20% as he announced measures to take 70,000 businesses out of paying business rates and said: "To pay for this support for our high streets I'm raising taxes on gambling by increasing machine games duty from 20 per cent to 25 per cent for higher stakes machines whilst protecting pubs and seaside arcades."
Campaigners had pushed for an increase to 40% and while the move falls short of that mark, Dunshea warns racing will still be significantly impacted.
"While the Government has rejected a worst-case scenario to increase Machine Games Duty to 40%, in raising the rate to 25% it will nevertheless cause significant damage to racing’s finances," he said.
"There is now a clear risk that this decision will lead to the closure of hundreds, if not thousands, of betting shops across the country.
"British racing – which derives nearly a third of its £350 million annual income from betting via high street shops – is now set to potentially lose £57m a year, based on the independent modelling that was shared with the Treasury ahead of today’s Budget.
"While the MGD rate increase is not as severe as some called for, this change could still prove devastating for the future of our sport – impacting prize money, the viability of racecourses, thousands of jobs; and vital horse welfare projects and research.
"Betting shop closures will also significantly impact a large part of the sport’s fanbase for whom a visit to their local bookie is the primary way they engage with horseracing.
"As the only sport in receipt of a statutory levy from the betting industry, we will seek to urgently engage with the Government to establish how we can work together to reduce the impacts of this tax policy.
"The BHA will also now analyse the Budget documents in greater detail to establish whether there are any other potential issues that may impact racing."
Grainne Hurst, Chief Executive of the Betting and Gaming Council, said: “This is a deeply damaging decision and a blow to the thousands of workers, businesses and communities who depend on Britain’s regulated betting and gaming industry.
“The Chancellor has ignored repeated warnings about the consequences. At 25 per cent, EY projects almost 9,000 people could lose their jobs and almost 1,000 betting shops and casinos could close or be at serious risk. These are real people and families facing the loss of their income and security, in places where alternative work can be hard to find.
“For Britain’s casinos, the consequences will be significant. These are major employers and important contributors to local economies, yet this decision will force otherwise viable businesses to close and undermine investment before it can be delivered.
“Every betting shop or casino closure means lost livelihoods, more empty premises and another huge blow to our high streets. These venues will not simply be replaced, particularly in places already struggling to attract jobs and investment.
“Higher taxes on the regulated industry also will make the illegal gambling market more attractive to customers, where operators pay no UK tax, contribute nothing to British sport and offer none of the safeguards required of licensed businesses.
“We already contribute £6.8 billion to the British economy, generate more than £4 billion in tax and support 109,000 jobs. Yet the Government has chosen a course that will destroy jobs, close businesses and diminish the industry's contribution to the economy.
“The Chancellor has chosen a tax rise that will cost British jobs, close businesses and hollow out high streets, while handing an advantage to illegal operators. The Government cannot ignore the consequences of this decision.”
