Budget may deliver result desired from racing’s ‘Axe the Tax’ campaign

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After many months of campaigning, an unprecedented “strike” when racing relocated to London to make its voice heard and an intervention by a former prime minister, no less, the UK’s second-biggest spectator sport will soon discover whether its concerted, and impressively united, effort to avert a tax hike on racing bets, has paid off.With all due respect to the competitors at Wetherby, Market Rasen and Southwell on Wednesday, the main event for racing will be the 12.30 at Westminster, as Rachel Reeves rises to deliver her much-anticipated budget speech.The only result that can be ruled out with confidence is that gambling duties will be left untouched.There is a gaping black hole to be filled in the public finances and the UK’s gambling industry, which had a Gross Gambling Yield (total stakes minus total payouts) of £15.

6bn in the 2023-24 financial year, could scarcely be a more tempting target,The key point for racing, though, is the extent to which a hike in overall gambling taxes is shared out between General Betting Duty (GBD) on operators’ gross profits from betting – on racing and other sports and events – and the duties payable on fixed-margin gaming products – slot machines, roulette and other casino games – both online and in retail betting shops,The current rate of GBD is 15% of an operators’ gross profits, while Remote Gaming Duty (RGD), the tax on the booming online gaming sector, is 21% of gross profits,And when the chancellor finally delivers her decision, the success, or otherwise, of the sport’s “Axe The Racing Tax” campaign will largely be measured by whether that 6% gap has been maintained, reduced or increased,The campaign had its origins, after all, in a Treasury proposal to “harmonise” the two rates, which was the subject of an official consultation process earlier this year.

The British Horseracing Authority commissioned research which suggested that harmonisation at 21% would have an immediate cost to the sport of £66m in lost income per annum, and £330m over five years, at the cost of nearly 3,000 jobs in the first year alone.The focus of the anti-harmonisation campaign was on the sport’s economic significance, in rural areas above all, and the likely effect of removing tens of millions of pounds from an ecosystem which supports the jobs of 85,000 people – who are, in turn, paying tax on their income and spending in their local communities.Lingfield 11.00 Canyouhearthedrums 11.30 Master Of Shanghai 12.

00 Al Rufaa 12,30 Connie Moon 1,00 Lahina Bay 1,35 Knickerbocker 2,10 Ten Club 2.

45 Roman Spring 3.20 Arthur Rose Hereford 12.15 Marsiac 12.50 Liam Mera Kai 1.25 Sanitiser 2.

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00 Smasher 7,30 Woodhay Whisper 8,00 Leading Times 8,30 Percy JonInitially at least, it was mainly left to others to suggest that high-frequency gaming products, which are associated with significantly higher rates of harm than other forms of gambling and do little or nothing to support employment or local economies, would be a better target for a tax hike – although Paul Johnson, the chief executive of the National Trainers’ Federation, put his head above the parapet to give the organisation’s “full backing” to a call by the Social Market Foundation (SMF) think tank for RGD to rise to as much as 50%,The moment when the tide may prove to have turned in racing’s favour, however, was the intervention by Gordon Brown, the former prime minister, in July.

Brown backed a call by the Institute for Public Policy Research (IPPR) think tank for gaming taxes to be hiked to 50% and betting duty to 25%, but also recommended additional measures to protect the racing industry from damage in the fallout,Brown’s intervention switched the focus away from harmonisation and firmly towards gaming duty above all, and a recent, well-sourced report in the Financial Times suggests that, far from harmonising the duty rates, the chancellor will instead raise gaming duty on both online and high-street games and impose a “slight” rise on the rate for online sports betting only, but exempt bets on horse racing from the increase,From racing’s point of view, this would be the best outcome that anyone could have realistically expected when the campaign began back in April,And while nothing is being taken for granted, there is increasing hope among those at the forefront of the campaign that its message has landed,One senior executive suggested to me last week that the racing is “about 1-4 to get the right result” on Wednesday.

If so, then the last six months should also come to be seen as the time when a 20-year boom for the UK gambling industry, fuelled almost entirely by gaming products, finally ran out of road.The bonanza was enabled by the 2005 Gambling Act, which came into force in 2007 when Brown himself was in No 10.It legitimised £100-a-spin roulette machines in high-street betting shops, while also failing to anticipate the growing dominance of online gambling in general, and online gaming and casino products above all.It took 15 years of campaigning – amid fierce resistance from the gambling industry – before the stake limit on FOBTs was cut from £100 to £2.There has been similar resistance, orchestrated by the industry’s lobbying group, the Betting and Gaming Council (BGC), to suggestions that gaming duty should be singled out for a significant hike in the budget, even down to a re-emergence of BetFred’s claim, last heard during the FOBT campaign, that most or all of its betting shops are at risk of closure.

It did not happen then, and recent results from William Hill, showing significant recent growth in the betting-shop sector, strongly suggest that it will not happen now.The BGC has repeatedly claimed too that a hit to gaming profitability would have knock-on effects for racing, via reductions in sponsorship and offers and promotions for punters.But in reality, it makes little sense to react to reduced profits in one area of their business by reducing investment in another where the relative margin has improved (unless, of course, racing and betting was mainly being used as a loss leader to acquire customers who can then be pushed towards gaming products).It was suggested in this column over three years ago that the gambling-industry’s gaming-fuelled bonanza could not go on forever, and that the most sensible plan for racing would be to separate itself as fully as possible from the gaming sector ahead of the inevitable crash.If the latest rumour about the outcome of the chancellor’s deliberations around gambling tax is correct, racing may indeed have jumped from the careering bandwagon in just the nick of time.

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