As the UK government considers a controversial move to “harmonise” gambling taxes across all products, a bold alternative plan has gained strong support from British horse racing stakeholders. On Monday, Paul Johnson, chief executive of the National Trainers’ Federation (NTF), announced the group’s full backing of a new report by the Social Market Foundation (SMF) that proposes a differentiated approach to gambling taxation.
The SMF report — The Duty to Differentiate — authored by Dr. James Noyes, argues that the government should raise tax rates on high-risk online casino products, like slots and roulette, while maintaining more favorable terms for sports betting, especially horse racing.
“The SMF proposes a tax solution that is mindful of the very different social and economic aspects of different types of gambling,” said Johnson, calling the proposal “a sensible and informed piece of work.”
A Push to Protect Horse Racing
Currently, online casino gaming is taxed at 21% of gross profits, the same as sports betting. But Noyes argues this flat rate fails to reflect the disparate harms caused by different gambling products. He points to European countries taxing remote casinos at 40% or more, and US states where the rate exceeds 50%, to make the case for increasing the UK’s rate on online gaming up to 50%.
Meanwhile, the SMF suggests rebalancing the relationship between betting tax and the racing Levy — a key funding source for the sport. Online bookmakers currently pay:
- 15% general betting duty
- 10% Levy on horse racing profits
→ totaling a 25% effective tax rate on racing bets.
Noyes proposes reducing betting duty on horse racing to 5%, while raising the Levy to 20%, ensuring revenue neutrality for operators but directing more funds to the racing industry. He also calls for expanding the Levy to include overseas racing bets — a change that could significantly boost racing’s income.
Why It Matters Now
The Treasury’s plan to harmonise taxes at 21% across all gambling products has sparked alarm across the racing world. A study released by the British Horseracing Authority (BHA) claims the plan could cost the industry £330 million in revenue over five years and put 2,752 jobs at risk in year one alone.
To oppose the Treasury’s move, the BHA has launched an online petition urging the government to rethink its plans.
In his foreword to the SMF report, Alex Ballinger MP emphasized the importance of targeting tax policy to reflect gambling harm. He wrote:
“The evidence is clear: some gambling products – like online slots – cause far more harm than others. These harms carry huge costs… Our tax system should reflect this.”
Betting Industry Pushback
Not surprisingly, the Betting and Gaming Council (BGC), which represents gambling firms in the UK, criticized the proposed reforms.
“Some naively argue that tax increases should target gaming while sparing sports betting,” a BGC spokesperson said. “But these are integrated businesses… any tax rise affects the whole operation.”
They warned that increased taxes could reduce money available for sponsorships, media rights, and grassroots sport, including racing.
Still, Johnson and other racing figures believe restructuring the gambling tax system is essential to keep the sport competitive. With government decisions looming and racing’s finances under pressure, the debate over how — and where — to tax the gambling industry is heating up.