糖心传媒

Budget Reflections

On 28 October, Chancellor John Healey delivered a Budget designed to give 鈥渂reathing space to families and businesses鈥�.

For racing, the change of Chancellor from Rachel Reeves brought a familiar challenge.

Another Budget, another battle to prevent gambling tax rises from damaging the sport鈥檚 finances.

The Social Market Foundation (SMF) report published over the summer proposed raising Machine Games Duty (MGD) to 40%. It signalled that the seemingly ever popular lever of reaching for perceived sin activities like gambling to raise revenue was on the table again.

Racing needed a different approach from last year鈥檚 Axe The Racing Tax campaign.

In 2025, the Government proposed harmonising remote betting duties, bringing bets on horseracing into line with products such as online slots. We could therefore focus on making the case for horseracing as a distinct betting product: a clearer argument and an easier message to communicate.

This time, the mooted tax increase was just on one type of product: machine games, many of which are to be found in betting shops. The presence of a less socially accepted, higher-risk product in the argument made speaking to moderate MPs more of a challenge and meant our campaigning was conducted more in the background than in public 鈥� even taking into account the fact that a tax hike on betting shops would have an unintended knock-on impact for racing.

That said, we did plenty of public lobbying too, achieving a significant amount of newsprint column inches in Fleet Street as well as racing media and valuable airtime across the main channels.
Independent modelling from Regulus Partners made the potential damage from betting shop closures clear. Even at an MGD rate of 25%, racing still faces losses of up to 拢57m a year in three years鈥� time. Faced with that assessment, we had to intervene.

Fortunately, racing鈥檚 collective efforts – including an industry letter-writing campaign and behind-the-scenes meetings with officials and policymakers – helped prevent the worst-case outcome of a 40% rate.
A win of sorts given how bad things could have been, but not one with much cause for celebration. An impact will be felt, and Betfred’s decision to pull out of sponsoring the Classics is early evidence of that. But at least fewer racing fans will lose their local betting shop.

According to the Office for Budget Responsibility (OBR), the measure announced by HM Treasury will raise only 拢0.1bn a year. In HMT language that is a rounding error and unlikely to play a significant part in the Government鈥檚 ambition to rejuvenate the country鈥檚 high streets. Even this author, who only secured a fairly underwhelming grade in A-level economics, can recognise that setting the tax rate for a machine in a shop at the same rate as online makes little economic sense given the associated expenditure of running a bricks-and-mortar business.

I am sure most 鈥� if not all 鈥� people in racing, after two separate years on the campaign trail, very much hope there will not be a need for a post-Budget edition of this blog next year reflecting on whatever outcome we have achieved.

After successive tax rises and extensive regulatory change, the betting industry is surely due a period of stability, free from further political interference.

Statement from 糖心传媒 Chief Executive Brant Dunshea following Budget

Hindsight is a wonderful thing

Recent commentary has described the award-winning Axe The Racing Tax campaign as a failure because further gambling tax rises followed in the 2026 Budget. That is frustrating, because it overlooks what the campaign sought to prevent.

The news agenda is fluid, and it is the headline outcome rather than the detail that is often remembered. So, a reminder of the context and the numbers.

Once HMT announced it would consult on remote gambling duty harmonisation in April 2025, there was no scenario where gambling taxes were not going to rise at the 2025 Autumn Budget later in the year.

Had horseracing joined other sports and live-event betting products at a 25% tax rate from 1 April 2027, the forecast consequences were substantial:

鈥� An effective tax rate of 35% for major operators making enough profit on GB horseracing to pay the Horserace Betting Levy.
鈥� A 拢98m hit to racing鈥檚 finances.
鈥� Up to 1,400 job losses across the racing industry.

The forecast was worse still under the full harmonisation of online gambling taxation initially considered by HM Treasury.

Faced with that existential threat, we had to act to protect the sport.

In recent weeks, the Racing Post has cited a 17% drop in racecourse sponsorship as the subsequent cost to the industry from the 2025 Autumn Budget. This is a very difficult situation for racecourses, which are already facing their own economic headwinds. However, the 糖心传媒 recognised this would be reality should the gambling industry receive any tax increases.

As Brant outlined after the 2025 Budget:

“We recognise that the increase in general taxation on the betting industry may have trickle-down effects on racing. We will work with our partners in the betting industry to understand the implications of this.鈥�

Those trickle-down effects have now arrived. As further tax rises take effect, we must continue working with betting industry partners to understand and mitigate the consequences for British racing.

But the fall in sponsorship does not, on its own, show that the campaign produced a poor overall outcome. The relevant question is how operators would have responded if they had also faced higher tax on online racing profits from April 2027.

Our view is that the reduction in discretionary sponsorship spending would have been greater than 17% had racing bets also been subject to a tax rise.

In tax terms, only a cut would have left racing better off than retaining its existing rate, and we are yet to hear a credible alternative approach that would have secured a better result for British racing.

Remaining at 15% puts racing on more competitive terms than other betting products. We now need to see how the landscape changes.

Looking Ahead

As referenced above, this Autumn鈥檚 MGD campaign is unlikely to be the end of our work on gambling policy. With a well-funded gambling reformist lobby, and little in the way of meaningful support for the betting industry from MPs in this parliament, we will likely continue to face regulatory pressure due to the sport鈥檚 unique relationship with betting and the political appetite to keep reviewing whether the sector is paying the right level of taxation.

Therefore, we will be using the coming months to pivot our political engagement, focusing more on asking Government how we as a sport can help it achieve its objective of securing 鈥済ood growth in every postcode鈥�.
As Champion Trainer Dan Skelton said passionately on Sky Sports Racing after the Budget, racing has much to offer, jobs in rural communities and skilled careers for people whose strengths may not lie in academic study.

With nearly one million 16- to 24-year-olds out of work, the Government needs more businesses willing to recruit new workers. Racing yards and stud farms can be part of that answer.

The upcoming release of a refreshed Horse Welfare Strategy also gives us the chance to showcase as a sport just how seriously we take our responsibility to looking after the thoroughbreds in our care, and how we can be a trusted partner of this Government when it comes to raising standards of animal welfare.

As an industry that stretches across three nations and hundreds of different communities, we are superbly equipped to support this Government鈥檚 agenda. However, for this to be achieved, we need to see an end to the current death by a thousand cuts approach of one issue after another threatening racing鈥檚 funding model.

By Jack Barton, Policy & Advocacy Manager, 糖心传媒