Sponsorships to be hit after bookmakers announce cutbacks in wake of budget tax increases

Bookmakers on Thursday warned racing and punters would feel the impact of major tax hikes as firms reduce marketing and promotions following Wednesday's budget. 

Betting giant Flutter Entertainment - the owner of Betfair, Paddy Power and Sky Bet - and Evoke, the parent company of William Hill, said spending would be reduced because of the sharp increases in betting duties, while smaller operators such as BetGoodwin and DragonBet warned they were also reviewing or withdrawing their sponsorship commitments. 

• Racing hails 'positive' result following budget but bookmakers warn sport will be hit by other gambling tax hikes 

• The budget revealed big tax increases on the betting sector – what will the impact be on horseracing and punters? 

• Watch: Tom Kerr breaks down the major implications of the gambling tax increases revealed in the budget

Following the budget, remote gaming duty (RGD) will be upped to 40 per cent from 21 per cent from April, and general betting duty (GBD) for online sports, except horseracing, will rise to 25 per cent from 15 per cent from April 2027, but betting shops were mostly protected from the changes.

Greg Knight, managing director of Jenningsbet, an independent retail-focused bookmaker, said the changes “gave a voice not only for racing but also for the betting shop industry with the measures taken”.

In contrast, James Lovell, the co-founder of DragonBet, which takes bets via on-course pitches and online, said the budget was “a lot worse than expected” and his company was assessing what steps it would take.

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He said: “We’re a small company that started on the racecourse and our heart is in racing and we still support it where we can. Racecourse sponsorship is something that we have done and want to be able to do, but the expectation is we're going to have to roll it back.

“I had a call from one racecourse manager today because he’s had two bookmakers pull out of sponsorship deals for the next couple of years and he wanted to know if we were planning to do the same. 

“You have to understand this isn’t something that we want to do and it’s not a backlash. I’m certainly trying to do it with a calm head, but with these increases businesses are going to have to cut back and sponsorship is one of the things you can look at straight away.”

Lovell added his view that some people in racing held a misconception that if taxes increased on other betting products that there would be more money to spend on racing, or there would be more focus on it from layers.

He said: “Bookmakers have a pot of money where these things are funded from and that comes from all the products offered. You have your forecasts and your profits and from there you can make commercial decisions, so it’s almost irrelevant racing hasn’t been touched because there is just less money to spend. 

“Frankly, the biggest losers in this are consumers. Bookmakers are going to increase margins, and there are going to be fewer concessions such as free bets and best odds guaranteed. I would add that this will potentially boost on course as you can get a good bet on there, but it won’t make up for the shortfall from this budget.”

In post-budget statements, Flutter and Evoke outlined plans to reduce sponsorship and promotions, while BetGoodwin, who sponsor at Plumpton and Fontwell, said on X: “We have taken the decision to cut all our horseracing sponsorship. So disappointed that horseracing bodies didn’t see the bigger picture.”

BetGoodwin: set to end their sponsorship of horseracing after the budgetCredit: Alan Crowhurst (Getty Images)

The concerns raised by a range of bookmakers were in contrast to the views held by Jenningsbet boss Knight, who was encouraged that GBD was left unchanged in betting shops, there was no rise in machine games duty, and that self-service betting terminals were exempted from increases to RGD.

Knight said: "The Treasury and the chancellor gave a voice not only for racing but also for the betting shop industry with the measures taken. They were convinced that community-based betting and entertainment was a good thing, as they also removed the levies from bingo halls. 

"Your outlook on the budget is going to entirely depend on whether your focus is online or in-person betting. It was a big statement when [the government] said they wanted to protect community-based betting."

The ramifications of the budget on the likes of sponsorship was raised in parliament on Thursday by shadow sports minister Louie French, who said the "regulated gambling sector provides over £400 million of crucial sponsorship to British sport" and that the tax changes “will fuel the illegal black market”. 

In a question to sports minister Stephanie Peacock, French asked: “How will her department fill the black hole in funding for British sport and what impact assessment her department has done on this and the job losses across the sector?”

In response, Peacock said the government "have made fair choices, we believe" and that French's concerns would be relayed to gambling minister Baroness Twycross.

Read these next:

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