Racing must stay united on betting tax threat, warns Jockey Club chief Jim Mullen

Racing must remain united in warning about the seismic threat of betting tax harmonisation, the Jockey Club chief executive has said in a significant intervention aimed at the wider industry.

The warning from Jim Mullen, CEO at the Jockey Club since the start of June, comes amid growing tensions between racing and bookmakers, as some elements within the sport's leadership have offered tacit or public support to proposals that would see swingeing increases to the rate of tax paid on online casino gambling.

Instead, Mullen stressed the sport should remain united in its messaging as part of 'Axe The Racing Tax' campaign, launched after the Treasury consulted this summer on proposals to harmonise online gambling duties. Betting on racing and other sports is subject to a 15 per cent duty, while casino and slots are taxed at 21 per cent.

Chancellor Rachel Reeves announced on Wednesday the budget will be held on November 26, when she will outline the government's plans for raising or lowering taxes, including those relating to gambling, and setting out spending commitments. Some estimates have Reeves facing a shortfall of more than £40 billion, while former prime minister Gordon Brown has in recent weeks led calls for steep increases to taxes on casino in particular.

Mullen, a former chief executive of Ladbrokes Coral, emphasised the need for racing to concentrate on getting its concerns across about the potential impact of harmonisation, rather than engaging in disputes that could "drive a wedge between us and our betting partners". 

Racing will have a major opportunity to get its message across after it took the unprecedented step of voluntarily cancelling all meetings on Wednesday, with events taking place in Westminster to drive home the sport's fears.

Carlisle is one of the tracks which has had its card on Wednesday, September 10 moved to create a blank day of racing in BritainCredit: John Grossick (racingpost.com/photos)

Mullen said: "The first thing we want to do is focus on what the problem statement is, which is tax harmonisation, and what we want to achieve is for the Treasury, and therefore their advice to government, to just stop and think about the impact. This is a stop and think moment, and then we hope people will go ‘yeah, this doesn’t really work, does it?'

"I think we’ve done very well. We have come together, it’s been very positive. I just want to make sure we stick to what the problem is. There’s so many different opinions in racing about many things, and this campaign has started with a key objective about addressing the tax harmonisation.

"And that leads us into working with our betting partners to make sure the overall racing product is as best as it possibly can be."

• Europe's €80bn gambling black market shows the unintended consequences of hiking gambling duty - but will the UK government listen? 

In recent months a growing divide has emerged between some parts of racing and bookmakers, who have pushed back against suggestions from within the sport that the duty should be raised on casino gambling. In July, the National Trainers Federation gave its "full backing" to a proposal from the Social Market Foundation think tank, which called for casino to be taxed at 50 per cent and sports betting at 25 per cent. Horseracing would be taxed at just five per cent under this proposal, with the levy increased from ten to 20 per cent.

Mullen said he and the Jockey Club have no interest in engaging with that conversation, adding it is important the betting industry is not "disincentivised" from working with racing via its investment and promotion of the sport.

Speaking to the Nick Luck Daily podcast, Mullen said: "We need to come together. Racing has a history of having diverse views and having respectful differences of opinion, but this matter is so important. Racing needs a betting industry which recognises the value of a strong racing product and a betting industry that wants to continue to invest and promote our sport, and not one which is disincentivised in doing so.

"That does not mean we won’t have differences of opinion. Sparks may fly, but that’s been done in private and those conversations will be challenging. But now is not the time."

Independent modelling commissioned by the BHA forecast racing could lose at least £66 million in income a year if the tax rate on betting on the sport is harmonised with the 21 per cent levied currently on online games of chance.

Some of that forecast loss in income could be as a result of bookmakers reducing promotion and sponsorship of the sport, a view that was reinforced when it was announced exclusively in the Racing Post on Monday that Flutter, the parent company of Paddy Power, Betfair and Sky Bet, has pulled its £1 million funding of ITV's Champions: Full Gallop due to fears the government will sharply raise betting taxes, plunging the future of the docuseries into serious doubt.

• 'It’d be a great shame if it doesn’t carry on' - Paul Nicholls laments potential loss of Champions: Full Gallop 

Mullen believes the decision can be presented as part of racing's core argument and added: "If you say this is a clear example of a knock-on effect of these government proposals, you start to strengthen your core argument with the treasury and government. 

"If you get distracted saying this is a threat from the betting industry, you get distracted away from the core argument. The Jockey Club is looking at that to say here’s an example of what could happen. There’s a myriad of other betting partners who sponsor racing. Let’s focus on what will happen if we lose that sponsorship, not in the event of saying let’s have another side argument about whether or not betting can afford to invest in racing. This is a distraction."

He added: "I’ve just come back from Wincanton and Exeter and they put on excellent racing, particularly for the communities, and we run a profitable business there. But it’s tight margins. 

"This is not a faceless tax, where the impact will just be it might get a bit tighter for the industry that’s been taxed. This genuinely is the future of racecourses and communities around the country and if we can get that message across, then we will succeed.

"Stick to the point. We have a very good case. It’s the first time I have seen that I can remember that all of racing has come together on a single point. Let’s stick to that and we might have a very good chance of winning."

Read these next:

Budget to be revealed by Rachel Reeves on November 26 on crucial day for British horseracing 

Lord Allen backs tax campaign as he states vision for British racing to become a 'commercial and cultural powerhouse' 

Racing risks losing major TV showcase as Flutter halts £1 million funding over tax fears 

Write to your MP about the Racing Tax

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