Racing tax 'could be the straw that breaks the camel's back for Britain's breeding industry'

Changes to gambling taxation could be the straw that breaks the camel's back for Britain's breeding industry, the government has been warned.

Thoroughbred Breeders' Association (TBA) chairman Philip Newton said ministers should instead see British racing as an opportunity for growth.

Newton was speaking as British racing prepares its responses to Treasury proposals to harmonise online gambling taxes into a single Remote Betting and Gaming Duty.

That could result in the tax rate on betting on racing and sport rising from 15 per cent to the 21 per cent duty levied on online games of chance such as casino games and slots.

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Analysis commissioned by the BHA has found that such a move would cost the sport £66 million in lost income as bookmakers looked to mitigate the rise by offering worse-value odds, cutting offers and spending less on sponsorship.

The TBA has already warned that the British breeding industry is under pressure, with ramifications for the wider sport, as foal crops fall far more quickly than expected.

Modelling by the TBA has found the foal crop in 2026 could drop to as little as 3,447, 25 per cent down on the 2022 figure and already below the best-case position previously projected for 2051.

Newton warned that an increase in the duty paid on betting would only exacerbate the worrying situation.

"The change in betting duty will affect levy revenue," he said. "The whole of the industry and the breeding industry relies on this to provide prize-money.

"It's already at levels which don't provide the return that the industry wants and if it drops away further then it just compromises the whole of the industry.

"The breeding industry is losing breeders exponentially and the foal crop is under the most severe pressure. Another straw and eventually the camel's back is going to go."

Newton said it was already hard to make a case for investment in breeding.

He added: "Where the major correction in the foal crop is going to come is in the commercial market because the commercial breeders aren't making returns. Three out of four yearlings fail to make a return on their costs.

The breeding industry has been losing breedersCredit: Edward Whitaker (racingpost.com/photos)

"Even someone who pleads ignorance of arithmetic can work out that if three out of four things lose money you're not going to stay in it for very long."

Newton said the government should instead look at British racing as an opportunity, adding: "Not as an opportunity to tax out of existence but an opportunity to grow revenue.

"I'm absolutely certain that given the right circumstances and the right strategic plan that we can be a much bigger GDP revenue generator and a net tax revenue generator."

The government's consultation on its proposals closes on July 21, with the Treasury having said that it would decide on the duty rate as part of this autumn's budget process.

The BHA has urged the sport to collectively lobby the government about the proposals and has begun rolling out a public campaign with the slogan ‘Axe the Racing Tax’.

Newton added: "We're encouraging all of our members to join in and write to their MPs. We are foursquare behind every industry effort, and if there's anything further that we can do then all the BHA has to do is call."

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