Tax hike affecting betting shops could be 'catastrophic' for racing warns Betfred chief executive

An increase in the rate of tax levied on betting shop gaming machines could have a "catastrophic" impact on British racing, Betfred chief executive Joanne Whittaker has warned ministers.

In a letter sent to chancellor of the exchequer Rachel Reeves and culture secretary Lisa Nandy, which has been seen by the Racing Post, Whittaker claims Betfred would have to close more than a quarter of their retail estate should machine games duty (MGD) rise to 25 per cent from the current rate of 20 per cent.

The news comes with Reeves preparing to unveil her budget on Wednesday, which is widely expected to include increases in the duties paid by gambling operators.

British racing took its tax campaign to parliament in SeptemberCredit: Edward Whitaker (racingpost.com/photos)

Racing's leadership has been waging a campaign to protect the sport from the impact of a rise in the betting duty levied on operators, with protests outside parliament and the unprecedented decision to cancel race meetings on September 10.

But bookmakers have warned that racing will not be immune from the impact of other gambling tax rises.

In her letter, Whittaker said she wanted to draw attention specifically to the potential impact of proposals to increase MGD rates.

"We have undertaken our own economic analysis to determine the impact on our shops and the number of jobs that would be impacted in our retail estate," she wrote.

"Even a relatively modest increase to MGD would cause hundreds of closures and thousands of job losses at Betfred in isolation – let alone across the wider industry. This would have a devastating impact on the communities and high streets we serve and would significantly reduce the industry’s tax contribution rather than increase it."

Betfred chief executive Joanne Whittaker

Whittaker said Betfred's modelling had shown a rise in the rate of MGD to 25 per cent would lead to them closing 382 of the 1,272 betting shops they currently operate, resulting in the loss of 2,051 jobs, £52 million in tax revenue and £11m of funding to racing through levy and media rights.

She described the perception that increasing the rate of MGD would have no impact on the amount of money that horseracing receives through levy and media rights as "entirely inaccurate".

Whittaker said Betfred estimated that every betting shop generated around £23,500 in revenue per annum for horseracing but that her company "over-index on racing", meaning their contribution was greater.

She added: "If the rate were higher, the impact would be far more damaging to horseracing. This is just the impact on Betfred. The rest of the industry would be impacted in the same way, so the potential harm to horseracing would be catastrophic."

Whittaker also denied the claim that bookmakers were "scaremongering" about the impact of tax rises.

She wrote: "Our retail estate is already under immense cost pressure, absorbing £23m following the October 2024 budget change to employer’s national insurance and an increase of 17.2 per cent over the last two years in national minimum wage. To be clear, tax increases will lead to shop closures and job losses."

The Treasury has previously described horseracing as "part of the cultural fabric of the country", which was why it was the only sector to benefit from a government-mandated levy.

Read these next:

What does the RACING TAX mean for betting shops? 

The Five Great Myths of the betting tax debate and the One Great Truth - the very real dangers to racing are laid bare 

Racing will not be affected by two-tier betting duty regime, report claims 

Sign up to receive On The Nose, our essential daily newsletter, from the Racing Post. Your unmissable morning feed, direct to your email inbox every morning.