Budget 2025 blog: racing spared from tax rises but betting industry hit for more than £1bn - how the day unfolded

In case you missed it, here are the main takeaways regarding betting tax:

• The tax rate paid on racing will remain at 15 per cent both in retail and online
• General betting duty, paid on other forms of sports betting, will remain at 15 per cent in betting shops - but from April 2027 will rise from 15 to 25 per cent online
• Remote gaming duty, paid on online casino betting, will rise from 21 to 40 per cent from April 2026
• Machine betting duty, paid on land-based betting terminals, has not been adjusted
• In total, these measures are expected to raise £1.1bn by 2029-30

The budget was broadly welcomed by British racing, with the BHA saying it was a recognition by the government of the sport's "vital importance as a cultural, social and economic asset". 

However, bookmakers were in a less upbeat mood and Grainne Hurst, chief executive of the Betting and Gaming Council (BGC), spelled out the knock-on effect that increased taxation on other forms of gambling will have on racing's income, which she said will now be "severely damaged". 

Our industry editor Bill Barber has curated the best reaction and considered the significance of the changes to betting tax here, while Racing Post editor Tom Kerr has had his say in this opinion piece. We also had people out and about on course, where there was some relief following the budget. 

The budget has received a mixed reception from British racing and bookmakersCredit: Wiktor Szymanowicz/Future Publis

Racing Post editor Tom Kerr has had his say on today's developments . . .

One of the Treasury's oldest tricks is to trail such terrifying ideas before a budget that when the chancellor finally delivers something merely awful, the country breathes a sigh of relief. Racing finds itself in exactly that position today.

After months of campaigning against proposals for a 'harmonised' gambling duty that would have treated sports betting like online casino gambling, racing on Wednesday discovered the threat had been withdrawn. Gratitude is understandable, but complacency would be a mistake. 

While racing has been spared any increases in taxation, the gambling industry has been hit by a smorgasbord of duty increases, which are anticipated to cost the sector £1.6 billion a year from 2027. This is forecast to raise £1.1bn in new taxation revenue, with the balance lost – a product of reduced demand and flight to the black market. 

So while racing has dodged a bullet, it still finds itself in a warzone. The betting industry funds the sport to the tune of £350 million a year, more than two-thirds of which is media rights and sponsorship payments. Both will come under pressure as bookmakers claw back lost profits. 

Click here to read the rest of his thoughts on the budget

Nicky Henderson xxxCredit: Edward Whitaker

My colleague Oli Barnard has spoken to Nicky Henderson, who had this to say on today's news . . .

"I fully understand that there are a lot of implications, but this is terrific news as far as racing’s concerned. It goes to show that racing has played its own part in this. 

“The consequences could’ve been horrendous, so under the circumstances I’d say we have to be pleased that the industry has been given a lifeline - for all the people that are involved with it and employed in it.

“With the [Axe the Racing Tax] campaign, racing has to say well done to itself. We have hopefully managed to get the message across that it would suffer so badly if it got directly hit. I understand for some parts of the betting industry it isn’t that straightforward but the racing part can be relieved today.”

The budget was delivered in the House of Commons on WednesdayCredit: Edward Whitaker (racingpost.com/photos)

Dan Carden, co-chair of the APPG for racing and bloodstock, and MP for Liverpool Walton
I’m grateful to the chancellor for listening to people across the racing industry. This is good news for British racing and racecourses like Aintree in my constituency. Exempting racing from tax rises was an essential first step. But now the real work starts to get every part of the industry working together, get the levy sorted and improve foal numbers and prize money.

Nick Timothy, co-chair of the APPG for racing and bloodstock, and MP for West Suffolk
This is a reprieve for racing and came only after the industry campaigned hard. So I congratulate everybody who did so. But the uncertainty caused by all the speculation about the racing tax has been very damaging. Newmarket is the historic heart of British racing, and carving out the sport from tax rises will safeguard local jobs and the training yards and studs that make the town unique.

Jack Rankin, MP for Windsor
Despite this being a disastrous budget for the country overall, this is a sensible and forward-thinking move by the government. Ascot and Windsor host some of the nation’s most iconic racing events and keeping the industry free from an additional tax burden will help protect the local economy and preserve the heritage economic contribution of these great courses.

Grainne Hurst, chief executive of the Betting and Gaming Council (BGC)

British racing has cautiously celebrated its carve out but is still expected to feel the impact of the other changes to betting duties, which have been described as a "devastating hammer blow". 

Grainne Hurst, chief executive of the Betting and Gaming Council, said: "Massive tax increases for online betting and gaming announced in the budget make them among the highest in the world, and are a devastating hammer blow to tens of thousands of people working in the industry across the UK, and millions of customers who enjoy a bet.

"Regulated betting and gaming is one of the UK’s few globally successful sectors, generating £6.8 billion for the economy, contributing more than £4bn in tax and supporting 109,000 jobs, while delivering vital funding for British sport.

“Let’s be clear, there's no real exemption here for racing. Its income will now be severely damaged, as these substantial new tax burdens will inevitably force operators to cut costs, including on marketing, sponsorship and promotions. Any threat to betting shops also hits racing’s funding as does a massive expansion of the black market online.

"While we welcome the decision not to raise land-based duties and to scrap bingo duty - these excessive online tax increases will undermine jobs, investment and growth across the UK.

“The government's budget is a massive win for the incredibly harmful unsafe, unregulated gambling black market, which pays no tax and offers none of the protections that exist in the regulated sector.“These decisions are bad for jobs, bad for customers, bad for sports - and bad for safer gambling."

Brant Dunshea: the BHA's acting chief executiveCredit: ScoopDyga/IFHA

The BHA's acting chief executive has welcomed today's outcome and said it "demonstrates that the chancellor has listened to our concerns and rightly recognised that racing is a unique national asset".

He added: "Racing has been part of the British way of life for hundreds of years. It binds our communities together in shared experience, it brings joy to millions. It puts the country on the world stage. It's right that the government has understood this and acted accordingly. 

“At the same time, we recognise that the increase in general taxation on the betting industry may have trickle-down effects on racing. We'll work with our partners in the betting industry to understand the implications of this, and how we can work together to ensure that British racing continues to thrive."

The BHA's chair Lord Charles Allen expressed similar sentiments, and said: "The government has rightly recognised that we are not only a vital part of the fabric of the British way of life, but we are also a global leader and one of the country’s most important soft power levers. We want to maintain Britain’s place on the world stage."

Rachel Reeves announced remote gaming duty (RGD) will rise from 21 to 40 per cent from April 2026.

But what is RGD?

Betting tax is paid by operators on their profits, essentially what is left from total stakes after winnings have been paid out. RGD covers online games of chance, such as slots, whereas machine games duty (which was not mentioned in the budget) covers machines found in betting shops and general betting duty covers fixed-odds and pool bets on racing, as well as other sports.

The BHA: has welcomed the government's decision to "spare the industry" from any increase in direct taxationCredit: BHA

British racing's reaction is beginning to filter in after the budget, and here is the BHA's statement:

British racing welcomes the decision by the government to spare the industry from any punishing increase in direct gambling taxation.

In her budget, Rachel Reeves confirmed that racing’s remote betting tax rate would remain at 15 per cent in recognition of its vital importance as a cultural and sporting asset enjoyed by millions of people across the country every year.

A rise in taxation on online racing betting would have had catastrophic implications for an industry that is an integral part of British society and culture, supporting 85,000 livelihoods and with an economic impact of £4 billion.

It is welcome that the chancellor has today rightly recognised the vital importance of racing as a cultural, social and economic asset and acted to help secure the sport’s long-term future.

The chancellor's positive decision recognises the potential damage to our sport, and the jobs supported by it, if the government followed through on its proposal to “harmonise” remote gambling taxes and place horserace betting at the same rate as online casino betting.

While the BHA led the sport’s response to the Treasury’s consultation, it was an all-of-sport effort to come together in a way that demonstrated the strength and solidarity of racing when collaborating with a shared purpose. We are grateful that the Treasury and Number 10 have listened to racing, speaking as one, and acted to protect the future of racing.

We also note the increases in other gambling duties for the betting industry a result of the budget, given the government need to raise more money from general taxation. The relationship between racing and betting remains as important as ever and we will be working with our partners in the betting industry to understand the impact of this on British racing.

The BHA will now analyse the budget documents in greater detail to establish whether there are any other potential issues that may impact racing.

We look forward to continuing to work with the government to champion our sport and ensure that British racing can support its agenda for growth moving forward.

The contents of the budget were cautiously well-received at WetherbyCredit: John Grossick

David Carr has been testing the temperature at Wetherby . . .

Wetherby is not unused to bad news from the government as it was racing in 2020 on the day that the immediate pandemic shutdown was announced. This was very different.

An overnight frost that stayed in patches for an annoyingly long time meant it took three inspections before Wednesday's meeting was given the all-clear - by which time news had broken thanks to the Office for Budget Responsibility's inadvertent early publication of Rachel Reeves's handiwork.

Both were joyously received by a pair of retired bankers who had travelled up from south to complete the full house of attending every course in Britain.

"We're racing enthusiasts," said Jeff Spencer from Kent, who has been going racing since a trip to Huntingdon on the August Bank Holiday in 1986.

"It's brilliant," he said of the chancellor's exemption of racing from increases in betting duty.

"We've been banging on about it for such a long time, the concern of what an extra five per cent or whatever could do.

"I'm glad she's managed to split betting on racing and gaming machines because they're miles apart."

You can read the full story here. 

Share price for William Hill's parent company Evoke down 11.1 per centCredit: john grossick

The market has been digesting the implications of the chancellor's budget and the picture has evolved since the initial OBR leak. 

Entain, the Coral-Ladbrokes operator, has recovered earlier loses and is now up 4 per cent. Flutter too has bounced back and is up 1.8 per cent on the day. 

The outlier is William Hill-operator Evoke, which is still down 11.1 per cent, perhaps reflecting their heavy exposure to UK remote taxation measures relative to their market peers.

The Treasury has published the budget, which expands on the topic of betting tax below:

"Online gambling has grown and, while many people in the UK enjoy it in moderation, for others it can cause harm. Earlier this year, the government consulted on proposals for a new single remote betting and gaming duty. Following feedback on the different nature of these activities, and higher levels of harm associated with remote gaming compared with remote betting, the government will not be proceeding with this proposal. The government is instead raising duties on online gambling, with a larger increase on gaming."

Key details here:

• Remote Gaming Duty will increase from 21 per cent to 40 per cent from April 2026.
• A new Remote Betting Rate at 25 per cent within General Betting Duty will be introduced from April 2027, maintaining a clear differential in the tax rates for these two activities.
• Recognising the unique circumstances of the horseracing industry, the government will exclude remote bets on horseracing from the new Remote Betting Rate. Duty on remote horserace betting will remain at 15 per cent.
• Bingo Duty will be abolished from April 2026. 
• An additional £26 million of funding will be provided to the Gambling Commission over the next three years to tackle the illicit market.
  

Reeves has outlined a number of changes that could impact racingCredit: BBC

A few other points of interest here: 

• OBR predicts inflation will rise to 3.5 per cent this year
• Income tax and National Insurance thresholds frozen until 2031
• An annual 'mansion tax' of at least £2,500 to apply to homes worth more than £2m
• Fuel duty will be frozen until next September before gradually increasing
• The national living wage and national minimum wage are also increasing
• Mayors in England will be given powers to raise visitor levy on overnight accommodation
  

Rachel Reeves: raised her plans for betting tax in her statementCredit: Wiktor Szymanowicz/Future Publis

Reeves has elaborated on her plans for betting tax in the House of Commons. 

"I will also reform gambling taxes in response to the rise in online gambling," she said. "Remote gaming is associated with the highest levels of harm and so I'm increasing remote gaming duty from 21 per cent to 40 per cent. 

"With duty on online betting increasing from 15 per cent to 25 per cent. I'm making no change to the taxes on in person gambling or on horseracing and I am abolishing bingo duty entirely from April next year. Taken together my reforms to gambling tax will raise over £1bn per year by 2031."

Shadow sports minister Louie French has had his say on X:

"Labour's gambling tax hike is reckless. It will push people onto the unsafe black market and cost thousands of jobs across Britain. This is just another stealth tax on working people having fun, and it will hurt our economy.

"Labour's hostility to people having a bet could cost our country billions in tax revenues, see businesses close and jobs lost, and jeopardise funding for British sport and charities. Rachel Reeves is gambling with lives and livelihoods."

Kim Bailey: reflected on the budget while speaking at Market RasenCredit: Edward Whitaker

Kim Bailey, speaking at Market Rasen, said: "We have to treat this as cautiously good news. It's not often trainers go and do anything, let alone campaign, and the fact of the matter is people have listened. We've all worked very hard - I had my local MP to see me, which I'd not done before.

"I don't think anybody realised how nasty it would've been had it really gone the wrong way. It would've been soul-destroying for everyone in the sport and the knock-on effect would've been horrendous. We've got to be thankful people got their views across, and it could have been lots worse."

Trainer Mark Walford had a one-two in the opener at Wetherby and also reflected on the news.

"That was great to hear," he said. "It was worrying and we need every bit of help we can get. Everyone rallied together and obviously made people aware of the situation and how important it is to us. Racing as a whole has got behind the campaign and it shows what we can do."

According to the Office for Budget Responsibility (OBR), the tax increases revealed today are expected to cost the industry £1.6bn from 2027-28, when the general betting duty change is introduced. 

The OBR estimates that "operators will seek to pass through around 90 per cent of the duty increases by increasing prices or reducing payouts, leading to a reduction in consumer demand". 

This will reduce tax yield by £0.6bn the same year. The OBR says this forecast also captures "potential substitution to the illicit market" - in other words, black market growth.

One betting industry source said: "This is an early Christmas present for the black market, even the Treasury admit huge amounts of tax will be lost to illicit operators. No one wins today apart from criminal gangs.”

Gambling stocks have taken a hit following accidental budget publicationCredit: John Cooper

Some early reaction from the market, where gambling stocks have taken a hit following the accidental publication of the budget document:

• Evoke, which operates William Hill, is down 14.1 per cent
• Sky Bet, Paddy Power and Betfair operator Flutter is down 2 per cent
• Entain, which runs Coral and Ladbrokes, is down 2.7 per cent

Rachel Reeves: is delivering her budget statement in the House of CommonsCredit: Nicola Tree

After beginning her statement at the dispatch box by acknowledging the "deeply disappointing" early release of the OBR report, Rachel Reeves is speaking amid a fairly raucous atmosphere.

She said: "Today's budget builds on the choices we've made since July last year, to cut NHS waiting lists, to cut the cost of living and to cut debt and borrowing. No doubt we'll face opposition again but I've yet to see a credible or fairer alternative plan for working people. These are my choices, the right choices for a fairer, stronger and more secure Britain."

Here is some early reaction from Racing Post editor Tom Kerr:

The freezing of rates on horseracing will be seen as a major victory for the sport's 'Axe the Racing Tax' campaign and a reprieve for the sport's battered finances. 

That outcome had been widely reported before today's budget - extraordinarily published in error before Rachel Reeves has even risen to speak at Westminster. 

More surprising is the absence of any increases to machine gaming duty, which would have significantly impacted the profitability of betting shops and thus posed a major risk to racing's revenue.

It seems the pain is entirely focused on online casino - which has been clobbered with a near-doubling of rates - and online sports betting, excluding horseracing, which will rise from 15 to 25 per cent in 2027.

Rachel Reeves: is still set to deliver her budget this afternoonCredit: Leon Neal

We have a bizarre situation in which Keir Starmer and Kemi Badenoch are going through the motions of a PMQs before the budget but the details are already out there after being published by the OBR. 

Here are some of the other headlines:

• Income tax thresholds to be frozen until the end of the 2030-31 financial year
• Fuel duty to be frozen at its current rate until September 2026
• The OBR report seemingly confirms a new tax for houses worth more than £2 million