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

After chancellor of the exchequer Rachel Reeves unveiled her autumn budget on Wednesday afternoon, we assess the key tax measures she announced and their ramifications for betting, horseracing and punters.

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

• Tom Kerr: Racing dodged a tax bullet – but make no mistake, we're still in a warzone 

• Blog: Racing spared from tax rises but industry hit for more than £1bn - how the day unfolded

What happened with gambling taxes?

After weeks of fevered speculation, increases were confirmed for both general betting duty (GBD) and remote gaming duty (RGD) in the budget. These are the taxes bookmakers pay on the profit they make from gambling after winnings have been paid out.

RGD, which covers online casino games such as roulette, has been hiked to 40 per cent from 21 per cent from April next year.

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

For GBD, the tax changes are more nuanced. In betting shops it will remain at 15 per cent, which will also be the rate for bets placed online on horseracing. However, from April 2027 online GBD on other sports, such as football, will increase to 25 per cent.

Machine games duty, which is the tax paid by bookmakers on in-shop betting terminals, had been expected to rise, but was left unchanged by Reeves.

What is the impact on horseracing?

Racing will be cautiously celebrating the immediate victory of preventing an increase in GBD, although increases on other products will have an impact.

Fears over a rise in the duty paid on horseracing prompted the sport to launch the 'Axe The Racing Tax' campaign and the BHA, speaking for British horseracing, welcomed the government's decision not to implement a "punishing increase in direct gambling taxation".

Racing came together over the 'Axe The Racing Tax' campaignCredit: BHA

Betting shops have also been shielded from direct tax increases – another relief for racing, as shops remain major contributors to the sport's finances through media rights and levy payments. However, shops will not be entitled to the lower business rates relief from April, making them more expensive to operate.

The biggest impact to the sport is likely to come from the indirect consequences of bookmakers reducing sponsorship, cutting marketing and removing customer incentives like bonuses. 

How about punters? Will they be impacted?

In its report, the Office for Budget Responsibility (OBR) said the “behavioural responses to these [tax] changes are uncertain” and added: “We estimate that operators will seek to pass through around 90 per cent of the duty increases by increasing prices or reducing payouts. We also assume that operators will over time restructure their product offering to minimise tax costs.”

In essence, the OBR is predicting bookmakers will seek to reduce risk and costs in its customer base to keep more of the money people bet with them. That means punters can expect a less attractive proposition: worse odds, fewer bonuses and less appetite to lay risky bets.

These changes may result in the regulated market becoming less competitive and desirable for punters. The OBR acknowledged this in its report, forecasting that up to £0.5bn could be lost from the regulated market due to reduced customer demand and movements to the "illicit market".

What other measures were announced?

The 5p fuel duty cut will be extended until September 2026, benefiting anyone who has to travel for work in racing. 

There will also be a rise in the minimum wage. The hourly rate for 21s and over is increasing 50p to £12.71; those aged 18-20 will have an 85p rise to £10.85; and under-18s and apprentices will be bumped up 45p to £8 an hour.

There was also confirmation of changes to business rates from April 2026. This is of significant concern to those operating racing yards, which are set to no longer be able to claim rates relief of up to 40 per cent as they are not deemed to be “wholly or mainly” used for in-person retail, hospitality or leisure activity provided to “visiting members of the public”.

Read these next:

Racing dodged a tax bullet – but make no mistake, we're still in a warzone 

Racing welcomes exemption from betting duty increases but warns of challenges ahead and impact of rises on sport's funding 

'One of the few times I've seen racing pull together' - budget leaks and the thawing sun do their bit to raise a smile at Wetherby 

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