Arc chief warns of 'truly grave' threat from tax rises in impassioned defence of betting shops

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Parliamentarians and key figures from the racing and gambling industries have been warned of the "truly grave" threat from increased taxes on betting shops.

The comments came from Arena Racing Company chief executive Martin Cruddace as he spoke at a reception at the House of Commons on Tuesday evening to celebrate 250 years of the Betfred-sponsored St Leger, at Doncaster a week on Saturday.

His impassioned defence of the sector came in the light of comments by prime minister Andy Burnham which lumped betting offices in with "rogue" operators on the high street and a pledge to change the 'aim to permit' rule to make it easier for local councils to block new shops from opening, something Burnham reiterated during a parliamentary debate on Tuesday.

Meanwhile, former prime minister Gordon Brown last week called for a major hike in the tax levied on gaming machines in betting shops, which could have a devastating impact on British racing's finances.

Industry modelling has claimed that proposals to double the rate of machine games duty (MGD) would lead to 2,912 betting shops closing and a reduction in contribution to racing in levy and media rights of £70 million.

Betting shops have been declining in number

Cruddace told the reception attended by a number of MPs that people had gathered there "in no small part" because of the "ongoing and interdependent relationship" between horseracing and betting.

He added: "There has been plenty of conjecture over recent weeks and months about the role of licensed betting shops on our high streets.

"I must use this opportunity, in case there was any doubt, to be clear that licensed betting shops, staffed by trained employees operating under strict regulation, are not rogue or criminal operations which should be looked down upon or sniffed at or treated in the same way as retail premises that exist solely on slot machines.

"In terms of employment and investment, and as a space for shared community, I see licensed betting shops as a positive contributor to our towns and cities that offer access to our sport to a huge number of customers."

Cruddace pointed out that betting shop numbers had fallen by a third since 2019.

He added: "This is an industry that does not have a regulatory and tax environment for growth, and yet the prime minister, who we of course wish well, seems anxious to explain he wants to stop their proliferation when all the evidence shows a massive contraction.

"I fear he genuinely confuses a betting shop with pure machine-based retail arcades that would not know a horse if it galloped past its blacked-out front."

Cruddace pointed out betting shop numbers had fallen by a third since 2019Credit: Mark Harvey

Cruddace said that further betting shop closures would push away racing's customer base, adding: "Horseracing is an industry that has its issues, some no doubt self-inflicted, but at the same time we attract incredible inward international investment and have a product that is exported worldwide and is a particularly brilliant advert for this country.

"The threat to the sector of any additional tax rises on the retail estate is truly grave and the perversity is that any increase in tax will cause further substantial closures. That will then reduce the amount actually recovered as it stands now."

This summer the Social Market Foundation released a report calling on government to double the MGD rate to 40 per cent for category B gaming machines found in betting shops, arcades and bingo halls, claiming it could yield an extra £275 million to £458 million in tax revenue.

Cruddace said: "The economic rationale for tax rises for the retail betting sector is simply threadbare, and the call by the Social Market Foundation for such an increase in taxes in the retail betting sector shows perhaps naivety and a misunderstanding of the actual economics of a betting shop.

"It appears a somewhat political gesture designed for cheap headlines, and horseracing cannot be collateral damage when, I would argue, the target of the Social Market Foundation, the prime minister and the former prime minister may be elsewhere.

"I would respectfully ask parliamentarians in the room to closely consider that point and what role the licensed betting office plays in terms of both employment and regeneration."

The reception was co-hosted by the Betting & Gaming Council, whose chief executive Grainne Hurst told guests that racing and betting had a "genuinely symbiotic relationship" and that "neither can thrive without each other".

She added: "That matters politically because Westminster sometimes talks as though betting can be weakened without consequences for racing. It cannot.

"If regulated bookmakers close shops, reduce investment or cut sponsorship, racing feels the impact. And, if customers move to the illegal market, that market pays no betting levy, funds no British sport and offers none of the protections of the regulated sector."

Read these next:

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Grave threat to racing's finances as Gordon Brown calls for massive gambling tax hike in move that would devastate sport 

Andy Burnham insists giving councils more power to block betting shops will 'crack down on businesses that aren’t good for our communities'  

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