Gambling taxes are set to rise in the budget - it's now a question of where and by how much

According to polling released by YouGov last week, 51 per cent of the public believe gambling taxes will be raised in the budget.

That means nearly half the population has not been paying attention. Should chancellor of the exchequer Rachel Reeves leave gambling duties untouched on Wednesday it would be a shock of Foinavon proportions.

However, given that Reeves all but confirmed that the gambling industry was in her sights when speaking at the Labour Party conference in September, it is more a question of which duties will rise and by how much.

The subject even made PMQs in the Commons last week after an ITV report that Sky Bet had followed the example of many of their peers by relocating their headquarters to Malta in order to cut their tax bill.

Not that Keir Starmer engaged at all with Liberal Democrat leader Ed Davey's slightly confused point about operators' UK profits and gambling taxation.

Reeves is said to be planning a 'smorgasbord' of tax hikes and, out of all of them, raising gambling duties is probably the most painless from a political perspective.

YouGov found that 82 per cent of those polled thought that increasing taxes on gambling companies was the "right thing to do", the highest response across the 13 policies examined.

British racing has waged a fierce campaign against tax risesCredit: Edward Whitaker (racingpost.com/photos)

The chancellor's plans around gambling have not been completely without discomfort for the government though, with the Treasury said to have been irked by British racing's 'Axe the Racing Tax' campaign which has sought to protect the sport from increased taxation.

There can be no guarantees until Wednesday, but among all the speculation and leaks that have featured in the seemingly interminable wait for Reeves to deliver the budget, it would seem that racing's pleas have not fallen on deaf ears.

The latest evidence came last week when the Financial Times reported that racing would receive what was described as a "reprieve" from Treasury plans to create a two-tier system for general betting duty (GBD).

The 'Pink 'un' claimed the government planned to leave GBD for bets struck in bricks and mortar premises such as betting shops unchanged at 15 per cent, but was going to impose what was described as a "slight" increase in the rate for GBD online – with the exception of horseracing.

All of which is a long way removed from the plans for a simplified system of gambling taxation proposed by the Treasury in the consultation launched in April which provoked racing's campaign in the first place.

The rationale for different rates of GBD for land-based and online gambling was not explained, but if it was to offer some protection to betting shops then it is unlikely to be of much succour to the major retail operators.

Betfred chief executive Joanne Whittaker has written to Rachel Reeves and Lisa Nandy

Certainly not for Betfred, whose chief executive Joanne Whittaker wrote to both Reeves and culture secretary Lisa Nandy recently, setting out how damaging a rise in the rate of machine games duty (MGD) would be for betting shops.  

The two ministers were told that Betfred's modelling had predicted that a rise in MGD to 25 per cent from 20 per cent would lead to the closure of 382 of the company's betting shops, with the loss of 2,051 jobs and £52 million in tax revenue.

Crucially for British racing, it would also lead to an £11m reduction in funding, Betfred claimed, through the loss of levy and media rights payments; and that was from just one firm.

A relatively modest increase in MGD, as set out by Whittaker, is still far below the hike to 50 per cent proposed by the Institute for Public Policy Research (IPPR) think tank, and backed by former prime minister Gordon Brown.

Betfred's modelling would suggest the IPPR's claim that such a massive hike in MGD, along with increases in other gambling duties, would help raise more than £3 billion for the Treasury is somewhat optimistic.

The IPPR and fellow think tank the Social Market Foundation have also called for remote gaming duty to be more than doubled to 50 per cent, despite warnings that this would simply help drive customers to the black market.

Hopefully, the Treasury will have recognised the risks of such swingeing rises in gaming duties but, given the state of public finances and the apparent support for the gambling industry paying more, they will be going up to some extent.

And while there appears to be a distinct possibility that the rate of duty concerning horseracing bets may be left untouched, there is little chance that racing will be left unscathed by the changes to gambling taxes elsewhere.

Belief and reality have failed to match when it comes to Racing Digital

IT projects overrunning and costing more than they were budgeted for is not an unusual event.

An article in The Economist this year said that 40 per cent of IT projects overrun on costs and that just under a fifth have a cost overrun of more than 50 per cent of their budget.

It is not yet clear where Racing Digital sits on that spectrum but we do know, thanks to the BHA's latest set of accounts, that the costs of the project are "significantly higher than budgeted" and that it is long overdue.

A research paper published three years ago claimed that experts assume that IT cost risk is "finite and predictable" when the opposite is the case. The mismatch between belief and reality explained why IT projects have a tendency to overrun.

Racing Digital is the new online platform which is set to replace the current Racing Administration site, where entries and declarations are made, ownership is managed, stable employee information is recorded and various other transactions are made. The three-year project was due to be completed by 2024, but it has been bedevilled by delays.

At the start of this year the plan had been for the new system to be delivered in three phases, the first of which, focused on racehorse ownership, was due to be introduced in the first half of this year.

The other phases – one covering race administration such as entries and declarations, the other covering areas such as licensing, stable employees and colours – were planned for the first half of 2026.

However, we have now got to the end of 2025 and there is no sign yet of any part of Racing Digital being delivered.

It would appear that managing the crossover between the two systems has proved more difficult than first thought, a mismatch between belief and reality perhaps.

Barber's bullets

Gambling features in new men's health strategy

Preventing gambling-related harms was part of the first men's health strategy for England announced by the government last week.

Young men aged between 25 and 34, white British men and men from some ethnic minorities were singled out for interventions including support from local authorities and the voluntary sector, development of new digital tools, and building the evidence for "what works".

The government said it would "raise awareness of the risks of harmful gambling through national campaigns and local initiatives".

Lord Foster of Bath, chair of Action on Gambling, described the strategy as "an important milestone", adding: "The fact that it correctly identifies gambling as a significant risk is particularly welcome."

Gambling Commission hits Videoslots with fine

Online operator Videoslots was last week hit with a £650,000 fine after a Gambling Commission investigation revealed anti-money laundering (AML) and social responsibility failures.

The commission said the company would also receive a warning and is required to undergo a third-party audit to ensure it is effectively implementing its AML and safer gambling policies, procedures and controls, something that director of enforcement John Pierce said they would monitor closely.

Videoslots' monthly deposit limits were found to be ineffective when tested in practice, while AML controls were not applied to the standards expected by the commission.

William Hill exit markets

William Hill is withdrawing from 13 markets, primarily in Africa, from December 2.

The company said that residents in Angola, Bolivia, Burkina Faso, Cameroon, Kenya, Mozambique, Nepal, Nicaragua, Nigeria, the Republic of Congo, the Democratic Republic of Congo, Somalia and Vietnam would not be able to participate in William Hill's offerings and services.

William Hill's parent company Evoke had warned in its last trading update that it had seen a decline in revenue in "non-core international markets".

Dates for the diary

Wednesday: British racing and the gambling industry will discover their fate when chancellor of the exchequer Rachel Reeves delivers the budget.

Thursday: The impact of any increases in gambling duties is likely to be discussed at questions to ministers from the Department for Culture, Media and Sport in the House of Commons.

Read these next:

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

Treasury's gamble risks driving players underground as committee's flawed report ignores key evidence 

Committee fails to get to grips with the nitty-gritty of gambling tax - but events may have overtaken it anyway 

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