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

The Treasury committee last week told the government not to listen to gambling industry "scaremongering" and said it should hike the tax rate for what it described as "online betting games".

It was not clear to what the accusation of scaremongering was referring, but if it were the threat of illegal gambling, then yet another example of the black market was highlighted just a few days before the select committee issued its report.

The front page of Le Parisien last Tuesday had the headline 'L'Explosion des sites clandestins' and the picture of a phone with a roulette wheel. The headline came from new figures produced by L'Association Française des Jeux en Ligne (AFJEL), France's online gaming association.

AFJEL claimed the illegal market had surpassed the regulated online gambling market in France, with 5.4 million French players on the illegal market compared to 3.5 million players on the regulated market, and a 35 per cent increase in players on the illegal market since 2023. 

The news follows the recent revelation that the black market had overtaken the licensed market in the Netherlands for the first time since gambling was regulated there in 2021.

Both the French and the Netherlands gambling markets operate with tax regimes much higher than the one currently in place for the UK. At the start of this year, gambling tax in the Netherlands was increased to 34.2 per cent from 30.5 per cent, and it is set to rise again to 37.8 per cent from January 1. In France, online betting duty rose on July 1 to 59.3 per cent from 54.9 per cent.

Strangely enough, neither jurisdiction was included in a chart that formed part of the Treasury committee's report showing a comparison between various countries' rates of gaming duty and the size of their legal gambling markets.

The committee's report quoted Theo Bertram of the Social Market Foundation (SMF) as saying "there is no such correlation" between higher tax rates and larger black markets, despite the examples of the Netherlands and France.

New figures have claimed France's gambling black market now outstrips the legal sectorCredit: Edward Whitaker (racingpost.com/photos)

France is unusual in that it does not have a regulated online casino sector, which would naturally boost the size of the country's black market. However, online sports betting is legal and, despite that, the AFJEL report found that the second most popular product in France's black market is sports betting.

Bertram had also urged the Treasury committee to discount the example of the Netherlands, saying the tax rises had come at the same time as a raft of regulatory changes. That is true, but it would not be a dissimilar situation to the one the gambling industry in the UK faces now.

It certainly seems odd the examples of France and the Netherlands were ignored. They were both cited in a report from the SMF this summer titled 'The Duty to Differentiate' as examples of comparable markets to the UK when it came to higher tax rates.

However, the Treasury committee appeared less willing to question the testimony from representatives of think tanks and campaigners at last month's evidence session than they were those speaking for the Betting and Gaming Council.

The report which accompanied the committee's press release last week also cited an article this year in the Harm Reduction Journal which described warnings about the threat of the gambling black market as a form of "regulatory resistance".

What the Treasury committee did not mention was that the same report said that the authors' best attempt to estimate the maximum ‘bearable’ rate of gambling taxation "produced an estimate lying around the 30 per cent threshold".

While a 30 per cent tax rate would be a considerable increase on the current rates set for machine games duty (MGD) and remote gaming duty (RGD) of 20 per cent and 21 per cent respectively, it is nowhere near the level being called for by campaigners and, apparently, the Treasury committee itself.

Indeed, the committee appears to be calling for a higher rate than even the 50 per cent on gaming duties being recommended by the think tanks and campaigners.

In its recommendations, the Treasury committee said that, in order to take into account the different harms caused by different types of gambling, the Treasury must ensure that RGD and MGD "are always set at a higher rate than gaming duty", which is the tax levied on land-based casinos.

Gaming duty has a sliding scale of between 15 per cent and 50 per cent, which would suggest the Treasury committee wants a higher rate still for RGD and MGD. That is, if it truly understands the ramifications of what it is calling for.

It might not be clear what the ramifications of this debate mean for British racing, given the committee did not call for an increase in the rate of general betting duty, under which bets on racing fall.

However, as Entain's chief financial officer and deputy chief executive Rob Wood pointed out last week, around 1,000 of Britain's 6,000 remaining betting shops "are already marginal or loss-making". A major hike in MGD is likely to result in their closure, and with them the loss of thousands of pounds in levy and media rights payments for racing.

A similar increase in RGD is also likely to result in a bout of belt-tightening at bookmakers from which racing will not be immune.

That is not scaremongering, whatever the Treasury committee might think.

BHA sets out what it wants in its new independent board members

The BHA's acting chief executive Brant Dunshea recently flagged that the governing body's hopes of having a fully independent board in place by the end of this year have faded.

However, the process has recently taken a step forward with the positions being advertised, with a closing date for applications of December 5.

The advert says that building an independent board is part of the BHA "transforming its governance arrangements", supporting its "new role in coordinating a commercial industry growth strategy, and utilising world-class business and digital skills to actively grow racing as a sport and as an industry".

Candidates would need to have a "deep passion for and knowledge of racing, and relevant industry expertise", but the BHA is also looking to add specific skills. They include understanding of the "interplay" between horseracing, sports betting and gambling, experience managing sports media rights, and experience with digital transformation.

The search would therefore appear to be targeting commercially minded candidates, rather than regulators.

BHA chair Lord Allen: looking for board members without stakeholder connectionsCredit: Edward Whitaker (racingpost.com/photos)

New BHA chair Lord Allen has made it clear he wants board members who are independent of the sport's stakeholders, and the advert sets out that the BHA board, on the recommendation of its nominations committee, "will determine whether there are relationships or circumstances which are likely to affect, or could appear to affect, a candidate’s judgement".

That may be easier said than done and will be crucial in determining whether the BHA's new-look board will truly fit the bill.

Barber's bullets

NetBet fined over AML failures

Online operator NetBet must pay £650,000 and undergo an independent audit after a Gambling Commission investigation revealed anti-money laundering and social responsibility failures.

NetBet Enterprises Limited, which runs netbet.co.uk, will pay the money as part of a settlement with the commission. The money will go to socially responsible causes.

The commission's director of enforcement John Pierce said: "This case highlights the serious consequences of failing to meet anti-money laundering and social responsibility obligations. We expect all operators to take note and ensure their systems are not only well designed but working effectively to protect consumers and to keep crime out of gambling."

Super Group 'incredibly pleased' with performance

Betway parent company Super Group recorded a 26 per cent increase in revenue to $556.9 million for the third quarter of 2025, driven by growth from the African, European and Canadian markets. Adjusted earnings increased by 65 per cent to $152.1m.

Chief executive Neal Menashe said Super Group was "incredibly pleased" with the third-quarter performance, "which highlights the continued strength of our global platform and consistent execution across our core markets". 

DraftKings set to launch prediction markets

Major US operator DraftKings said it had been hit by customer-friendly sports results as it unveiled its figures for the third quarter last week, while it also said it was set to launch prediction markets.

"This is the most bullish I have ever felt about our future,” said chief executive Jason Robins. "Underlying growth in the business is accelerating and we are excited to launch DraftKings Predictions in the coming months, which we view as a significant incremental opportunity."

It was also announced DraftKings is to become the official sportsbook and odds provider for sports media company ESPN from December 1.

Dates for the diary

Wednesday: Flutter Entertainment will release its third-quarter 2025 update after the New York Stock Exchange closes for the day.

Monday: Safer Gambling Week, a cross-industry initiative in Britain and Ireland, begins.

Read these next:

New report warns of black market risk from higher taxes and tighter regulation, industry body claims 

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

'Just allow people in. Something catches on, and there's a new thing' - the man the bookmakers depend on outlines the future of betting 

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.