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The British horse racing industry looks set to avoid new taxes under Chancellor Rachel Reeves’ November Budget. Treasury insiders say a £1-billion plan will increase levies on online gaming and betting machines but keep horse racing’s current structure in place.
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The Treasury aims to focus on digital betting, not traditional racing. While this decision has calmed fears within the racing community, the broader gambling sector is bracing for substantial changes to the UK’s tax framework.
Treasury officials have reportedly ruled out any new levies on horse racing, viewing it as part of Britain’s cultural fabric. On-course betting will remain mostly untaxed, while the Remote Gaming Duty and Machine Games Duty are expected to jump from their current 21% and 20% rates.
“The focus is on online casinos and machine betting, not on traditional racing,” a Treasury insider said, adding that the plan reflects the “social risk gap” between online gambling and live sports betting.
Industry analysts say this split approach acknowledges horse racing’s fragile finances. Many bookmakers fund prize pools and sponsorships through their digital revenues, meaning higher online taxes could still indirectly strain the sport.
The Betting and Gaming Council (BGC) quickly warned against sharp tax hikes, saying they could backfire by pushing players to unregulated markets. CEO Grainne Hurst cautioned that higher rates could drive customers “towards the unsafe, unregulated black market.”
Not everyone agrees. Former Paddy Power co-founder Stewart Kenny argued that higher duties on online gaming are justified. He believes such taxes target the sectors with the greatest risk of social harm while sparing traditional sports.
Meanwhile, jockeys and trainers have voiced long-standing concerns about the sport’s sustainability. Jockey Kieran Shoemark said added financial pressure could make it “impossible to survive.”
Rachel Reeves is also under pressure from within her own party. Over 100 Labour MPs have signed a petition urging her to raise gambling taxes by £3 billion to end the two-child benefit cap.
The campaign, backed by former prime minister Gordon Brown, argues that removing the cap could lift nearly 500,000 children out of poverty. But the Institute for Public Policy Research estimates it would cost £3.5 billion per year — a heavy lift given Reeves’ £20 billion fiscal gap.
Some Labour members support even bolder measures, including a 50% tax on online gambling. Brown and other senior figures call it a “socially responsible” way to fund child welfare without overburdening traditional sectors like horse racing.
Beyond this year’s Budget, the government is reviewing how gambling taxes are structured overall. Officials are exploring a plan to merge several duties by 2027, aiming for a simpler and more transparent system.
Think tanks such as the Social Media Foundation support this modernization but urge selective increases instead of blanket hikes. They recommend that online slots face the steepest taxes, while industries with economic and cultural value — like horse racing — continue to receive protection.
The Treasury views racing as a traditional sport with strong economic and cultural roots, unlike online betting, which has grown rapidly and poses more social risks.
The Remote Gaming Duty could rise to 40%, nearly doubling its current rate of 21%, while Machine Games Duty may also see sharp increases.
Yes. Bookmakers fund much of racing’s prize money through digital profits, so higher taxes on that side could reduce their contributions.
The government is considering merging all gambling duties into a single modernized system, simplifying oversight and ensuring fairer tax distribution.