BGC Warns of Risks from Rising Horseracing Levy and Taxes

The Betting and Gaming Council (BGC) has voiced strong concerns about increasing financial pressure on the UK’s regulated betting industry due to rising contributions to the Horseracing Betting Levy Board (HBLB) and a potential overhaul of online sports betting taxation. With horseracing already facing significant challenges, industry leaders fear that these changes could further destabilize a sector that is struggling to remain viable.

Record levy contributions amid declining turnover

Despite a noticeable decline in horseracing betting turnover, the BGC’s members—comprising the UK's largest and most responsible betting operators—are projected to contribute a record £108 million in levy payments to the HBLB in 2024. This represents a steady annual increase, following contributions of £97 million in 2021/22, £100 million in 2022/23, and £105 million in 2023/24. The continued rise has prompted the BGC to question the sustainability of this model.

This increase in financial obligation is occurring even as betting turnover per race has fallen significantly. The HBLB reports that turnover per race declined by 8% compared to the previous year. Even more concerning is the longer-term trend: turnover is down 15% compared to 2022/23 and a stark 19% compared to the 2021/22 period.

These figures indicate that while the regulated betting sector continues to provide essential financial support to horseracing, the overall interest in betting on the sport is waning—raising questions about how long such contributions can be maintained.

Potential changes to online betting taxation

In addition to the increasing levy payments, the government is also considering changes to how online sports betting is taxed. Currently, operators pay different rates depending on the nature of the bets and platforms used. However, a new proposal aims to introduce a flat, single rate of taxation for all forms of online sports betting.

BGC leadership warns that such a move would not only add an additional financial burden to an already heavily regulated sector but could also deter players, ultimately harming both the betting industry and the sport of horseracing itself.

Industry voices growing concern

Grainne Hurst, Chief Executive Officer of the BGC, emphasized the gravity of the situation in a recent statement:

“For the fourth year running, levy contributions have increased to record levels, demonstrating the growing, long-term investment regulated betting provides British horseracing. But it is concerning to see once more that despite record levy contributions, racing continues to struggle, both as a sport and as a betting product, with betting turnover down again year on year.”

Hurst’s statement underscores a fundamental contradiction: the regulated betting sector is increasing its financial support for horseracing, yet the sport continues to see declines in engagement and revenue.

How the levy supports British horseracing

The Horseracing Betting Levy was established to provide a funding mechanism for British horseracing by ensuring that betting operators contribute a portion of their profits to the sport. The levy provides vital funding for key aspects of the horseracing industry, including prize money, integrity oversight, breeding programs, veterinary support, and other core components that keep the sport functioning smoothly.

Currently, the levy applies only to horseracing and not to other forms of racing such as greyhound racing, where contributions remain voluntary. Mark Bird, Chief Executive of the Greyhound Board of Great Britain, recently explored the impact of varying funding structures. The BGC has often pointed to this disparity to highlight the unique pressure placed on operators involved in horseracing.

A fragile ecosystem under threat

Horseracing holds a longstanding place in British heritage and rural life, contributing approximately £4 billion each year to the UK economy. The sport supports tens of thousands of jobs in stables, training facilities, racecourses, hospitality, and media.

The BGC argues that regulated betting companies play a crucial role in this ecosystem. They not only provide financial support through levy and tax contributions but also sponsor races, promote events, and help maintain public interest in the sport.

Hurst highlighted this symbiotic relationship:

“BGC members remain committed fans of racing and recognise better than most the huge economic impact it makes in communities across the country.”

But with declining betting turnover and mounting financial obligations, the industry’s ability to support horseracing at current levels is in doubt.

Risks of driving bettors to the black market

One of the BGC’s most pressing concerns is the potential rise of the unregulated, offshore gambling market if the financial pressure on regulated operators becomes too great. According to the Council, new tax burdens—such as a single online sports betting tax—could push customers toward illegal sites that do not pay taxes, contribute to the levy, or follow responsible gambling standards.

“It’s now more important than ever this vital contribution is not undermined by further new tax rises through the creation of a single tax for online betting, which risks driving punters away from the sport, or into the arms of the growing, unsafe gambling black market,” said Hurst.

Operators in the black market do not invest in British sports, do not provide safer gambling tools, and are not accountable to UK regulators. As such, any growth in this sector could erode the financial and ethical foundation of the UK gambling industry and horseracing alike.

Calls for a sustainable approach

The BGC is calling on policymakers to work collaboratively with the industry to ensure that any reforms to taxation or levy structures support long-term sustainability. The Council is not opposing regulation or taxation but is instead advocating for a balanced approach that allows operators to remain competitive while continuing to fund British sport.

The industry stresses the need for evidence-based policy decisions that recognize the interconnectedness of regulated betting and horseracing. Without this understanding, there is a risk that overregulation and increased financial burdens could damage both sectors irreparably.

Looking forward

The future of British horseracing is closely tied to the health of the regulated betting sector. As policymakers evaluate proposals for tax reforms and other regulatory changes, they must consider the broader implications for employment, economic contributions, and the vitality of one of the UK’s most historic sports.

The BGC continues to urge the government to maintain a regulatory environment that supports growth, encourages investment, and protects consumers—while ensuring horseracing remains viable for generations to come.

Conclusion

The Betting and Gaming Council's concerns over rising levy payments and proposed changes to online sports betting taxes highlight the delicate balance between supporting British horseracing and maintaining a sustainable and competitive betting industry. While the BGC acknowledges the importance of funding horseracing, the continued increase in levy contributions—set against a backdrop of declining betting turnover—raises valid questions about the long-term viability of this financial model.

Moreover, the introduction of a single tax for online sports betting could further strain operators, potentially driving bettors towards unregulated markets that neither support horseracing nor adhere to responsible gambling standards. The BGC’s call for evidence-based policy decisions is an urgent reminder that a sustainable future for horseracing depends on a fair and balanced approach to regulation.

As the debate continues, it is crucial for policymakers to consider the broader implications for the UK’s betting and sports industries. Without a holistic understanding of the economic, social, and cultural value of both sectors, there is a real risk that well-intentioned reforms could unintentionally harm one of Britain’s most iconic sports. Ultimately, the goal should be to create a regulatory environment that supports both the growth of betting operators and the continued success of British horseracing, ensuring their mutual survival and prosperity for years to come.

FAQs

What is the Horseracing Betting Levy?
The Horseracing Betting Levy is a statutory payment that betting operators must make to support the UK’s horseracing industry.

Why is the BGC concerned about the levy increase?
The BGC is concerned that rising levy payments are unsustainable, especially as betting turnover continues to decline year-on-year.

How much is the current levy contribution?
In 2024, BGC members are expected to contribute £108 million to the Horseracing Betting Levy Board—a record high.

Why is betting turnover on horseracing declining?
Several factors, including changing consumer preferences and increased competition from other sports and entertainment options, have contributed to the decline.

What is the proposed change in betting taxes?
The UK government is considering introducing a single tax rate for online sports betting, replacing the current structure with a uniform system.

Why does the BGC oppose a single online betting tax?
The BGC believes it would increase the tax burden on operators, reduce consumer choice, and potentially drive bettors to unregulated markets.

Do greyhound racing operators pay a similar levy?
No, contributions to greyhound racing are voluntary, unlike horseracing, which is funded through a mandatory levy.

What is the risk of players moving to the black market?
If regulated betting becomes less attractive due to higher taxes and levies, players may turn to illegal offshore operators who don’t follow UK laws.

How does the betting industry support horseracing?
Through levy payments, sponsorships, media deals, and promoting the sport, the betting industry provides critical funding for British horseracing.

What does the BGC want from the government?
The BGC seeks a fair and sustainable regulatory framework that allows betting firms to support horseracing without compromising their financial viability.