Charlie Parker: Time to reset dial on betting and levy status

The report published in October that floated the idea of raising taxes on gambling and gaming to help plug the supposed hole in the public finances was greeted with typical doom-laden rhetoric from bookmakers and racing alike. What was significant was that the ideas behind the report seemed to come as a complete surprise both to the operators and the investment community.

Online casino games and slots do not have the greatest of fan clubs, save for the operators themselves and the punters that play them, and it does not take a genius therefore to understand why the Labour party, when casting around for ways to raise cash, would focus on such a target. We will know shortly whether the tax hike ideas have found their way into the October budget or whether they could form part of the package of tax reform for March 2025. What we have seen yet again is the bookmakers trying to forge the link between racing and sports betting to online slots/ casino punting to provide a more robust argument to protect their highly profitable income stream.

For too long racing has downplayed the important distinction between a bet of skill on a horse race and a quick spin of an algorithm-generated game that guarantees the house a sizable win. During the ongoing fight against intrusive affordability checks, racing has played a significant role. Whilst this role was motivated in part by self-protection, it was bound to help other areas of the gambling industry that have much higher incidences of harmful side effects and obviously much greater returns for the operators.

There is no doubt that increasing the direct tax burden on sports betting would heap more pressure on the industry’s stretched finances. However, the debate has given racing a renewed opportunity to emphasise our points of difference and perhaps even offer a solution to our funding crisis. Racing cannot simply rely on the government to deliver the vital levy reform we narrowly missed out on in the early summer, and we also cannot realistically think that the bookmakers will voluntarily return to the negotiating table.

Sports betting generates huge profits for the bookies and allows them to cross sell other higher-margin products. Perhaps if we can really nail down the distinction between betting on racing and online slots, we can avoid the onerous tax assault and even take advantage of a levelling of the playing field.

Two years on from making the changes to the governance structure of British racing, which were designed to allow a proper strategic plan to be developed and enacted, we have struggled to make the progress so desperately needed. The two major projects, around tapping into the wider appetites for global sports investment and the identification and development of our existing consumers and engagement with the next generation, remain stubbornly on the launchpad. We seem to be making little progress against the economic and political headwinds and the industry feels like it is beginning to stagnate, or continue on the never-ending roundabout of doom, as one wag put it.

There exists a real opportunity to make decisions for the sport that can start to generate momentum, but we need to be brave enough to try things and innovate. Getting stuck in a mindset that is somehow based on protecting the future, whilst not offering anything new, will lead to stagnation and eventual decline.

Self-help initiatives should be explored, even if we are deep into the two-year trial of Premier racing. There seems to be an overarching fear that if we try something it will become entrenched, and we will not be able to reengineer the terms. This is such a short-sighted approach and one that is damaging the industry’s prospects. All stakeholders should leave their hats at the door and work together to secure the future, but I am afraid that all too often self-interest and entrenched attitudes inhibit development and stunt progress.

On a positive note, the yearling sales have been rattling along with significant investment from overseas. We have often said that we have the best horses and best courses, and we make stallions like no other jurisdiction. We have the most varied product and still retain a huge audience in terms of attendees and punters. Let’s hope that we can finally get off the roundabout and start to head for our destination.