Budget Lifts Betting-Shop Machine Duty to 25%, and Racing Warns of Closures

Betting shops across Britain now face a higher tax on profits from fixed-odds gaming machines. In his first budget as chancellor, John Healey raised machine games duty from 20% to 25%. Horseracing says the change could be serious for the sport, even though the increase is well short of the doubling to 40% that the Social Market Foundation thinktank had recommended.

Brant Dunshea, chief executive of the British Horseracing Authority, said the sport would "urgently engage with the government" to reduce the impact. He warned of a "clear risk" that "hundreds, if not thousands" of betting shops could close. Shops provide nearly a third of racing's £350m annual income, and he said the sport could lose £57m a year on the basis of modelling the BHA says it shared with the Treasury before the budget. That modelling is not in the reporting we have seen, so the £57m figure is the BHA's claim, not an independently checked number.

Dunshea listed what could suffer: prize money, racecourse viability, thousands of jobs and horse welfare projects. He also said shops are how many fans engage with the sport day to day, so closures would hit the audience as well as the revenue. Each shop, he said, contributes about £25,000 a year through the levy and rights payments for live coverage and data.

Gideon Salutin, co-author of the Social Market Foundation report, said the group was "pleased" the rate had risen, reflecting the higher harm linked to this form of gambling, but called the rise "relatively limited" and remained "sceptical that such a small rise will have a significant impact on industry behaviour". The tension is clear: the health case argues for a larger increase, while the racing case warns that even this one could shut shops. The budget chose a middle figure.

Market reaction points the same way. Entain, owner of Ladbrokes and Coral, rose 8% shortly after the announcement, and Evoke, which owns William Hill, rose 3.5%. That is an analytical reading that investors saw the rise as less damaging than feared, not a verdict on the policy. The open question is whether shops will close at the scale the BHA fears or at a smaller scale, and who would bear the cost if they do: shop staff, racecourses, and the smaller racing charities that depend on levy money.