PREDICTIONS that a large number of British betting shops are likely to close due to tax increases is a cause for concern for Irish racing, says the Association of Irish Racecourses [AIR].

Horse Racing Ireland [HRI] has also acknowledged that shop closures will have a negative impact on media rights revenue for Irish racecourses.

In this week’s British Budget, the duty on machine games was raised from 20% to 25% by the Chancellor of the Exchequer.

While the increase is lower than the 40% which was feared – and campaigned for in some quarters – it is still expected to have a serious impact on British bookmakers and betting shops. BHA boss Grant Dunshea claimed British racing should brace itself for a £57 million hit to its finances, with reductions in prize-money, the loss of thousands of jobs and questions over the viability of racecourses.

There will also be a knock-on effect for Irish racing as fewer betting shops means less media rights revenues and almost certainly a drop in betting turnover as not all shop customers will turn to online betting.

Paul Hensey, AIR chief executive, said: “Irish racecourses’ domestic licensed betting office [LBO] media rights payments are based on the betting turnover on Irish racing, rather than on the number of LBOs.

“That said, the potential closure of betting shops in the UK due to the increase in betting tax on gambling machine profits is a concern. If more shops do close, some business may transfer to other shops or go online, but if a significant number of shops were to close you would have to expect a downturn in overall betting turnover.

“A reduction in betting turnover on Irish racing would result in reduced media rights revenue for Irish racecourses and for HRI, which would challenge the financial viability of racecourses and could have an impact on other sectors of the racing and bloodstock industry.”

HRI director Jonathan Mullin said: “Betting shop numbers do have an impact on media rights turnover for both British and Irish racing, so shop closures will have an impact on revenue for Irish racecourses and HRI.”

Following similar tax increases last year, some of the leading British bookmaker chains have cut back on racing sponsorship. Asked if he was aware of race sponsorship deals here which were affected, Mullin said: “Sponsorship and commercial arrangements will vary from company to company and racecourse to racecourse. We hope that bookmakers will maintain their longstanding and much appreciated support for Irish racing given the high profile, top quality and competitive nature of our racing product.”

”Significant damage”

The BHA says the latest tax hike for bookmakers will have a “devastating impact” on British racing.

In a post-Budget statement Grant Dunshea said: “While the government has rejected a worst-case scenario to increase Machine Games Duty to 40%, in raising the rate to 25% it will nevertheless cause significant damage to racing’s finances,” Branshea said in a statement.

“There is now a clear risk that this decision will lead to the closure of hundreds, if not thousands, of betting shops across the country.

“British racing – which derives nearly a third of its £350 million annual income from betting via high street shops – is now set to potentially lose £57 million a year, based on the independent modelling that was shared with the Treasury ahead of [the] Budget.

“While the MGD rate increase is not as severe as some called for, this change could still prove devastating for the future of our sport – impacting prize-money, the viability of racecourses, thousands of jobs; and vital horse welfare projects and research.

“Betting shop closures will also significantly impact a large part of the sport’s fanbase for whom a visit to their local bookie is the primary way they engage with horseracing.

“As the only sport in receipt of a statutory levy from the betting industry, we will seek to urgently engage with the Government to establish how we can work together to reduce the impacts of this tax policy.”

The statement concluded by saying the BHA would further analyse the Budget documents in greater detail to establish whether there are any other potential issues that may impact racing.