British Horseracing Authority chief executive Brant Dunshea has warned the 20% rise in machine gaming duty for Britain's betting shops announced in the UK Budget on Wednesday will have “devastating impact” on the future of sport.

Chancellor John Healey announced he will increase gambling taxes to pay for a high street support package, with machine gaming duty climbing by a quarter, from 20% to 25%.

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. That in turn will mean the loss of millions of pounds in levy and media rights income for British racing.

Healey said: “To pay for this support for our high streets, I am raising taxes on gambling – by increasing Machine Games Duty from 20% to 25 per cent for higher stakes machines, while protecting pubs and seaside arcades.”

The implications of new measures, which will see tax on higher stake machines go from 20% to 25%, could inadvertently affect bookmakers’ support for racing across Britain.

Betting machines have become a fundamental operation for bookmakers but the hike in tax could result in betting shops becoming unprofitable, leading to closures due to the slimming profit margins and increasing costs.

BHA boss Grant Dunshea claimed 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 moving forward.

“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 today’s 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.

Betting industry reaction

Entain, the UK’s biggest bookmaking presence on the high street, has hit out at the government’s decision to impose further tax rises on the sector, insisting the move will cost jobs and livelihoods as well as push more people into the illegal betting market.

Stella David, chief executive for the group which has Ladbrokes, Coral and BetMGM among others in its portfolio, branded the Budget news as “another disappointing decision”.

“The previous gambling tax increases announced in November last year have already had detrimental consequences across the industry, with the effects being felt by employees, communities as well as customers," she said.

“These additional tax changes will further compound that damage and push more people into the growing illegal market.

“We will continue to work hard to limit the impact of these changes on our business, our people, and the communities in which we operate. Our priority is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets.”

Entain estimated the announcement will add £25 million to their operating costs and warned they would seek to mitigate that rise by the end of 2028 with a combination of strategies including estate rationalisation or shop closures.

The Betting and Gaming Council said it was a “deeply damaging decision” from the government, one which makes the “illegal gambling market more attractive to customers”.

A statement from chief executive Grainne Hurst read: “This is a deeply damaging decision and a blow to the thousands of workers, businesses and communities who depend on Britain’s regulated betting and gaming industry.

“The Chancellor has ignored repeated warnings about the consequences. At 25%, EY projects almost 9,000 people could lose their jobs and almost 1,000 betting shops and casinos could close or be at serious risk. These are real people and families facing the loss of their income and security, in places where alternative work can be hard to find.

“Every betting shop or casino closure means lost livelihoods, more empty premises and another huge blow to our high streets. These venues will not simply be replaced, particularly in places already struggling to attract jobs and investment.

“Higher taxes on the regulated industry also will make the illegal gambling market more attractive to customers, where operators pay no UK tax, contribute nothing to British sport and offer none of the safeguards required of licensed businesses.

“The Chancellor has chosen a tax rise that will cost British jobs, close businesses and hollow out high streets, while handing an advantage to illegal operators. The government cannot ignore the consequences of this decision.”