BHA warns UK machine-duty rise could cost British racing £57 million a year

British horseracing could lose £57 million (A$107.6 million) a year as higher gambling taxes threaten the viability of betting shops, with the sport’s governing body warning of consequences for prize money, racecourses, jobs and horse welfare.

The British Horseracing Authority (BHA) said the UK Government’s decision this week to increase Machine Games Duty (MGD) from 20 to 25 per cent risked closing hundreds, potentially thousands, of shops that provide a substantial share of racing’s betting income.

BHA chief executive Brant Dunshea said the government had rejected a worst-case proposal to lift the rate to 40 per cent, but the smaller increase would nevertheless cause significant damage to racing’s finances.

“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,” Dunshea said after Wednesday’s Budget.

According to the BHA, British racing derives nearly one-third of its £350 million (A$661 million) annual income from betting through high-street shops. Independent modelling shared with the Treasury before the Budget put the potential annual loss at £57 million (A$107.6 million).

Separate work undertaken for the Betting and Gaming Council estimated lost levy and media-rights payments at £15 million (A$28.3 million).

“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,” Dunshea said.

He warned that shop closures would also affect racing followers whose principal connection with the sport was through their local bookmaker.

The BHA said it would urgently engage with the government about reducing the policy’s impact, noting that horseracing is the only sport receiving a statutory levy from the betting industry. It will also examine the Budget documents for other measures affecting racing.

Chancellor John Healey’s increase applies from April 1, 2027 to gross gaming revenue from type 2 gaming machines in betting shops.

Entain, which owns Ladbrokes and Neds in Australia and operates TAB NZ, estimates an additional annualised cost of approximately £25 million (A$47.2 million) to its UK and Ireland retail business before mitigation.

The company expects to offset the increase fully by the end of 2028 through estate rationalisation, group-wide optimisation and potential market-share gains, including recapturing customers as competitors reconsider their UK presence.

Entain chief executive Stella David said the latest increase compounded pressures created by the November 2025 gambling tax changes.

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

“Our priority is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets.”

Entain had estimated that the earlier tax changes would add £200 million (A$377.7 million) a year to its UK and Ireland online costs before mitigation. It has since cut 500 jobs and proposed removing a further 400 customer-care roles.

Despite the additional retail tax burden, Entain said its FY26 guidance and expectation of generating £500 million (A$944.3 million) in annual adjusted cashflow in 2028 remained unchanged.