Business · Companies · 8 hrs ago
Betting shops face possible tax rise as racing warns of lost income
Ahead of Wednesday’s UK budget, John Healey is expected to consider raising tax on high-street gaming machines.
The rate is currently 20%, and a proposed increase to 25% is less steep than an earlier recommendation to double it.
Gambling businesses say even a rise to 25% could close hundreds of shops and cut racing’s income by tens of millions of pounds.
An industry-backed estimate says a 40% rate could close up to 4,000 of the UK’s 5,500 betting shops and cost racing £92m a year.
Horse racing depends on betting shops for money from media rights and betting levies, with payments linked to how many shops operate.
The number of shops has already fallen from around 9,000 about a decade ago as gambling has moved online, while past predictions of mass closures after betting-stake limits were cut did not come true.
The budget will show whether the tax rate changes; the sources do not give a confirmed decision.
The UK government is expected to consider raising machine games duty in the budget, potentially increasing tax on profits from high-street gaming machines.
Gambling industry forecasts say a large increase could force thousands of betting shops to close and reduce income for British racing.
The Social Market Foundation recommended raising the duty rate from 20% to 40%, citing higher harm associated with machine gaming.
Rumours before the budget suggest a smaller increase, from 20% to 25%, is being considered.
The British Horseracing Authority says shop closures could affect prize money, Levy funding and equine welfare research.
- Who
- The UK government is expected to consider a machine games duty rise. Betting operators and British racing warn of its effects.
- What
- A possible tax rise on profits from high-street gaming machines could lead to betting shop closures and lost racing income.
- When
- The budget is due on Wednesday; the article was published on 26 October 2026.
- Where
- The United Kingdom.
- Why
- The Social Market Foundation recommended a higher duty rate, citing the greater harm associated with machine gaming compared with traditional betting on racing and sport.
Social Market Foundation
Gambling industry and British racing
Tax rationale
Social Market Foundation
It recommended doubling machine games duty from 20% to 40%, citing higher harm associated with machine gaming.
Gambling industry and British racing
The industry warns that a rise could close betting shops; the BHA says this would damage British racing.
Likely effects
Social Market Foundation
The article does not state the foundation’s view on shop closures or racing income.
Gambling industry and British racing
The industry says up to 4,000 shops could close and racing could lose £92m in annual income.
Racing persuaded Rachel Reeves to exempt it from a betting duty increase.
A Social Market Foundation report recommended doubling the duty rate on high-street gaming machine profits from 20% to 40%.
The British Horseracing Authority warned that a significant duty rise would have devastating consequences for British racing.
Rumours suggested John Healey was considering increasing machine games duty from 20% to 25%.
- Current duty rate
- 20%
- SMF recommendation
- Raise duty to 40%
- Possible increase
- From 20% to 25%
- UK betting shops
- Around 5,500
- Potential closures
- Up to 4,000 shops over three years, according to a Regulus Partners report cited by the industry
- Potential racing income loss
- £92m annually, according to the same report
What people are saying
This would have devastating consequences for British racing
hitting prize money, Levy funding and our ability to continue investing in our world-leading equine welfare and veterinary research projects.