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The newly approved 2025 Budget from the UK government delivered sweeping tax reforms across the gambling industry, with one notable exception: horseracing. While online casino games, remote betting, and most forms of online gambling are set to face sharp increases, betting on British horse races will remain subject to the existing tax rates.
In the Budget announced by Chancellor Rachel Reeves on 26 November 2025, key changes were approved that will reshape the online gambling landscape. Remote Gaming Duty, the tax on online casino games and other games of chance, will jump from 21% to 40%, effective from April 2026.
Meanwhile, remote sports betting (excluding horse racing) will see its General Betting Duty rise from 15% to 25% starting April 2027.
In contrast, for bets on horseracing, both online and in-person, the tax rate will remain at 15%, the same rate as before the Budget. Bingo duty, meanwhile, will be abolished entirely.
Why Horseracing Was Exempted: Cultural, Economic, and Political Reasons
Horseracing’s exemption from the new tax hikes was not an accident. The sport, long considered a cultural staple, especially in many rural and regional communities, had assembled broad support to resist what would have been a “harmonized” remote-gambling tax regime.
Under previous proposals, remote bets on horseracing could have been taxed at the same high rates as online casino games, which many in the industry argued would threaten the viability of the sport.
The decision appears to acknowledge horseracing’s unique status among gambling activities. The British Horseracing Authority (BHA) welcomed the outcome, calling the exemption a “significant” win for a sport that supports tens of thousands of jobs and contributes an estimated £4 billion a year to the UK economy.
For many racing stakeholders, the decision protects not just their livelihood but the broader racing ecosystem: racecourses, trainers, breeding farms, rural communities, and the associated hospitality and tourism industries.
The Broader Landscape: What Tax Hikes Mean for the Gambling Sector
For the broader gambling industry, especially online operators and remote bettors, the Budget marks the beginning of a new era. The jump in Remote Gaming Duty to 40 % represents almost a doubling of the tax on online casinos, slots, and other gaming services.
The rise in remote betting duty (excluding horseracing) to 25 % from 2027 reflects growing government concern over the social harms associated with easy-access online gambling. The government has justified these increases as necessary to raise revenue and address gambling-related risks for public health and financial sustainability.
Estimates suggest that once fully implemented, the changes could raise more than £1.1 billion per year by 2029–30.
The impact on operators is expected to be substantial: higher costs for online gambling providers will likely trickle down to consumers—via reduced bonuses, less favorable odds, or stricter risk controls. Meanwhile, betting shops and land-based venues may initially avoid the worst of the changes, since in-person betting and machine-gaming duties remain largely unchanged.
For Horseracing: A Reprieve, but Future Uncertain
For horseracing, the exemption is a momentary reprieve and a major win. Many in the industry had warned that higher tax rates on horserace betting could lead to job losses, reduced prize money, and a shrinking sport. The decision preserves the status quo.
Yet, the relief may be tempered. Even though betting duty remains at 15 %, the wider financial pressure across the gambling and entertainment industries could indirectly affect horseracing. As online casinos and sportsbook operators brace for higher costs, some may cut back on promotional budgets or sponsorships, potentially limiting ancillary funding to the sport.
Analysts also caution that an increase in unregulated offshore gambling could draw away customers.
Horseracing also remains vulnerable to broader regulatory and economic pressures. There is no guarantee that future Budgets won’t revisit duty levels or seek other ways to tax or regulate the sport more heavily—something stakeholders remain vigilant about.
What This All Means Going Forward
With the Budget changes now law (once the relevant legislation passes), the UK gambling sector enters a new phase. Online gaming and remote betting (excluding horseracing) will become significantly more costly, altering operator strategies, user behavior, and potentially reducing the growth rate of gambling-related services.
Horseracing, meanwhile, emerges, for now, as a protected corner of a changing industry. Its exemption from duty rises offers stability, which the BHA and associated stakeholders hope will help preserve the sport’s economic and cultural footprint.
Still, this outcome could come with trade-offs. As remote gambling becomes more expensive for operators and punters, the financial ecosystem supporting racetracks, sponsorship, hospitality and rural employment may face indirect strain.
In short: the 2025 Budget has reshaped the playing field—with winners and losers. For horseracing, the results represent a welcome reprieve. For many other corners of the gambling world, the next few years will likely bring higher costs, tougher choices, and possibly slower growth.
SOURCE: BBC
