A new survey reveals that nearly two-thirds of British punters would resort to black market betting sites if the government were to increase the tax rate on horse racing bets or sports betting more broadly. This finding emerges as Ministers continue to consult on a significant overhaul of online gambling taxation, triggering fears that the cost of betting on popular sports like horse racing and football will become more expensive for consumers.

Currently, sports betting and online gaming are taxed at differing rates in the UK. However, the government is exploring a proposal to introduce a single new tax rate for all remote gambling activities. The sector has consistently warned against introducing a unified tax at a higher rate.

A survey conducted by the Betting and Gaming Council (BGC) found that 65% of regular punters would opt to use unregulated sites, where no tax is paid, if faced with a tax increase on betting. This concern is underscored by a recent study that estimated 1.5 million British citizens wager more than £4 billion on the betting black market every year, a practice that directly impacts the already fragile horse racing industry.

The Treasury, for its part, insists that the plans are primarily aimed at cutting bureaucracy and simplifying the tax system, rather than hiking or lowering existing tax rates.

Grainne Hurst, CEO of the Betting and Gaming Council, has issued a strong warning in response to the survey findings. She stated that this “shocking statistic proves what’s at stake if the Government forces through a self-defeating tax hike on ordinary punters.” Hurst asserted that such a move would “not raise more tax,” but instead “risks forcing huge numbers of customers out of the regulated market, with its world leading standards on player safety, into the arms of the growing, illegal, unregulated and unsafe gambling black market online.”

Hurst further warned that any tax rises would “make a mockery of the Government’s growth strategy and be catastrophic for horseracing,” which is already facing a bleak financial outlook. She described the survey results as a “wake-up call for Government,” stating that punters have been “loud and clear: hit them with further taxes and they will walk away from sports like racing, straight to the black market, triggering a spiral of decline.”

The BGC has consistently highlighted that regulated betting provides significant, long-term investment to British horseracing, with contributions having increased to record levels for the past four years. However, concerns remain that despite these rising contributions, racing continues to struggle, with betting turnover consistently down year-on-year. The BGC argues that any new taxes would halt investment, hurt punters, and ultimately harm racing, while directly boosting the black market, which pays no tax, offers no safer gambling protections, and contributes nothing to the sport or the levy. The Treasury consultation on the Remote Betting & Gaming Duty (RBGD) is open until July 21, 2025, with the new rate to be determined as part of a future budget process, potentially effective by October 2027.