The World Tote Association has released a new report suggesting that betting should be taxed differently from other forms of gambling. The report states that the racing pools play a crucial role in the sustainability of the sport.
The report, authored by Martin Pubrick, is titled "Betting and Horse Racing: Taxation, Responsible Gambling, and Contributions to Society." It analyzes gambling across 77 jurisdictions, focusing on the size of each market and its social contributions.
The report notes that in Europe alone, the economic impact of the horse racing industry is estimated at 21.8 billion euros annually. The European and Mediterranean Horse Racing Federation (EMHF) reports that its members hold 28,077 races annually at 350 racecourses, supporting 155,000 jobs and generating 35 billion euros in annual betting activities.
Compared to fixed odds betting, the profits from pool betting are not based on customer losses but on the pool itself. Operators only take a commission. The report finds that the industry faces tax issues in many countries because it is taxed the same as other forms of gambling, which the report argues poses higher risks to consumers.
Pubrick claims that high taxation on betting has the opposite effect on gambling harm, as it drives more players to the unregulated gambling market, making regulated betting less competitive.
He concludes, "If horse racing is to survive as a sport, national policies must differentiate pool betting from other forms of gambling. The main recommendation of the report is that different forms of gambling should be taxed at different rates.
"In the case of betting, the tax rate should be lower to reflect the lower level of harm and the industry's contribution to horse racing and society as a whole."
Hasse Lord Skarplöth, CEO of Sweden's ATG, has been a strong advocate for differential tax rates and a vocal critic of Sweden's increased gambling taxes. He and Alex Frost, CEO of UK Tote, commented on the report together. They stated, "We hope this report provides useful information for policymakers to understand the important role Tote betting plays in supporting global horse racing.
"Members of the World Tote Association hope to work with governments, gambling regulators, and horse racing authorities to ensure that betting continues to play a constructive and increasingly important role, supporting sports and the broader society through safe, responsible, and attractive gambling activities."
