Strike action planned over France’s horse racing tax increase

Garance Limouzy October 30, 2024
Strike action planned over France’s horse racing tax increase

The French government’s plan to increase taxes on horse race betting has encountered resistance from stakeholders who fear the impact on the sector’s financial viability. The proposal revives and intensifies previous debates about gambling revenue taxation, raising concerns within the horse racing sector. It also reflects the government’s changing position on broader gambling issues, including the recently halted legalisation of online casinos.

Rising taxes for a rapidly growing market

The French government’s proposal, reintroduced on 28 October 2024, seeks to adjust taxes on both online and retail betting. The amendment—part of the Social Security Finance Bill for 2025—proposes raising taxes on gross gambling revenue (GGR) for pari-mutuel horse racing bets from 6.9 percent to 7.5 percent for physical venues, including racecourses and PMU betting outlets, and a sharp increase to 15 percent for online bets. In addition to affecting horse racing, the amendment introduces higher taxes on gambling advertisements and promotions, with a projected revenue increase of €200 million for public health and social welfare programmes, according to government estimates.

This push for increased taxation is linked to the gambling industry’s record growth in France. In 2023, gambling generated €13.4 billion in GGR, a 3.5 percent increase from the previous year. Online gambling, which now constitutes approximately 17.5 percent of the overall market, was particularly strong, with GGR reaching €2.3 billion, a 7.2 percent growth rate. According to Budget Minister Laurent Saint-Martin, the tax adjustment aims to address this “dynamic sector” while balancing public health concerns, particularly around gambling addiction.

Industry outcry and planned protests

The reaction from France’s horse racing industry was swift and heated. On 7 November, jockeys, trainers, and industry employees plan to mobilise nationwide to protest the tax hike. Stéphane Meunier, president of the Trot Trainers and Jockeys Association, stressed the industry’s resolve to demonstrate across Paris and other major cities. “This will be a day without races, a stand against a tax policy that threatens our existence,” Meunier declared.

Horse racing professionals argue that this increased tax burden would devastate an already fragile sector, potentially resulting in job losses among the industry’s 29,000 employees. “Our sector is not like typical gambling,” explained Pierre Préaud, General Secretary of the FNCH (National Federation of Horse Racing). He noted, “We don’t have shareholders to satisfy; instead, our focus is on supporting local agriculture and rural employment, reinvesting in horse breeding, and nurturing regional communities.” The FNCH reports that in 2023, horse racing contributed €830 million to public finances, including €138 million in social contributions.

The distinctiveness of the horse racing sector

The industry maintains that it provides a unique public service, which distinguishes it from other types of gambling in France, such as sports betting or casino games. Unlike other sectors, horse racing allegedly supports the agricultural economy and contributes to rural development, creating a “win-win” relationship with the government, according to Préaud. As part of this unique relationship, horse racing has traditionally benefited from a lower tax rate. Removing this tax relief, stakeholders argue, could ultimately reduce government revenue as well.

This sentiment is echoed in a joint statement from major industry associations, including France Galop, SETF (Society for the Encouragement of French Trotters), and the FNCH. The associations’ statement criticised the amendment as “detached from the reality of pari-mutuel betting,” which they stress is intertwined with France’s agricultural industry. “Increasing taxes here means less revenue for farmers and rural employment,” they stated, warning that declining revenue could lead to “a mechanical drop in activity and consequent job cuts.”

The outcome of the protest on 7 November could influence the amendment’s future. Industry leaders are hopeful that visible opposition will prompt the government to reconsider. In addition, the sector hopes to gain support from rural mayors, as Meunier noted, who benefit economically from the local racecourses in their towns.

A controversial sector

Horse racing remains a controversial practice in France due to ongoing concerns about animal welfare and potential abuse. Recent years have exposed grim realities within the sport, as it was revealed that 135 horses died during races in France in 2019 alone.

The recent death of the horse Haya Zark at the prestigious Prix de l’Arc de Triomphe in October 2024 has reignited the debate surrounding horse racing. This incident, along with the euthanasia of another horse at Longchamp just months earlier, has sparked serious public concern in France about the treatment of racehorses. One trainer compared horse racing to race cars to justify the decision to euthanise horses after non-life-threatening accidents, stating, “It’s like a car. I am the driver, but if there is an accident and the tires need to be changed, it’s the owner who decides.” As discussions about horse welfare continue to grow more intense, the racing industry faces increasing pressure to address these ethical concerns.

Postponed legalisation of online casinos

This new amendment arrives on the heels of another gambling-related policy debate in France: the postponed legalisation of online casinos. After proposing a pathway for online casino gaming just weeks ago, the French government faced an immediate and fierce backlash from brick-and-mortar casino operators, public officials, and addiction advocacy groups. On 27 October, Minister Saint-Martin announced the withdrawal of the proposal, citing the need for broader consultation with affected parties.

The proposed online casino legalisation, initially put forward on 19 October, would have allowed popular games such as roulette and blackjack to be offered online. With black-market online gambling estimated to generate up to €1.5 billion annually, proponents argued that legalisation could curb illicit gambling activity and generate nearly €1 billion in tax revenue per year.

Public health considerations

Beyond economic arguments, the French government’s decision to intensify tax scrutiny on gambling aligns with its stated commitment to public health. The Federation Addiction, representing addiction specialists across France, recently voiced strong opposition to online casino legalisation, citing the risks of gambling addiction due to rapid gameplay and high-stakes bets.

The government echoed these concerns in its rationale for the horse race betting tax, arguing that the rapid growth of gambling, particularly online, carries public health risks. “This amendment seeks to improve the fairness of our tax system while curbing gambling addiction,” a government spokesperson commented.

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