Betfred drops the Classics after machine duty rise

• Betfred will not take up a three-year renewal of its title sponsorship of all five British Classics.
• The bookmaker cites successive tax rises, in particular the latest increase in Machine Games Duty.
• The Jockey Club is already in talks with prospective partners for the Derby and the Guineas Festival.

Betfred will not renew its sponsorship of the five British Classics, bringing to an end the deal that made it the first brand to back the Derby, Oaks, St Leger and both Guineas at once.

The bookmaker confirmed on 5 November that it would not proceed with a three-year renewal, citing successive tax rises and, in particular, the latest increase in Machine Games Duty (MGD).

Done’s ultimatum

Betfred had made its position clear well before the Budget. In September, founder Fred Done used The Sunday Times to warn that Betfred would walk away from a verbal agreement to extend the Classics deals if MGD rose.

At the time, reports pointed to a possible doubling of the standard rate to 40%. Done also confirmed that Betfred would not renew its Super League sponsorship, which it had held since 2017.

The industry then pushed back together. In a Betting and Gaming Council letter published on 14 October, the chief executives of Entain, evoke, Flutter UK & Ireland, bet365, Bally’s and Betfred asked Chancellor John Healey to rule out an MGD rise. Two weeks later, his Budget included one.

A Betfred spokesperson said:

“It is not a decision we wanted to make, but the cumulative cost of government policy has left us with no choice.”

Healey’s five points

The 28 October Budget raised MGD from 20% to 25% on higher-stakes machines. From 1 April 2027, the new rate applies to machine games with stakes above £1 or prizes over £100, according to the HMRC policy paper. Lower-stake machines keep their current rates.

A separate consultation proposes moving liability for the duty to suppliers from April 2028. It covers supplier-owned machines operated under profit-share arrangements.

The Treasury is using the extra revenue to fund business rates relief for retail, hospitality and leisure. John Healey, Chancellor of the Exchequer, said:

“To pay for this support for our high streets, I’m raising taxes on gambling by increasing Machine Games Duty from 20% to 25% for higher stakes machines, whilst protecting pubs and seaside arcades.”

The industry had expected a much bigger rise. The Social Market Foundation had called for MGD on Category B machines to double to 40%, and 90 Labour MPs wrote to Healey in October in support of a higher rate.

Even at 25%, operators with large shop estates face a significant bill. Entain told the London Stock Exchange on Budget day that it expects the change to add around £25m a year to its retail costs.

Two Budgets, one bill

Betfred’s statement blames the cumulative cost of policy, not any single measure. The November 2025 Budget under Rachel Reeves raised Remote Gaming Duty from 21% to 40%, effective from April 2026.

Remote General Betting Duty rises from 15% to 25% on 1 April 2027, the same day the new MGD rate takes effect. Retail betting is excluded from that increase.

Shop estates are already shrinking. Betfred began consulting on the closure of 132 shops in July, with more than 600 jobs at risk. In September, Flutter confirmed that up to 100 Paddy Power shops in the UK and Ireland were under review.

A thinning purse

Racing has been losing bookmaker money all year. A Racing Post analysis published on 6 October found that bookmaker sponsorship of British racing fell 17% year on year between 1 January and 28 September 2026.

The decline sped up after the 40% online rate took effect in April, averaging 8.8% a month. All-weather racing has been hit hardest: 58.2% of 2026 races carried bookmaker sponsorship, down from 73.3% in 2025.

Prize money has fallen with it. Purses for bookmaker-sponsored races dropped 2.5%, or 5.5% in real terms. Other sponsors have not made up the difference: races with no sponsor or a contra deal rose 16%, and private and other commercial sponsorship grew just 3%.

The same analysis found that bet365, Betfred and Flutter each cut their racing sponsorship spend by more than 15%.

Betfred’s exit follows other big withdrawals. Coral ended its Cheltenham Festival sponsorship after more than five decades, and bet365 dropped its Newmarket and Haydock deals in March. Operators have also been shifting marketing spend from racing towards football.

Epsom needs a name

Betfred took on the Derby, Oaks and St Leger in 2023. It added the 2,000 Guineas and 1,000 Guineas at Newmarket from 2025, giving Done the full set of Classics he had long wanted.

The deal included a £2m Triple Crown bonus for any horse that won the 2,000 Guineas, Derby and St Leger in the same season.

The Jockey Club owns Epsom and Newmarket, and Arena Racing Company runs Doncaster. City AM reported that the Jockey Club’s Amy Starkey said the organisation was disappointed but understood Betfred’s decision.

She added that talks with potential partners for the Derby and the Guineas Festival are under way. No new title sponsor has been announced for any of the five races.

The money question

A replacement on Betfred’s scale may be difficult to find. The operators that would normally bid for a package of this size are cutting costs themselves, from shop closures to proposals for up to 1,400 redundancies at Flutter UK & Ireland.

That could push racecourses towards sponsors outside gambling. Qatar’s Qipco sponsored the Guineas from 2011 until 2024, and its exit is what let Betfred in. A non-gambling partner would carry no exposure to UK gambling duties.

Done and his brother Peter Done were named the UK’s biggest taxpayers in the Sunday Times Tax List earlier this year. In comments to the Financial Times reported by City AM, Done said closing shops would not stop people betting but would mean less tax and less money for racing.

Higher MGD and remote betting duty both take effect on 1 April 2027. The racecourses need a new sponsor for the Derby, and they are looking just as more bookmakers are pulling back from the sport.