Brant Dunshea, the chief executive of the British Horseracing Authority, said on Wednesday that the sport’s ruling body will “urgently engage with the government to establish how we can work together to reduce the impact” after John Healey, the chancellor, raised the duty on the profits from fixed-odds gaming machines in betting shops from 20% to 25% in his first budget.

The widely anticipated rise in Machine Games Duty (MGD) was well below the doubling of the rate, from 20% to 40%, recommended by the Social Market Foundation think-tank earlier this year, but Dunshea warned that the move could “still prove devastating for our sport” since it presented a “clear risk” that “hundreds, if not thousands” of betting shops nationwide face closure as a result.

There are currently around 5,500 betting shops in the UK, and the average shop contributes approximately £25k to racing annually via the Levy and rights payments for live coverage and data.

“British racing derives nearly a third of its £350m annual income from betting via high street shops,” Dunshea said, “[and] is now set to potentially lose £57m a year, based on independent modelling that was shared with the Treasury ahead of today’s Budget.

“While the MGD rate increase is not as severe as some called for, this change could still prove devastating for the future of our sport, impacting prize money, the viability of racecourses, thousands of jobs and vital horse welfare projects and research.

“[Closures] will also significantly impact a large part of the sport’s fanbase for whom a visit to their local bookie is the primary way they engage with horse racing.”

Gideon Salutin, the co-author of the report by the Social Market Foundation that called for a much bigger rise in MGD, said on Wednesday that while the organisation was “pleased” that MGD had been raised, “reflecting the higher harm associated with this form of gambling”, the rise was also “relatively limited”. The SMF, Salutin added, remains “sceptical that such a small rise will have a significant impact on industry behaviour.”

The share price of several major high-street gambling businesses rose following Wednesday’s budget speech. Shares in Entain, the owner of Ladbrokes and Coral, were up 8% shortly after Healey’s announcement while share in Evoke, which owns William Hill, rose by 3.5%.