Betfair has agreed to pay at least £40m to British Racing over five years under a landmark deal with the British Horseracing Authority (BHA), the Racecourse Association and the Horsemen’s Group.
Betfair, that generated 42.5% of its sports revenue from horse racing in the last financial year, will pay 10.75% of all revenues on the sport generated by its UK customers as well as “substantial guaranteed minimum payments”, a deal the operator said reflected “both parties’ confidence in the strength and growth potential of British Racing.”
The commercial agreement replaces Betfair’s current voluntary contribution to the annual Horserace Betting Levy. The £6.5m Betfair has already paid under the 51st levy scheme covering the period from 1 April to the end of March next year will be offset against the payments due under the new commercial agreement. Betfair added that British Racing has in return committed to a minimum number of fixtures per year, with its betting data used to develop a fixture list aimed at maximising the attractiveness of British racing to all stakeholders.
Betfair said that with the government looking at reforming or replacing the levy, its agreement could be just the first of many individual deals between UK betting operators and British Horseracing. The BHA has also withdrawn from the action against the Levy board over its decision not to impose the levy on business users of betting exchanges, leaving William Hill to fight on alone in this week’s Judicial Review in the High Court.
The operator’s chief legal and regulatory officer Martin Cruddace called the agreement “a genuinely historic moment”. He added: “For the first time, British Racing and Betfair have proved it is possible for us to work together on a truly commercial basis. Of course it has not been easy but the end result completely justifies all the hard work. We hope that this marks a new era and call on other betting operators to adopt similar agreements to help ensure a strong, healthy and vibrant horseracing industry in this country.”
BHA chief Paul Bittar said the his organisation and the Jockey Club were “delighted” to have been able to reach an agreement with Betfair.. “It brings many benefits, including substantial and increased guaranteed funding as well as importantly providing certainty for the sport in relation to Betfair’s contribution. We hope that similar arrangements with other betting operators will follow.”
Bittar also welcomed the government’s commitment to “address the long-standing and damaging flaws in our current funding mechanism”, a process he said the BHA continued to engage in. Up to 60,000 people in the UK are reliant on funding through the Horserace Betting Levy, on which the gambling industry is still working with the UK horse racing authorities towards inking a long-term deal, rather than negotiating right up to the deadline every year.
Bookmakers agreed last year under the terms of the 51st annual levy scheme to pay £72.4m to UK horse racing in the financial year starting 1st April 2012, with William Hill, Ladbrokes and Coral committed to £45m between them and Betfair, whose exchange-based business model falls outside the current remit of the levy, volunteering to provide £6.5m.