UK betting operators have agreed to pay an estimated £72.9m to support British horseracing in 2013-2014 under the 52nd annual Levy scheme.
The three largest bookmakers, Hill, Ladbrokes and Gala Coral, have again committed to stump up at least £45m between them, while betting exchange Betfair will provide an estimated £7m under the terms of the commercial agreement it struck with British Racing in July.
The estimated yield of £72.9 payable in the period from 1 April 2013 to 31 March 2014 continues the 10.75% levy on the participating companies’ gross profits agreed for the 51st scheme, and represents a marginal increase on the £72.4m agreed for the current financial year.
Horserace Betting Levy Board chairman Paul Lee said the board had been “extremely pleased to have reached unanimous agreement”, adding that it would provide additional stability and allow it to allocate more than £50m to prize money in 2013-14, a 30% increase on this year’s total of £38.9m and 45% up on the £34.8m allocated in 2011.
The Levy was originally established in the 1960s as a way of compensating the British horseracing industry for the loss of attendance expected when off-course betting shops were legalised in 1961.
British Racing, consisting of the British Horseracing Authority, the Racecourse Association and the Horsemen’s Group, have however long argued that the current funding mechanism has damaging flaws, not least the voluntary regime that effectively allows bookmakers to escape paying levy on their online operations.
The BHA’s chief executive Paul Bittar today issued a statement on behalf of British Racing, said the deal provided “a platform upon which to recommence discussions on long-term, commercial funding arrangements with the major operators and beyond”, with the recent Betfair deal providing the template. Gibraltar-licensed Betfair agreed a five-year £40m deal with British Racing in July.
Bittar also reiterated British Racing’s long-held view that the “collection base [for the Levy] is far too narrow for the way in which British punters now bet”, and said they looked forward to the government’s forthcoming proposals for a “long-term, enforceable replacement for the levy.”
Conservative MP Matthew Hancock proposed closing the current loophole in his recent Offshore Gambling Bill, which would compel all operators to contribute to the Horserace Betting Levy and impose a point-of-consumption tax for online gambling. The bill gained one of just 13 coveted second reading spots in January 2013 for backbench-led legislation, but Hancock has since joined the government, leaving the status of the bill uncertain.
Article written by Stephen Carter