British Racing groups join to tackle bookmaker levy decline

Led by the British Horseracing Authority (BHA), Britain’s largest racecourse governance groups have joined forces to tackle the issue of ‘underfunding and loopholes’ in the levy system. The joint stakeholders will move to bar bookmakers’ from sponsoring race events, tracks and festivals if they do not pay levy contributions through their online operations.

The proposed levy initiative is supported by UK racing governing bodies , the Racecourse Association (RCA) and the Horsemen’s Group. The combined organisations will seek to establish sustainable provisions for the transferring of funds between bookmakers’ digital operations and the racing industry.

Race operators, Arena Racing Group (ARC) and The Jockey Club who currently operate 60% of UK meets, have supported the initiative by agreeing not to partner with bookmakers who do not fulfil their levy criteria.

Detailing the necessity of its actions, the BHA estimates that British Racing is losing out on £30 million per year in equivalent levy payments. Furthermore bookmaker contributions to racing are set to drop from £105 million in 2004/05 to £53 million by 2017.

Nick Rust, Chief Executive of the BHA, said: ‘British racing offers world-class sport, gives enjoyment to millions of people a year, employs more than 85,000 people and contributes £3.4billion a year to the economy.

‘But we are underfunded and loopholes in the Horserace Betting Levy system, allowing the majority of betting operators to make no contribution from profits made on British racing through their digital businesses, continue to play a large part in that and we welcome the stance being taken.’

In order to stimulate its initiative, the BHA detailed benefits for bookmakers that contributed their levy share , contributing firms  would become UK Racing’s ‘Authorised Betting Partners’. The title has been granted to bookmakers 32Red, bet365 and Betfair for paying voluntary fees on their digital businesses.

The bodies have agreed a standstill period which will be in place until 31 December 2015 by which time the organisations hope that discussions with betting operators will have agreed the most suitable package of benefits that partners will benefit from.

All existing deals will be honoured but not renewed. Any new commercial deals with betting operators will contain a break clause to be triggered should they cease to be an Authorised Betting Partner at any point during the duration of a deal.

Maggie Carver, Chairman of the Racecourse Association, backed Nick Rusts comments

“The RCA is working with our colleagues across racing and betting towards the introduction of a Racing Right. Despite the Government’s welcome commitment to this policy it will take some time and the development of this new relationship with betting operators is an important step in the right direction.”

“The RCA and its members value all aspects of our commercial interaction with betting operators which brings benefits for all parties. However, it is right that the relationship is based on a fair contribution being made by all betting operators, wherever they are based, towards the existing Levy or any future funding model. The initiative being shown by ARC and Jockey Club Racecourses is entirely consistent with these principles and has our support.”