The Association of British Bookmakers (ABB) has welcomed the Government’s decision to introduce a new funding system for horseracing, but warned that any new development should not be taken in isolation from other issues.
This morning, during a debate in the House of Commons, Culture Secretary John Whittingdale announced that the Government plans to introduce a new system which will replace the next Levy Scheme – one that will capture payments from both retail bookmakers and online bookmakers.
He said: “Our aim is to introduce a new funding arrangement for British racing by April 2017. We will create a level playing field for British-based and offshore gambling operators, and ensure a fair return from all bookmakers to racing, including those based offshore.
“Racing will be responsible for making decisions on spending the new fund and we’ll be making further announcements shortly.”
The ABB commented: “We will be working closely with the Government and horse racing on the critical and so far undecided detail of the new system to ensure that any new levy is both fair to horse racing and the betting industry.”
It added that a “fair return” should mean fair for both parties: “The amount that racing receives from betting, particularly in media payments, has grown by tens of millions in recent years. On top of this, betting shops already bear an unfair burden and the current rate of 10.75% is unsustainable for the retail sector.
“Any new deal on levy has to be fair to betting shops and should be based on an accurate assessment of the level of subsidy required to support horse racing.”
British Horseracing Authority chief executive Nick Rust described the announcement as ‘ truly historic’. He added: “We now have a great opportunity to bring together racing and betting in tackling the sport’s funding issues for the benefit of all parties, and this is something that we are actively pursuing.
“We want to focus the joint efforts of racing and betting on innovation and growth in the sport as a betting product.”
Given the current standoff between racing and bookmakers regarding the Authorised Betting Partner (ABP) policy introduced this year, where bookmakers are refused sponsorship of the sport unless they meet racing’s demands for payments of a certain level on online business, bringing together the two factions will be complicated.
Betfair, bet365, 32Red and BetVictor have so far signed up to the new system, with the four bookmakers having agreed to make enough voluntary contributions from their remote activity to satisfy the racing authorities. Other established bookmakers like Ladbrokes, Betfred, Coral, William Hill and Paddy Power have yet to agree to ABP status.
Given Paddy Power’s merger with Betfair, it will be interesting to see how that effects the ABP status of the enlarged group. It would also suggest that the ABP status has a very limited shelf life; if a new law is to come in next year dealing with funding then all bookmakers will be paying the same rate.
What was also interesting is what was not said by Whittingdale. There was no mention of the ‘betting right’ that racing had been lobbying for, and indeed George Osborne suggested in his Budget last year, and it appears that the new funding mechanism might be an alteration of the current Levy Scheme.
However the Levy Scheme is a hard one to alter legally. Back in 2001 the Labour Government had the scrapping of the Levy Board, which had funded the sports of horseracing since 1961 through statutory payments from bookmakers, as part of its manifesto and twice aborted plans to close it down after failing to find an alternative.
In discovering a pathway for future funding of the industry, maybe Whittingdale has succeeded whether many others have failed. We wont know how robust this new system is until the details are revealed.