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Bookies unite to pen Levy letter

TAGs: Betfair, Bookies, british horseracing authority, Gala Coral, Ladbrokes, levy, William Hill

bookies-unite-against-levyIn recent times the argument between bookmakers and the British Horseracing Authority (BHA) has morphed into the kind of petty back-and-forth arguing that you might expect in a school playground. Both sides have their own view on the way it should go, and now we’ve had the latest swipe in an argument that has been going on for quite some time.

To fill you in on it all, as if you didn’t know already, the BHA and ‘Racing United’ want to increase the amount bookmakers pay through the Levy. The bookmakers don’t agree with an increase, which is where we currently find ourselves. Today the country’s principal bookmakers sent a letter to the man who really matters in the whole process, Culture Secretary Jeremy Hunt. Published in this morning’s Daily Telegraph the letter, signed by Will Roseff, Chairman, The Bookmakers’ Committee, Richard Glynn, Chief Executive, Ladbrokes plc, Neil Goulden, Chairman Emeritus, Gala Coral Group, Ralph Topping, Chief Executive, William Hill plc, David, Yu, Chief Executive, Betfair, Keith Johnson, Chairman, National Association of British Bookmakers, and Warwick Bartlett, Chairman, Association of British Bookmakers, basically explains the bookies’ position on the industry and what their argument is centred on.

Along with this letter, Mr. Hunt has already received recommendations on the Levy Board from three government ministers and will make his decision on December 31st, meaning it will be some New Year’s Eve party for one side of this argument.

The full transcript is as follows:

Sir

Culture Secretary Jeremy Hunt will, in the next few weeks, decide on whether to bow to the British horseracing industry’s demands for an increase in the Levy paid by Bookmakers.

The “Racing United” campaign group of owners, trainers, jockeys and racecourses is attempting to paint a picture of an industry in financial crisis by focusing solely on revenue from the Levy.

But the full facts do not back this claim.

Betting supports British horseracing not just through the Levy, a statutory subsidy funded by a tax on the profits from betting on British horseracing.

Our industry also funds British horseracing through payment for TV coverage from courses and sponsorship of meetings and races. The revenue generated for British horseracing by both of these has increased as revenue from the Levy has fallen.

Over the coming years, the British horseracing industry’s revenues will be further boosted by above-inflation increases already agreed in lucrative new contracts for TV pictures with SIS and Turf TV which commence in 2012, and which include advance fees received by the racecourses.

Other revenues are also healthy. The Racecourse Association has announced a 4% increase in overall attendances. Indeed, far from the British horseracing industry being in financial crisis, the major racecourse groups seem likely to see profits increase. Arena Leisure, on whose courses 26% of fixtures take place, has already posted a substantial rise in profits.

At the heart of this issue is a fact that the British horseracing industry seems determined to ignore – revenue from the Levy is down principally because fewer people are betting on British horseracing. Its relevance to the betting customer continues to decline.

British horseracing, just like every business, must adjust to changing circumstances rather than expect a bail-out through an increase in a subsidy established in 1961 to compensate racecourses for the anticipated impact of off-course betting on attendances. The world has changed a great deal in the last 50 years. British horseracing, protected by this subsidy, has failed to adapt.

The betting industry is happy to work with British horseracing. But given our falling revenues from betting on British horseracing and the increased money we pay for TV rights, ‘Racing United’s’ demands for an increase in the Levy is without justification. Indeed, if anything, the falling value of British horseracing to betting makes the case for a reduction in the Levy.

British horseracing must look inward, not outward, for solutions. Bookmaking can’t be expected to pay a higher percentage of its profits to prop-up an industry whose problems are primarily of its own making. We are confident that Mr Hunt will look at this broader picture when he comes to make his decision in respect of the 50th levy scheme.

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