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British racing, bookmakers look to government after Levy talks break down

TAGs: british horseracing authority, horseracing, levy

uk-racing-betting-levy-talks-break-downTalks between UK online bookmakers and racing officials to establish a new race betting levy have broken off, with each side pinning the blame squarely on the other.

On Saturday, the Horserace Betting Levy Board and Bookmakers’ Committee officially abandoned efforts to work out a deal on the 55th Levy scheme, which is set to take effect on April 1, 2016. The responsibility has now been lateraled to the Department of Culture, Media and Sport, which will attempt to play Solomon and slice up this baby in a way that satisfies both parties (or pisses them off equally, take your pick).

The British Horseracing Authority (BHA) had been seeking a 10.75% cut of racing revenue from retail betting operators and 7.5% from online operators. The online rate would have risen to 8.25% in the 56th scheme and to 9% in the 57th.

The bookies had reportedly countered with a flat sum offer covering the next four years. The proposed sum reportedly worked out to a rate slightly over 4% of revenue but this would decline over time as more and more race bettors opted to wager online.

Racing’s negotiators had insisted on a percentage of racing revenue rather than the lump sum payment. Racing also sought transparency regarding the contributions from individual bookies to ensure it could accurately designate which operators had earned the proposed Authorized Betting Partner tag.

The Racing Post quoted BHA chief Nick Rust saying that the offer put forward by the participating online operators “represented around 3p in a £10 bet. It’s not a fair contribution and we couldn’t accept it.” Rust said “two or three of the major operators” had been prepared to offer “a significantly higher rate” but consensus remained elusive.

Bookmakers’ Committee chairman Mike O’Kane said he was “very frustrated” that racing had rejected his group’s “very good argument which realistically addressed the challenges faced by bookmakers and racing.” O’Kane said racing needed to “face up to the reality” that the bookies’ total contribution to racing – via levy, media rights and sponsorship – was increasing every year, yet racing continued to seek “substantial increases from the levy.”

O’Kane lamented the fact that the failure to reach a deal “brings more uncertainty when both racing and bookmaking would benefit from a period of stability.” Clearly unmoved, Rust told At The Races that the BHA would push the government to make good on their promise to impose a Horserace Betting Right to supplant the Levy.

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