Battle lines are hardening between UK bookmakers and racing over the controversial Authorized Betting Partner (ABP) sponsorship scheme.
Earlier this week, Gala Coral Group CEO Carl Leaver offered a compromise to the British Horseracing Authority’s new ABP scheme, which as of Jan. 1 limits racing sponsorship opportunities to bookmakers who ante up 7.5% of their online race betting revenue on top of the 10.75% share of retail betting.
In a letter to the Racing Post, Leaver offered to “happily” pay 7.5% on online race betting revenue on the condition that the retail levy was reduced to 7.5%. Leaver claimed his company’s racing costs – media rights, sponsorship and levy fees – had risen 45% to £48m in the last seven years, while race betting revenue had fallen 18% to £124m. Leaver called the ABP scheme both “draconian” and “unsustainable.”
In response, the BHA issued a statement saying Leaver’s 7.5% offer was “not a realistic starting point for negotiations.” The BHA rejected Leaver’s ‘draconian’ tag as well as his mathematics, claiming that the Coral boss wasn’t factoring in the side benefits of non-racing wagers that punters may place when they make their racing bets.
The BHA slammed Leaver’s lumping of media rights into his expense claims, saying the increased investment “reflects the importance betting operators place on British Racing.” The BHA also noted that many UK bookies that do business in Ireland willingly pay 1% of betting turnover, from which Irish racing is set to receive €6m annually.
But Leaver’s proposal has won support from Greg Knight, managing director of JenningsBet, the UK’s largest independent retail betting chain. Knight told the Mail on Sunday that he supported a proposal to harmonize the retail and online levy rates in the belief that it would benefit racing.
Knight supports racing’s right to a cut of online race betting revenue but told the Mail that “if the retail rate were reduced, then anyone would find it incredibly hard to justify not paying anything from their offshore betting.”
To date, just three UK companies – Betfair, Bet365 and 32Red – have received official ABP designation. Other operators, like Betfred, Paddy Power and Gala Coral’s merger partner Ladbrokes, continue to publicly oppose the ABP scheme.