UK betting operators are in for a shock on Thursday as reports indicate the government will proceed with plans to grant the horseracing industry its long-coveted ‘betting right.’
On Wednesday, the Racing Post broke the news that Thursday will see the Tory government announce plans to replace the much-loathed Levy system with a new regime that requires both land-based and online bookmakers to transfer a certain cut of their UK race betting revenue back to the sport.
On Thursday morning, Tory MP Bob Blackman is expected to table a question for the minister for Culture, Media and Sport regarding the government’s promise to impose a permanent solution to the annual Levy system, which requires land-based bookies to kick back 10.75% of their UK race betting revenue to the sport.
The minister is expected to respond with a vow to introduce secondary legislation extending the mandatory kickback to all race wagers, be they placed in a betting shop or via an online betting site. The legislation reportedly anticipates this new system to be in place by April 2017.
The current Levy scheme generates around £100m to racing each year but the new betting right could boost this annual haul by £30m. Further details won’t likely be forthcoming until the government unveils its budget on March 16.
The plan would require majority votes in parliament and the House of Lords, as well as assurances from the European Union that the proposal doesn’t constitute illegal state aid. Bookies are expected to launch an EU challenge of the UK proposal but racing supporters believe precedent has already been set via a 2013 European Commission decision approving a similar plan in France.
The British Horseracing Authority (BHA) will reportedly stick with its controversial Authorized Betting Partner (ABP) scheme until the new betting right is enacted. The ABP restricts racing sponsorships and other tie-ups to betting companies that have agreed to voluntarily contribute a slice of their online race betting revenue to the sport. To date, only four firms – 32Red, Bet365, Betfair and BetVictor – have been granted official ABP status.
Last month, four ABP holdouts – Ladbrokes, Coral, William Hill and SkyBet – were denied the right to advertise on TV subscription channel Racing UK. A spokesperson for the channel’s owner, Racecourse Media Group, told CalvinAyre.com the decision to allow the bookmakers to advertise on Racing UK if they sign up to ABP partners was “purely a Racecourse Media Group (parent company of RUK) decision, and not the BHA’s.”
UK bookies can be excused if they feel a little persecuted of late. In the past year-and-a-half, they’ve witnessed the introduction of the new 15% online point-of-consumption tax, as well as the increase in land-based Machine Games Duty from 20% to 25%. The changes have wreaked havoc with operators’ bottom lines, with William Hill paying £87m in additional taxes in 2015.