UK betting operators could be forced to pay racing bodies 10% of online race betting revenue, according to the responsible government minister.
Over the weekend, the Racing Post reported that Tracey Crouch, who represents the Department of Culture, Media and Sport (DCMS), had told racing industry stakeholders that the government would establish a rate of 10% of race betting revenue that both retail and online bookmakers would be required to remit to the racing industry as a replacement for the existing Levy scheme.
The current Levy system requires retail bookies to return 10.75% of their race betting revenue to racing, but there is no formal requirement for a similar kickback from online race betting operations. Some major UK online betting operators had struck deals with racing to remit lump sum payments to racing but racing stakeholders claimed these voluntary contributions were too low.
Companies like Gala Coral Group had offered to pay a harmonized 7.5% rate on race betting revenue but the British Horseracing Authority (BHA) deemed this insufficient. The BHA launched a new Authorized Betting Partner (ABP) scheme that reserved racing sponsorship opportunities for bookmakers who’d agreed to ante up 7.5% of online race betting revenue on top of the 10.75% retail levy.
In March, word broke that the Tory government planned to replace the annual Levy system with a new ‘race betting right’ that would impose mandatory contributions for both retail and online betting operators. The new system was tipped to take effect in April 2017.
The government continues to insist that it has yet to formally determine what rate bookies will have to pay. Racing and betting stakeholders are scheduled to hold separate meetings with Crouch on Wednesday, with written commentaries on the proposed 10% scheme to be submitted by November 4.
While a harmonized 10% levy rate wouldn’t give racing everything it wanted, the Racing Post estimated that the new regime would generate an annual £90m for the industry, not far off the £100m that racing had hoped to reap. The Levy generated a high of £99.3m for racing in 2005-06 but had fallen to £54.5m in 2015-16 as more punters shifted their betting action online.
Once a rate has been established, the UK will have to submit their plan to European Union officials to ensure the plan doesn’t fall afoul of the EU’s rules against state aid for domestic industries, although this process may be moot should the UK proceed with its plans to ‘Brexit’ the EU.