UK Gov. Increased Horseracing Levy Welcomed by BHA

The Levy on bookmakers which generates money for horse racing was increased by the UK government yesterday, ed February 16, from 10 per cent to 10.75 per cent in what the British Horseracing Authority (BHA) claim is a “major step in dealing with long-standing failings of the current system.”

The 50th Levy Scheme was announced by Culture Secretary Jeremy Hunt, by which betting helps toward funding the sport in Britain, with horse racing relying heavily on the betting industry unlike any other sport so the increase comes as a welcome boost to allay fears for the future of the sport.

Mr Hunt acted after talks between the bookmakers and racing industry stalled and stated: “It is really disappointing that two important industries have been unable to come to a sensible commercial agreement.”

The increase means the Levy planned for what is the second most attended sport, employing thousands of people, in 2011/12 should be between US$118m to $130.4m, he added.

Concerns have risen from the BHA of late with, among other issues, some bookmakers moving offshore, meaning that they do not have to pay the horseracing betting Levy on the right to take bets on British races.

Cash from the levy, a major funding mechanism which has been in decline, goes towards veterinary science, prize money, training and breeding programs. As part of the new deal, the threshold level under which betting shops will pay a reduced rate of levy will fall from $143.236 to $80,705.

In response to the latest decision, BHA chairman Paul Roy stated:

“Racing welcomes today’s decision by Secretary of State Jeremy Hunt as a major step in dealing with long-standing failings of the current system. It will halt the severe decline in the Levy, and the damage this is doing to the sport.

“The Coalition Government could not right all the wrongs in the current system with this decision, but they have addressed issues with traditional LBOs, and have signalled fundamental reform to come. The next stage has to deliver what is due from remote betting, particularly offshore operators and betting exchanges.

“The range this decision sets is therefore short of the full amount the entire betting industry should be contributing, but today’s announcement is an important shift in achieving Racing United’s goals.

“The rise in the headline rate is significant, as is the major reduction in the threshold level, and shows that nothing is set in stone.

“We believe that it is only through major reform that full and fair return, and the environment for real and constructive negotiation, on a level playing field, can be achieved. As we told the Secretary of State in November, we will devote our energies in the coming months to working with Government on this.”