London – British horseracing has welcomed an announcement by Culture secretary John Whittingdale that the UK government intends to replace the current betting Levy funding system for racing by April 2017.
The racing industry has long called for government intervention against the current system, from which offshore online betting is exempt and costs the sport tens of millions of pounds.
Chancellor George Osborne proposed a “Racing Right” to replace the Levy in last March’s Budget.
And in a seismic overhaul that would give the sport a significant cash boost, Whittingdale has outlined the Government’s aim of pooling together income from betting on racing both in shops and online.
He said: “Our aim is to introduce a new funding arrangement for British racing by April 2017.
“We will create a level playing field for British-based and offshore gambling operators, and ensure a fair return from all bookmakers to racing, including those based offshore.
“Racing will be responsible for making decisions on spending the new fund and we’ll be making further announcements shortly.”
British Horseracing Authority chief executive Nick Rust has been working hard to fill the void in the interim after having imposed an Authorised Betting Partner (ABP) policy, which requires bookmakers to pay racing an agreed chunk of the profits they make from racing bets online.
Betfair, bet365, 32Red and BetVictor have so far signed up to the new system, with the four bookmakers having agreed to make voluntary contributions from their remote activity.
Other established bookmakers like Ladbrokes, Betfred, Coral, William Hill and Paddy Power have yet to agree to ABP status.
While the BHA has welcomed the news, it still intends to build on the ABP scheme with the aim being “to smooth the transition to the new funding model and to maintain the current level of Levy funding”.
Rust said: “Today’s announcement is one that should prove truly historic. The new funding model will ensure a fair transfer of funding to British racing based on all betting activity on the sport – a link that was first established in law in 1961.
“It meets all of racing’s requirements for a new funding model and can bear fruit in 2017, which is crucial given the significant Levy cliff we face.
“In the longer term, this means greater financial security for the sport, a platform for growth, a huge boost to our participants and more certainty for the tens of thousands of people who rely on racing for their livelihoods.
“We look forward to working with government on the details of these proposals and to make sure the implementation timetable they have announced today is achieved.
“We now have a great opportunity to bring together racing and betting in tackling the sport’s funding issues for the benefit of all parties, and this is something that we are actively pursuing.
“We want to focus the joint efforts of racing and betting on innovation and growth in the sport as a betting product.”
Philip Freedman, executive chairman of the Horsemen’s Group, which represents the interests of racehorse owners, trainers, jockeys, stable staff and breeders, was also pleased by the announcement.
He said: “Horsemen will be delighted by the announcement that racing will get rights to funding from offshore bookmakers by April 2017.
“Restoring racing’s income from betting to the levels intended by previous government determinations, before so much betting had migrated offshore and outside the scope of the Levy, is an essential step in growing the industry to the benefit of both horsemen and betting operators.”
Stephen Atkin, chief executive of the Racecourse Association, added: “The Racecourse Association warmly welcomes government’s announcement as a critical moment for the sport and an important development for all of our members.
“Once implemented, this will provide much needed stability and an incentive to both racecourses and horsemen to invest in the sport for the long-term.
“We look forward to working with our colleagues in racing and betting as well as the government to help implement this decision.”
The Association of British Bookmakers is keen to work in unison with the government and the BHA, but said the proposed new system must be “fair to betting shops”.
A statement read: “We welcome the government’s progress on introducing a new system for the betting industry to fund horse racing.
“We will be working closely with the government and horse racing on the critical and so far undecided detail of the new system to ensure that any new Levy is both fair to horse racing and the betting industry.
“The amount that racing receives from betting, particularly in media payments has grown by tens of millions in recent years.
“On top of this, betting shops already bear an unfair burden and the current rate of 10.75 per cent is unsustainable for the retail sector.
“Any new deal on Levy has to be fair to betting shops and should be based on an accurate assessment of the level of subsidy required to support horseracing.”