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Bookmakers Pay 18 Million To Horse Racing Industry
Friday October 25,2013 : U.K. BOOKIES COMMIT TO GBP 18 MILLION EXTRA FOR HORSE RACING
Four year deal will see voluntary payments made by layers for first time
The major British bookmakers have signed a ground-breaking four-year funding deal with the horse racing industry that will see an additional GBP 18 million paid in voluntary tranches to the horse racing levy in a four-year deal.
The Guardian newspaper reports that the deal between the racing and betting industries could see prize money reach a new record total of GBP 120 million in 2014.
"The addition of voluntary payments due to start in April 2014 with the 53rd Levy is a significant step towards the eventual abolition of the statutory basis to racing's principal funding mechanism", the Guardian observes..
William Hill, Ladbrokes, Coral and BetFred will contribute GBP 4.5 million a year for the next four years to an incentive fund, overseen by the Levy board, which will aim to produce more competitive racing and, by extension, more Levy revenue.
The total of GBP 18 million in voluntary funds is in addition to payments required by law, which will remain at 10.75 percent of gross profits on British racing earned in the country's retail betting shops.
The good news for online operators is that the bets placed on British racing in the rapidly expanding online sector will remain outside the reach of the Levy system.
The historic voluntary funding agreement follows a deal struck between the horse racing fraternity and the Betfair betting exchange in 2012, under which Betfair – which operates entirely online and offshore – will make a voluntary payment of around GBP 7.8 million to the 2014-15 Levy scheme.
The four bookmakers involved in the latest deal said in a joint statement on Thursday that the incentive fund will be "...used to improve the competitiveness of the racing product, making it more appealing to both racegoers and betting office customers alike".
Paul Bittar, the chief executive of the British Horseracing Authority, said that the "...arrangement has the support of the principal organisations in the sport, including the Racecourse Association and Horsemen's Group, and represents a positive step forwards in the prevailing circumstances. This additional funding … brings a degree of certainty and considerable upside in the coming years".
Annual wrangling over the amount that would return to racing from the betting industry has been a feature of the Levy system throughout its history, The Guardian notes. Several schemes have been referred to the government for determination after the two sides failed to agree on a figure, much to the annoyance and exasperation of the politicians concerned.
"This has all been achieved with no major structural reforms, through negotiation and a lot of goodwill from lots of parties," Bittar said. "Racing and betting having a good relationship has to be a good thing, and in terms of a platform this is a good opportunity for growth while we also pursue the right long-term mechanism for the sport."
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