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First step to commercialising British horse racing
Wednesday July 4, 2012 : BETFAIR INKS GBP 40 MILLION DEAL WITH BRITISH RACING
First step to commercialising British horse racing
Shortly after reports that major rival gambling groups William Hill plc and Betfair plc are soon to clash in the UK courts in a bid to get the latter's customers to contribute to the Horse Racing Levy, Betfair has announced a five-year GBP 40 million commercial deal signed with British Racing.
The bookmaker and British Racing, which comprises British Horseracing Authority (BHA), the Racecourse Association and the Horsemen's Group, have signed what is termed as a landmark agreement where Betfair will pay British Racing 10.75 percent of all revenues on the sport from its UK customers. The agreement also contains substantial guaranteed minimum payments.
Seemingly a win-win for all involved, British Racing has made commitments linked with these minimum payments that ensure a minimum number of fixtures per year, while Betfair's betting data will be used to help construct a fixture list that will optimise British Racing's attractiveness as a betting product for punters, the racing industry and betting operators.
The five-year agreement will replace Betfair's current annual voluntary Horserace Betting Levy payments, with the agreement taking effect from the 51st Levy Scheme covering 2012-13.
Betfair has already made upfront Levy payments of GBP 6.5 million for 2012-13 which will be offset against payments due under the new commercial agreement.
Paul Bittar, chief executive of the British Horseracing Authority, who in conjunction with Simon Bazalgette, group chief executive of The Jockey Club, led Racing's negotiations, said:
"We are delighted that we have been able to reach an agreement with Betfair, one which represents a landmark for both the racing and betting industries. It brings many benefits, including substantial and increased guaranteed funding as well as importantly providing certainty for the sport in relation to Betfair's contribution. We hope that similar arrangements with other betting operators will follow.
"This agreement has required a high degree of co-operation both within Racing, with all the major organisations closely involved in negotiations, and of course with Betfair, who have shown great commitment in their intent to be a constructive commercial partner with our sport.
"We firmly believe both in the value of British Racing as a product and the need to work closely with the betting industry for our mutual benefit. Government has committed to bringing forward proposals to address the long-standing and damaging flaws in our current funding mechanism. We continue to engage fully in this process, but in parallel British Racing also seeks long-term commercial deals such as this to assist in the transition to a wholly commercial future."
Martin Cruddace, chief legal and regulatory officer at Betfair said: "This deal is a genuinely historic moment. For the first time, British Racing and Betfair have proved it is possible for us to work together on a truly commercial basis. Of course it has not been easy but the end result completely justifies all the hard work.
"We hope that this marks a new era and call on other betting operators to adopt similar agreements to help ensure a strong, healthy and vibrant horseracing industry in this country.
John Penrose MP, Minister for Tourism and Heritage at the Department for Culture, Media and Sport said: "The Government has always believed there should be a commercial relationship between British Racing and betting operators and I pay tribute to all parties for bringing about this deal.
"Betfair's willingness to be the first operator to do a deal is impressive and admirable, as is the commitment of Paul Roy and Paul Bittar's team at the British Horseracing Authority, without whom the deal would not have been possible. I hope others will follow swiftly in their wake."
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