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UK Government Introduces Mandatory horseracing levy
U.K. GOVERNMENT INTRODUCES MANDATORY HORSE RACE BETTING LEVY (Update)
Land and online bookmakers will be required to pay ten percent of their gross UK horseracing wager revenues to the industry.
The UK government has moved on the long-running horse racing levy dispute between UK bookies and the British Horseracing Authority, replacing the current and perennially contentious voluntary system with a mandatory contribution of 10 percent of revenues accrued from betting by UK punters.
The levy kicks in after the first GBP 500,000 in gross revenue has been earned by online and retail bookmaking firms and other betting organizations.
Announcing the levy late Friday, the minister for sports, tourism and heritage, Tracey Crouch, said the levy would be implemented from April this year and will apply to all bookmakers and companies accepting horse racing wagers from British punters.
The current Levy Board will be disbanded in early 2018, Crouch said, revealing that the Gambling Commission will be given the responsibility of claiming the fees from licensed bookmakers and other betting companies.
The resulting levy income will be distributed by the new Racing Authority.
Because the UK is currently a member of the European Union, the decision will have to be ratified by the European Commission, which will determine if it constitutes "state aid".
At 10 percent, the levy being imposed is at the upper end of speculative estimates from the industry, and more than the gambling firms wanted to pay.
Government anticipates that it will raise around GBP 90 million a year for Britain's struggling horse racing industry...around GBP 35.5 million more than the voluntary scheme realized last year.
Crouch said that government would review the compulsory levy after seven years to assess its fairness and relevance in the event of future market changes.
The British Horseracing Authority, which has been at the centre of frequently bitter arguments over the levy with the betting industry, was understandably pleased by the government's decision, with CEO Nick Rust observing that it would "restore to racing a return from all betting on our sport at a fair and proportionate rate”.
Major bookmaking companies were less enthusiastic about the government move, with William Hill pointing out that over the past decade the horse racing fraternity has enjoyed significant escalations in media rights income from betting companies, and that the levy could be construed as state aid.
Ladbrokes argued that the magnitude of increases over the past ten years of funds flowing from the betting industry to the horse racing community could soon find the latter "out of friends”.
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