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POWERFUL BOOKIES ADDRESS UK HORSE RACING LEVY ISSU
Gambling companies highlight other sources of revenue for horseracing
The long-running and still to be resolved dispute over a subsidisation levy from British bookies for UK horseracing saw major bookmakers speaking up this weekend in an open letter to the government's Culture Secretary, Jeremy Hunt, who has the unenviable task of finalising the issue.
An imposing roster of top companies and executives signed off on the letter, including Will Roseff, Chairman, The Bookmakers’ Committee; Richard Glynn, Chief Executive, Ladbrokes plc; Neil Goulden, Chairman Emeritus, Gala Coral Group; Ralph Topping, Chief Executive, William Hill plc; David Yu, Chief Executive, Betfair; Keith Johnson, Chairman, National Association of British Bookmakers; and Warwick Bartlett, Chairman, Association of British Bookmakers
The letter reads:
"Culture Secretary Jeremy Hunt will, in the next few weeks, decide on whether to bow to the British horseracing industry’s demands for an increase in the Levy paid by Bookmakers.
"The “Racing United” campaign group of owners, trainers, jockeys and racecourses is attempting to paint a picture of an industry in financial crisis by focusing solely on revenue from the Levy.
"But the full facts do not back this claim.
"Betting supports British horseracing not just through the Levy, a statutory subsidy funded by a tax on the profits from betting on British horseracing.
"Our industry also funds British horseracing through payment for TV coverage from courses and sponsorship of meetings and races. The revenue generated for British horseracing by both of these has increased as revenue from the Levy has fallen.
"Over the coming years, the British horseracing industry’s revenues will be further boosted by above-inflation increases already agreed in lucrative new contracts for TV pictures with SIS and Turf TV which commence in 2012, and which include advance fees received by the racecourses.
"Other revenues are also healthy. The Racecourse Association has announced a 4 percent increase in overall attendances. Indeed, far from the British horseracing industry being in financial crisis, the major racecourse groups seem likely to see profits increase. Arena Leisure, on whose courses 26 percent of fixtures take place, has already posted a substantial rise in profits.
"At the heart of this issue is a fact that the British horseracing industry seems determined to ignore - revenue from the Levy is down principally because fewer people are betting on British horseracing. Its relevance to the betting customer continues to decline.
"British horseracing, just like every business, must adjust to changing circumstances rather than expect a bail-out through an increase in a subsidy established in 1961 to compensate racecourses for the anticipated impact of off-course betting on attendances. The world has changed a great deal in the last 50 years. British horseracing, protected by this subsidy, has failed to adapt.
"The betting industry is happy to work with British horseracing. But given our falling revenues from betting on British horseracing and the increased money we pay for TV rights, ‘Racing United’s’ demands for an increase in the Levy is without justification. Indeed, if anything, the falling value of British horseracing to betting makes the case for a reduction in the Levy.
"British horseracing must look inward, not outward, for solutions. Bookmaking can’t be expected to pay a higher percentage of its profits to prop-up an industry whose problems are primarily of its own making. We are confident that Mr Hunt will look at this broader picture when he comes to make his decision in respect of the 50th levy scheme."
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