LEVY BOARD REPORT SUBMITTED TO JEREMY HUNT

Posted By Lenny S. On 12/5/10 – Both sides win some – lose some but report leans towards the racing fraternity
 
The latest development in the ongoing dispute between Britain's horse-racing fraternity and bookmakers has seen the Levy Board, which comprise three members appointed by the Government, recommend that bookmakers pay a levy on foreign racing and that the "threshold" system, designed to benefit smaller betting shop operators, be abolished, reported the UK publication, The Guardian, this week.
 
Recommendations in the report include:
 
–     That the target yield for the next levy should be GBP 75 million to GBP 80 million, well short of the GBP 130 million to GBP 150 million that the racing fraternity insists it requires.
–     Suggests the abolishment of the "threshold" system, which was initially instituted to protect small betting shops who operate on tight margins.
–     Reintroduction of a levy charge on foreign racing which could raise several million pounds per annum and is currently retained by the bookmakers.
–     That the idea promoted by racing that profits from gaming machines should also be subjected to a levy be rejected.
–     Suggested that the portion of Bookmakers gross profits, returned to racing, be reduced from 10 percent to 9 percent.
 
Fierce opposition is expected from Bookmakers on the "threshold" system abolishment, however, the report argues that with racing comprising a smaller portion of shop turnover because of sports betting and gaming machine competition, the thresholds are no longer required.
 
The issues of offshore bookmakers who do not pay tax or levies and the acceptable level of levy contributions from betting exchanges were not addressed in the report as they are outside of the Board's mandate.
 
Patrick Nixon, Chief Executive, Association of British Bookmakers, said that a detailed response to the report will be delivered via the Levy Board’s bookmakers’ committee
 
Paul Dixon, President, Racehorse Owners Association (ROA) used his address at the association's annual awards night to welcome the Levy Board's report.  "This development shows how the Levy Board itself recognizes the need to modernise its own structure.  Certainly, substantial strides will have been made if recommendations to abolish the outmoded threshold system and re-introduce Levy payments on foreign racing are accepted."  He went on to say, "That achieved, racing must then continue to press the Government to bring about legalization that ensures offshore-based bookmakers pay levy."
 
Jeremy Hunt is expected to make a final decision within the first few weeks of 2011 and both the racing fraternity and the bookmakers association have until the end of 2010 to make submissions of their own to Government.