The Levy Board in UK horseracing appears to be increasingly concerned at the prospect of major British bookies relocating overseas, and has called for a boycott of offshore bookmakers, who are currently not obliged to pay the levy. The Guardian newspaper reports that losses of up to GBP 25 million could be sustained by the Board if more bookie groups leave the UK's shores for kinder taxation and regulatory climes.
The Board apparently wants a review of sponsorship and other commercial deals involving offshpore companies. Rob Hughes, the chairman of the Levy Board, this week launched what he described as a "pre-emptive strike" to stop British bookmakers moving their operations overseas, calling for a boycott of betting firms that do not pay Levy on their offshore business.
Douglas Erskine-Crum, the board's chief executive, later confirmed that the board is unable to name the bookmakers concerned "for legal reasons".
A number of bookmakers taking bets on British racing run operations that are either partly or wholly based outside Britain, where there is no legal requirement to pay either Levy or betting duty on profits generated offshore.
In a statement released by the Levy Board this week it suggested that "everyone in the media and racing … should review the relationships they have with overseas-based betting operators, specifically advertising, sponsorship, promotion and indeed betting with overseas-based bookmakers who are not paying or contributing to the Levy."
The statement also suggested that "bookmakers operating overseas, and taking bets from British customers on British racing, have a moral obligation towards supporting British racing by paying a Levy contribution."
Hughes said later that his call for those involved in the racing industry to "review their relationships" with offshore bookies was an attempt to stop other betting operations following them abroad.
"It is up to us all to take a view as to whether we want to support these people who are using UK racing to make profits but are avoiding the Levy," Hughes said.
"This is really a pre-emptive strike prior to what we understand might happen with other bookmakers. William Hill have made no secret of the fact that they may take their online and telephone operations offshore, and other bookmakers have said that they might then have to follow suit for competitive reasons. If that were to happen, we estimate that between GBP 20 million and GBP 25 million would be lost to the Levy, which is a quarter of the total.
"It is no good racing just looking to the UK government to sort this situation out, when part of the answer also lies in our own hands. Too often in racing, we close the stable door when the horse has bolted, and the key message here is that part of the answer lies in our own hands."
There appeared to be little appetite for the Hughes call.
Steve Fisher, the founder of Stan James, which has a small chain of UK betting shops in addition to its Gibraltar telephone and internet business, told The Guardian: "Stan James UK of course pays Levy and tax and always has done. I'm not a shareholder or director in any other company apart from Stan James UK so I can't comment on anything else."
A statement issued by Victor Chandler said that "Victor Chandler have long been a supporter of British horse racing and have always paid the required Levy on business through the Victor Chandler UK business, and continue to pay the Levy on our operations in the UK." It added that "Victor Chandler support British horse racing commercially with an investment in excess of seven figures each year".
Both Ascot and Newmarket, which have major sponsorship agreements for the Victor Chandler Chase and Stan James Guineas Festival respectively, said yesterday that they have no plans to review their relationships with the firms.
"We have a relationship with Victor Chandler which is extremely beneficial both for us and for them," Nick Smith, Ascot's head of PR, said. "From our point of view, we are happy to continue to work with Victor Chandler as we have always done in the past."
Stephen Wallis, the managing director of Newmarket, said that "Newmarket has a very healthy relationship with Stan James and we hope that will continue."