Levy plea would result in up to £153m annual bill for
racing industry is seeking an increase of at least 44% in its return from the
betting industry in its submission to the government over the next Levy
of State, Department for Culture, Media & Sport
The submission, which
was delivered on Monday to the Department for Culture, Media and Sport, calls
for a Levy yield of between £135m and £153m in 2008-09, up from an
estimated £94m from the latest scheme, which will conclude on 31 March
2008. The British Horseracing Authority's case, submitted with the support of
racecourses and owners, demands a basic Levy rate of 15% of bookmakers' gross
profits, up from 10% under the current scheme.
It also seeks the
imposition of a 1.25% Levy on net profits of punters on betting exchanges,
raising the possibility that Betfair, which dominates the market, will be
forced to increase the commission on winnings paid by its customers, currently
between 2% and 5%.
In a covering
letter to James Purnell MP, the secretary of state at the DCMS, and Gerry
Sutcliffe MP, the minister for sport, Paul Roy, the chairman of the BHA, says
that the "current level of return is neither fair nor reasonable", and states
his belief that "a detailed and holistic examination of the current evidence
will conclude that a fair and reasonable return to racing is far greater than
The last determination by the government, in 2002, set
the return to racing from betting at between £90m and £105m. Using
this as a basis, the BHA argues that a number of factors lead to its demand for
a minimum yield of £135m just six years later.
These include an
increase of around 30% in the number of meetings annually, increases in
integrity and regulatory costs and normal indexation. They also point to "a
rise in the gross win of the two leading bookmakers from £1.1bn in 2002
to £1.8bn in 2006" as evidence of the betting industry's "increased
capacity to pay".
In the case of betting exchange customers, the BHA
proposes a direct levy on individual punters of 1.25% of net winnings in any
market, aiming to produce a return of £20m per year.
argues that the amount contributed by exchanges to the Levy should rise from
£6m, in 2006-07, to £20m under the next scheme. Whether this is
truly designed to boost racing's revenues, however, or to stifle further growth
of the exchanges, will certainly be a source of much debate.
will consider submissions from both the racing and betting industries before
delivering its determination, which is expected early in the new year.
The Advertising Standards Authority ruled yesterday that an advert
placed by Satellite Information Services which attacked Turf TV, its rival in
the betting-shop market, breached clauses in the advertisers' code that cover
substantiation of claims, truthfulness, and comparisons with competitor
The full judgement will be published on the ASA's website