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Levy plea would result in up to £153m annual bill for bookmakers 28/11/2007
Greg Wood

The 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 scheme.
James Purnell MP
Secretary 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 current levels."

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.

The BHA 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.

The DCMS 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 products.

The full judgement will be published on the ASA's website today.

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