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 Welcome to
the News desk.
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| Shock UK Horse Racing Levy Change |
10/03/2016 |
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 Editor |
• For the first
time we should get an idea of how much racing is commercially worth to a mass
audience, without the statutory fog of the Levy to get in the way
Racing’s yield from the current Levy system,
which is now more than 50 years old, captures only bets placed in
Britain’s 9,000 betting shops, and has been declining sharply in recent
years as bookmakers have moved their online operations offshore, beyond the
Levy’s reach.
Nick Rust, the British Horseracing Authority’s
chief executive, described Thursday’s confirmation that the government
will seek to replace the sport’s Levy funding system by April 2017 as
“truly historic”, but it might still be argued that he was selling it
short.
If all goes to plan, replacement of the Levy by a commercial
system to capture both retail and online betting on racing will catapult the
sport straight from the 1960s, when the Levy was introduced, into the same here
and now as everyone else.
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The first and most
obvious question on many minds will be: how much is it worth?
Bringing
offshore betting under the umbrella will, inevitably, raise millions, and
probably tens of millions, more each year, to boost an industry which, directly
or indirectly, employs 85,000 people. More information about the hard numbers,
including the rate at which bookmakers will be charged, will emerge in due
course, possibly in the Budget speech on Wednesday week. In a sense, though,
the money is not the most important thing. It is the principle that is truly
priceless.
The fundamental flaw in the Levy system was that it always
allowed the bookmakers to make the opening offer, as if it was the bookies,
rather than their punters, who were the ultimate source of the cash. Racing
stages entertainment for its audience, and what they lose over time from
betting on it is the price of their fun.
But instead of selling tickets
to the public like a normal business, the Levy forced racing to go through an
agent, which block-booked the entire theatre and then set a limit on how much
it would pay. A commercial replacement for the Levy should not only modernise
the funding of racing, but its entire structure and outlook. The punters, and
not the bookmakers, will at last assume their rightful position as the
sport’s real customers.
The bookmakers, meanwhile, will be service
providers, paid a commission for handling racing’s income stream from
betting. Finally, crucially, it will not be a question of how much the bookies
pass on to racing, but how much racing lets them keep.
As a result, and
for the first time, we should also get a good idea of how much British racing
is worth commercially to a mass audience, without the statutory fog of the Levy
to get in the way. The sport’s income from betting will be intimately
linked to the success or failure of attempts to grow its audience in Britain
and abroad and give it what it wants: an exciting, deeply competitive sport
which is also the best and most natural betting medium yet
conceived.
This is an opportunity that racing has been working towards
for many years. Try as they might, the bookmakers could not outrun the 21st
century and basic, commercial common sense forever.
The big gambling
businesses that have resisted the sport’s Authorised Betting Partner
initiative thus far may decide to keep running for a little
longer.
Alternatively, they may cave in and accept that, in future, they
will hand over a slice of their entire gross profit on British racing before
they do anything else, and that the future might as well start now.
But
whatever happens on ABP, British racing now has a firm commitment to Levy
replacement from a government which seems to have the will to deliver. At last,
it seems to be a promise that racing can take to the bank.
Further
details of the government’s new scheme may also form part of the Budget on
16 March, which is also the second day of the Cheltenham
Festival.
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