News broke yesterday that a deal to determine the amount British bookmakers will contribute to the horse racing industry was expected to be struck ahead of Monday’s midnight deadline.
After 12 hours of furious negotiations, and fifteen minutes before the midnight deadline, an agreement was reached. Britain’s bookmakers will provide £72.4 million to UK horse racing under the 51st annual levy scheme.
William Hill, Ladbrokes and Gala Coral—Britain’s three largest bookmakers—together guaranteed £45 million and Betfair committed to provide £6.5 million. The remainder will be contributed by smaller bookmakers and independents.
Nick Rust, managing director of Ladbrokes, commented: “This is a sensible compromise that offers progress to both racing and bookmakers. Racing gets a Levy increase and a guaranteed underpin on funding; bookmakers get more cooperation on fixtures.
“We now need to start work immediately on a long-term settlement that builds on this progress and takes Government out of the process for good.”
However, Paul Roy, chairman of the British Horseracing Authority, said: “The sport does have a degree of certainty moving forward, and can immediately finalise the 2012 fixture list, but our return from the betting industry remains far lower than our commercial value, and the levy remains unreflective of the modern betting environment.”
Britain’s horse racing industry is paid the levy (based on a percentage of the gross win made on the sport) by bookmakers like Ladbrokes and William Hill each year.
The two industries negotiate the level of the payment and, if an agreement cannot be reached, the government intervenes. Last year, the government instructed bookmakers to cough up 10.75% of their gross profits to the horse racing industry, up from the usual 10%.
The overall amount paid to the racing industry has dropped in recent years as bookmakers have moved their operations offshore and, as result, have avoided the levy on British horse races. According to reports, the government is consulting with both sides in hopes of establishing a viable alternative to the levy for the future.
“No one involved in our sport should be in any doubt of the need to radically overhaul or replace the Levy,” added Roy.