BOOKMAKERS’ REFUSAL TO NEGOTIATE COMMERCIAL TERMS TO REPLACE THE LEVY LEADS TO BREAKDOWN OF LEVY TALKS

01 Nov 2001 Pre-2014 Releases

BHB deeply regrets that it was unable to reach agreement with the betting industry on a levy and commercial deal by last nigh4_x0019_s levy deadline. The only formal offer on the table at the end of the discussions was a one month levy deal for April 2002. We fully support the Levy Board in rejecting this recommendation.

At the start of the process BHB was advised by the Levy Board Chairman that the betting industry was looking to secure a satisfactory comprehensive settlement covering the levy and the commercial mechanism of pictures and data. The BHB Board unanimously approved this principle at its 11th October Board meeting and immediately advised the Levy Board.

However, it quickly became clear that the betting industry had decided not to reach an agreement over the commercial mechanism, and it asked the BHB to set aside data charges for two years, despite the fact that BHB had been requested by Government to introduce a commercial replacement for the levy as soon as possible.

The betting industry made it clear that, during the two-year period, it was not prepared to pay anything for data. The data clearly has value, and BHB is clearly entitled to charge for it. Additionally, BHB’s advisers told us that acceptance of the condition that no charge be made for the data could severely jeopardise BHB’s ability to establish an effective pricing structure in other jurisdictions and lead to further legal challenges. In economic terms, agreement to this condition could have cost Racing up to £30 million per year in overseas income.

BHB therefore urged the betting industry to negotiate and agree the commercial price for pictures and data while everyone was in the same room and made a very generous proposal for the first two years which would have cost the betting industry about £130 million per year; previously the betting industry have claimed that BHB’s pricing policy would cost them £250 million. Furthermore, BHB gave a firm undertaking that payments to the Levy could be offset in full against commercial liabilities and that no additional payments would be expected during the two-year period. These offers were turned down and the betting industry refused to put in any counter offer despite being invited to do so.

It became very clear that the betting industry is not prepared to negotiate and agree commercial terms for the replacement of the levy until after the OFT and European Court of Justice rulings, yet it has consistently attacked BHB for not negotiating the price of those commercial terms. Last night proved conclusively that it is the betting industry which refuses to negotiate.

BHB owes it to Racing to ensure that, in the post-levy commercial environment, the industry secures a proper price for its quality product. We are dismayed that, despite our flexible approach throughout the discussions and the valiant efforts of Rob Hughes to move negotiations forward, an attempt has been made to hinder progress towards the Government’s goal of a commercial replacement for, and abolition of, the levy. We remain determined to press on with the implementation of BHB’s policy for direct licensing of pictures and data.

For further information please contact BHB Communications Manager, Alan Delmonte on 020 7343 3318, or via: info@bhb.co.uk