British Racing welcomes Government’s announcement to deliver a new funding model by April 2017

03 Mar 2016 Financial/Political
  • Replacement for Horserace Betting Levy to be introduced by April 2017 to replace the current Levy system, paving the way for a brighter future the sport
  • New legislation gives Racing rights to funding from offshore bookmakers who take bets on the sport
  • Will stem Levy leakage more quickly
  • Longer-term, will lead to greater financial security, a platform for growth, a boost to participants and more certainty for 85,000 livelihoods
  • Meets British Racing’s requirements for a new funding model
  • Racing remains focused on addressing potential funding gaps in 2016 and 2017 by building on its Authorised Betting Partner initiative.

The British Racing industry today welcomed the Government’s announcement in Parliament that it will fast-track a replacement for the Horserace Betting Levy for introduction by April 2017. The scheme will replace the current Levy system, which was first introduced in 1961, and close the significant loophole which has allowed some operators to avoid making any contribution to the sport from the increasing amount of remote and offshore betting.

This significant and historic development means a brighter future for horseracing and will provide a strong platform to grow our sport in partnership with betting operators. It is excellent news for the 85,000 people who earn their living from Racing, for the millions of people who enjoy the sport, and for all those equine activities which touch the lives of so many people across Britain.

The new funding mechanism, which the Government aims to introduce by April 2017, will ensure that all bets placed on British Racing by a British-based customer will now fall under its scope, whether they are placed in a retail betting shop or remotely, ensuring a fair return to the sport.

It will restore to Racing a fair contribution from all betting operators that has been lost as a result of the shift towards remote and offshore betting.

While this is very welcome news, in the short term, British Racing still faces the prospect of shortfalls in funding before the new arrangements take effect, with further potential leakage in the Levy this year. As a result, Racing is committed to building on its ABP initiative to smooth the transition to the new funding model and to maintain the current level of Levy funding.

Nick Rust, Chief Executive of the British Horseracing Authority (BHA), said:

“Today’s announcement is one that should prove truly historic. The new funding model will ensure a fair transfer of funding to British Racing based on all betting activity on the sport – a link that was first established in law in 1961. It meets all of Racing’s requirements for a new funding model and can bear fruit in 2017, which is crucial given the significant Levy cliff we face.

“In the longer term, this means greater financial security for the sport, a platform for growth, a huge boost to our participants and more certainty for the tens of thousands of people who rely on Racing for their livelihoods.

“We look forward to working with Government on the details of these proposals and to make sure the implementation timetable they have announced today is achieved.

“We now have a great opportunity to bring together Racing and Betting in tackling the sport’s funding issues for the benefit of all parties, and this is something that we are actively pursuing. We want to focus the joint efforts of Racing and Betting on innovation and growth in the sport as a betting product.”

Philip Freedman, Executive Chairman of the Horsemen’s Group, said:

“Horsemen will be delighted by the announcement that Racing will get rights to funding from offshore bookmakers by April 2017. Restoring Racing’s income from betting to the levels intended by previous Government determinations, before so much betting had migrated off-shore and outside the scope of the Levy, is an essential step in growing the industry to the benefit of both Horsemen and betting operators.”

Stephen Atkin, Chief Executive of the Racecourse Association (RCA), said:

“The Racecourse Association warmly welcomes Government’s announcement as a critical moment for the sport and an important development for all of our members. Once implemented, this will provide much needed stability and an incentive to both racecourses and horsemen to invest in the sport for the long-term. We look forward to working with our colleagues in Racing and Betting as well as the Government to help implement this decision.”

Notes to editors:

1. Parliamentary Question

The Parliamentary Question, lodged by Chris Green MP (Con, Bolton West), and the Answer by John Whittingdale MP, Secretary of State for Culture, Media and Sport, were as follows:

“The British Horseracing industry has an economic impact of three-and-a-half billion pounds a year, with Aintree and Haydock being really popular racecourses for my constituents.

“Can my right honourable friend confirm the date when he plans to require offshore bookmakers to make a financial contribution to racing, as those based in Britain already do?”

“My honourable friend is absolutely right to draw attention to the importance of horseracing to this country. I can tell him that our aim is to introduce a new funding arrangement for British Racing by April 2017.

“We will create a level playing field for British-based and offshore gambling operators and ensure a fair return from all bookmakers to racing, including those based offshore.

“Racing will be responsible for making decisions on spending the new fund and we will be making further announcements shortly.”

2. Q&A

Q: Has the Government delivered its 2015 Budget commitment?

A: Yes, we are confident that today’s announcement means that the Government has delivered the commitment it announced at Budget 2015. It meets all of our requirements for a new funding model – one that it is fair, sustainable, enforceable, legally-sound and removes Government from the process of administering it.

Q: Will the new legislation require EU approval?

A: We understand that any new legislation to replace the Levy, whether taking a primary or secondary legislative route, will require State aid approval. We are confident that this will be achieved as the European Commission has already set a precedent in approving the French parafiscal levy in 2013.

Q: How much extra money will this raise for British Racing?

A: We are delighted that the Government has said that the new legislation will ensure a fair return from all bookmakers to racing, including those based offshore.

We understand that the Government will make further announcements on the rate in due course.

Q: How will the additional funds be distributed?

A: Funds raised under this new model will pass to Racing to determine how the funds are spent within the sport.

Q: What does this mean for Racing’s Authorised Betting Partner policy?

A: British Racing introduced ABP as in interim measure to address falling income from the Levy prior to the implementation of the Racing Right. It is essential that we build on the progress we have already made with ABP. We are continuing discussions with bookmakers regarding the ABP policy.

Q What does this mean for bookmakers?

A: This announcement creates more certainty for Racing and Betting and should pave the way for constructive dialogue on the future opportunities the sport offers. We want to work in partnership with bookmakers to grow betting on the sport. The relationship between Racing and Betting is a symbiotic one which benefits both parties.