The Department of Culture, Media & Sports (DCMS) has informed that the provisions of the current Horserace Racing Betting Levy will be rolled over into 2017/18 as no progress has been made on the terms of a new levy scheme.
Updating industry and racing stakeholders, Karen Bradley Secretary of State for Culture, Media & Sport announced the government’s decision to continue with the 56th Levy Scheme.
She said: “Having considered the arguments put forward by both betting and racing, I have decided to direct that the current Levy scheme should continue to have effect for 2017/18. In making this Determination I have had regard to the offer made by the Bookmakers’ Committee and taken into account the racing members of the Board’s reasons for rejecting this offer. Any discussions or negotiations about voluntary Levy contributions in respect of offshore remote betting operators are outside the scope of my statutory role in making this Determination.”
In essence the DCMS has laid down these terms just in case it doesn’t hit its own deadline. In last March’s 2016 UK Budget, the government had set out a timetable aiming to replace the provisions of the current Horseracing Betting Levy by April 2017, a target date that DCMS states it is still committed to despite an intense split between UK racing and betting industry leadership.
The Horseracing Betting Levy, which has been in operation since the 1960s is a statutory instrument which essentially transfers money from bookmakers to the racing industry, currently 10% of a bookmaker’s gross profits on the sport. However, it does not cover the increasing share of wagering carried out through offshore-based bookmakers’ websites.
The current levy scheme generates a yield of circa £70 million for UK racing via a 10.75% gross profits tax, however all UK racing stakeholders suggest that levy funds are insufficient, but betting companies point out the amount of funding they provide to the sport via media rights is far greater.
The UK government finds itself in a cross-fire, as betting and racing industry stakeholders refuse to cooperate on terms for new levy provisions, in what has become a public battle with betting and racing leaderships critical of each others’ positions. As the Levy needs to be renegotiated every year with a hard deadline on 31 October, brinkmanship has characterised negotiations in recent times, meaning that quite often the decision has ended up on the Culture Secretary’s desk.
“Having concluded the determination I would like express my disappointment that the HBLB and Bookmakers’ Committee were not able to agree the Levy scheme and that it has been necessary to refer this matter to Government,” Bradley noted in her closing statement.
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