The British government has announced that the existing horseracing betting levy will in April be replaced by a new system that will require betting operators to return 10 per cent of their gross profits generated from bets placed on horseracing back to the sport.
The move, which is set to become effective on April 1, ensures that any betting operator – including online firms that are not based in the country – that takes bets from consumers based in Britain on domestic races will pay 10 per cent of their gross profits from racing, above the first £500,000 (€569,000/$603,000) they make, to aid the sport’s growth in the country.
The existing levy has been in place since 1961. Under the current system, offshore online betting businesses that take bets on British racing are not required to contribute to the sport, although some do make voluntary contributions. The new levy scheme, which includes pool betting, betting exchanges, on-course bookmakers and on-spread bets, is subject to state aid approval from European regulators.
The money generated will help provide greater prize money and will also support funding in other fields such as integrity, equine welfare, veterinary science and the mental and physical wellbeing of participants. The Racing Post newspaper said the new regulations are set to take the return to the sport to around £90m per year. In contrast the last statutory levy scheme raised £54.5m.
“This move will help secure the future of horseracing in Britain by making sure that gambling firms pay a fair return to support the sport,” Sports Minister Tracey Crouch said. “Horseracing has a strong heritage in this country, employing thousands of people and is enjoyed by many almost every day of the year. This new approach to the horserace betting levy will help sustain and develop the sport.”
Nick Rust, chief executive of the British Horseracing Authority, welcomed the move. “This is critical to the future health of British racing,” he said. “Once the new system is implemented in April 2017, we will see a significant uplift in the sport’s central funding that will benefit our participants and the many local communities which racing supports across all corners of the country.”
The Sports Minister will review the rate set within seven years of the legislation coming into force to ensure that it reflects any future changes in the market. The government confirmed its intention to transfer responsibility for collecting the levy to the Gambling Commission in early 2018 in a move that will lead to the horserace betting levy board being wound up.
The levy funding will be passed on by the Gambling Commission to a nominated racing authority, which will act on behalf of British racing and will be responsible for making spending decisions.