Horse Racing Revenue RulingJake Cooper | 30 Jan 2017
A long-standing dispute between UK bookmakers and the British Horseracing Authority has now attracted government attention. UK government authorities have made moves to address the disagreement by replacing the current voluntary betting system with a new system that demands a mandatory contribution of revenues.
The new system requires 10% of all revenues brought in by UK-based bookmakers to be contributed, and specifically revenues generated by UK bettors. The levy in question has been designed to come into play after a bookmaker has earned their first £500,000, both online and through retail bookmaking offices.
UK Minister Announces New Levy Board
UK officials, including Tracey Crouch, the Minister for sports, tourism and heritage in Britain, have just announced the new levy. Crouch noted that the levy will be implemented in April this year, whereupon all bookmakers and horse race betting companies will fall under the new taxing system.
In addition to this, the current Levy Board is to be disbanded early next year. Crouch has revealed that the UK Gambling Commission will be awarded the sole responsibility of claiming the fees from each UK bookmaker that falls under the levy, along with any other companies that offer horse race bets to UK punters. The new Racing Authority committee will distribute the levy income that will result from the new system.
Before the levy system can be passed, however, the European Commission must first ratify it. This process will determine whether the resultant income can be classified as ‘state aid.’
Major UK Bookmakers Voice Concerns
The 10% levy is more than many gambling companies were willing to pay, being at the upper end of the spectrum when it comes to the betting industry. The UK government has estimated that the levy will bring in over £90 million a year for the local horse racing industry, which has been battling in recent years.
Crouch added in her statement that the government will be reviewing the levy after 7 years to determine its fairness and whether or not it has successfully revived the horse race betting industry in the UK. Changes in the future market may also negate the need for such a substantial tax.
The British Horseracing Authority has endorsed the compulsory levy, with its CEO stating that it will restore racing returns at a “fair and proportionate rate.” Major bookmakers, however, have been less enthusiastic, including well-known betting brands like William Hill and Ladbrokes.