Addition of online gambling firms to UK horse racing levy boosts racing industry coffers
News on 9 Jun 2018
News on 9 Jun 2018
Friday’s acceptance by the British Horse Racing Authority of the new horse racing levy, which now includes mandatory 10 percent revenue contributions from online gambling firms taking bets on horse races, is likely to boost the Association’s coffers from the previous scheme’s GBP 54.5 million (2015-16 figures), to a 2017-18 benefit that could be as high as GBP 95 million.
To handle this large annual financial harvest, the Association plans a new entity with responsibilities that include oversight of the levy’s distribution, effective April 2019. This body will replace the dismantled Horserace Betting Levy Board.
However, industry analysts have warned that the recent radical chop in maximum betting stakes on Fixed Odds Betting Terminals in high street betting shops will also indirectly impact the horse racing business due to the inevitable reduction in betting company revenues (and therefore the contribution to horse racing) that will follow a need for some retail belt-tightening.
That could extend to online gambling firms if the government tries to recover the tax revenue lost to the FOBT reductions by hiking taxes on internet operators.
The British Horse Racing Association is aware of this danger and voiced its concern over too deep a cut in FOBT stakes earlier this year, citing the consequent erosion of betting companies’ revenues that, ultimately, would impact the amounts paid to discharge levy obligations.
The UK government responded by noting that it was prepared to work with the BHA on a proposal to expand the UK-centric criteria for paying the levy to a more global system where British bookies accepting global racing bets would be expected to include these revenues in calculating their racing levy contributions.
The BHA estimates that such a move could cost UK bookies an additional GBP 15 to GBP 20 million annually, and has toyed with the idea of attempting to persuade government to change the levy criteria from 10 percent of revenue to a percentage based on turnover in order to keep its levy coffers filled.
