British politicians mulling expanded levy on gambling
News on 24 Jul 2014
News on 24 Jul 2014
Opposition Labour Party politicians in the UK are reportedly planning to extend the current horse racing levy paid on horse racing bets taken by bookmaking companies to retail and online sports betting in general, raising millions which they plan to spend on social projects associated with problem gambling and grass roots sports development.
The Guardian newspaper reports that the proposal is set out in a new “sport for all” paper authored by Harriet Harman, the shadow culture secretary, and Clive Efford, the shadow sports minister.
A levy on all sports betting could raise a significant amount of money; the horse racing levy, for example, came in at around GBP 82 million this year.
“We believe it is right that businesses that make money from sport should contribute to sport,” said Efford this week. “We are consulting on whether we should introduce a levy on betting, including online betting, to fund gambling awareness and support for problem gambling but also to improve community sports facilities and clubs.
“It’s my preference that the income from the levy went into a general pool to help grassroots sport and from which the respective sports would draw their future elite sportsmen and women. Football gambling online and in betting shops is now far larger than horseracing gambling and yet it does nothing to help the sport itself. I think they have a moral obligation to help the industry from which they make billions, and the results could be dramatic.”
The UK gambling industry overall generated revenues after winnings were paid of around GBP 6 billion in 2012-2013, and sports governing bodies are likely to support the Labour move as a source for more funding.
But the gambling industry claims that it already pays substantial taxes on its profits along with the horse racing levy, and further financial demands are unreasonable and could be counter-productive.
On the question of operators accessing the UK punter but based offshore, Efford says that the new point-of-consumption tax and licensing regime about to be introduced in Britain will simplify the problem of ensuring that online operators are included in the proposed sports levy.
Gambling companies are not the only ones in Labour’s sights; Efford says that Premier League football should also be forced to return to its previous obligation to ensure that a 5 percent voluntary levy of its income from domestic TV rights is ploughed back into grassroots sport.
Efford said income from domestic football rights had risen by 75 percent in recent years, but instead of the Premier League helping the development of grassroots football, much of the money was going in parachute payments to relegated clubs or in straight donations to Football League clubs.
Domestic broadcast deals will generate about GBP 3.4 billion over the three seasons from 2013-14 for Premiership clubs, The Guardian reports. Overseas broadcasting rights covering more than 200 territories will generate a further GBP 2.2 billion.
The Premier League and FA Facilities Fund, managed by the Football Foundation, says it commits GBP 34 million per year to improving Britain’s grassroots football facilities. This includes GBP 12 million a year each from the FA and Premier League, and GBP 10 million from the government.
The Conservative Party, a member of the ruling coalition government in the UK, has shrugged off the Labour proposal, saying:
“This is yet another short-term gimmick from Labour. It is a tax on football fans which will mean higher ticket prices for ordinary people wanting to watch our national sport.”
