by Renee Israel
UK gambling companies have agreed to contribute £73 million for next
year's horse racing in Britain. They have also agreed to adhere to the terms
and conditions of an annual levy system, which everybody feels is badly in need
of reform and updating.
Tough Times for UK Horse Racing
The annual levy was launched half a century back with the intention of making
sure that bookmakers contributed financially to the horse racing sport and put
up funds to generously reward owners of winning race horses. Although the
largest amount contributed so far was £100 million, the amount has been
decreasing of late because most offshore online bookmakers feel that they do not
need to contribute anything to UK's horse racing industry.
According to the annual levy deal for 2013 - 14, bookmakers are required to
contribute 10.75% of profits raked in through British horse racing. Britain's
largest bookmakers Gala Coral, William Hill, and Ladbrokes will be contributing
as much as £45 million. Betfair, the prestigious betting exchange, has agreed to
pay around £7 million and smaller betting companies will put in their own
contributions.
Paul Lee, chairman of the Levy Board, said that these contributions will make
the horse racing industry more stable, as a result of which prizes can be
increased in 2013.
"We believe William Hill/GVC will probably not get close enough to
Sportingbet's price ambitions," said Jones.
Reform of the Annual Levy System
The gambling and racing industries are now mulling over shifting to the
traditional commercial model, in which bookmakers will take care of the
multi-year funding in exchange for a specific number of horse races and runners.
Horse racing is the second most popular sport in Britain. Last weekend, the
flat season came to an end with Frankel winning the Champions Stake. Although
horse owners say that things are getting tougher for them, winners are demanding
larger prizes. Government intervention will be required if an agreement
regarding the annual levy cannot be reached by October end.
Though unusual for such an agreement to be reached at short notice, the horse
racing industry considers it to be a sign of better relationship between the
racing industry and the betting industry.
Stating that flaws remain in the existing levy system, British Horseracing
Authority CEO Paul Bittar said, "We look forward to government progressing its
proposals for a long-term, enforceable replacement for the Levy in line with its
commitments."
