Financial hammer blow for horse racing

Racing suffered another significant financial setback yesterday with the government rejecting the industry’s request to launch a formal review of the gambling levy this year.

in a letter to annamarie Phelps, the chair of the British Horseracing association, sports minister nigel Huddleston made clear that increasing the rate of the levy above the ten per cent of profits which bookmakers are obliged to pay to racing will not form part of the government’s current review of the 2005 gambling act.

The reluctance to look again at bookmakers’ payments to racing is a major blow to a sport that projected losses of more than £300million due to covid-19 before the pandemic’s second wave, which due to the prolonged absence of crowds has exacerbated their financial suffering. The demand for an early review of the levy, which was not due to be considered until 2024, was a key part of racing’s covid-19 Recovery Plan published last august. The BHa and racecourses are calling for gambling operators to pay a levy on turnover rather than profits, and also want a cut of bets that are placed on overseas races.

The UK government have considered these requests, but concluded there was no case for a review of the levy last year, with

Huddleston seeking to clarify their position in a letter to the BHa sent yesterday. The timing of the next review could still be brought forward from 2024, but Huddleston’s letter suggests the government are reluctant to do so. ‘i’m aware some stakeholders have reported that, during the statement, i made a commitment to review the rate of the levy itself in 2021,’ Huddleston wrote to Phelps (left) yesterday. ‘We intend to look again at whether there is a case for bringing forward the timetable for the review of the levy due in 2024. We did not feel there was such a case on the basis of the evidence you put forward last year.

‘You have regular discussions with my officials and any new evidence which you are able to provide will be relevant for any reconsideration of your previous request for an early review.’

in an earlier letter from Huddleston to Phelps sent last October, the government outlined their reasons for opposing levy reform, arguing that with a yield of £97m in 2019/20, the betting pool was generating far more income for racing than had been forecast. Even allowing for the impact of covid-19 and last year’s three-month sporting shutdown, the levy yield is forecast to be £80m for 2020/21 due to the fact that betting revenues remain strong.

‘We reformed the levy in 2017, fixing the rate at ten per cent and including overseas operators for the first time,’ Huddleston wrote to Phelps. ‘We have considered your requests... but the 2017 reforms do not need to be revisited at this point.’

The BHa insisted yesterday that Huddleston’s letter was not a fresh setback on the grounds that the government will still consider altering the timetable for the next levy review.

‘in December, DcMS announced their intention that in 2021 they would re-examine the timescales for reviewing the Horserace Betting Levy, which is currently not due for review until 2024,’ the BHa said in a statement.

‘We welcome this commitment and look forward to continuing our dialogue with government.’