Bookmakers do not hold all the cards in levy fight

There is currently a wall of silence around the most important negotiation that this industry will have for a decade: how much bookmakers should pay back to horse racing.

Imagine the following hypothetical scenario and decide who you would back to be the winner in this contest: one of the combatants is fatally divided into a flock of doves and a few lonely hawks, while the other negotiating party comprises ruthlessly single-minded, disingenuous sharks who some consider to have stepped over the line from being tough business negotiators to mafia-style hoodlums. Both sides are fighting it out under the watchful eye of the media, which seems reluctant to criticise the sharks because it does not want to lose their advertising spend.

It is, however, an exaggeration to say that racing is now fighting for anything other than a paltry offer because the doves are driving out the hawks in the face of opposition that is overwhelming them.

The doves are erroneously arguing that any deal is better than no deal. But nothing could be further from the truth, because any agreement now will be left in place by the next government, possibly for eight years.

There are arguments on both sides of the fence as to what percentage of bookmakers’ profits should be paid back to racing; the current rate is 10 per cent of profit.

The real issue, however, is whether the bookmakers should have to pay racing a levy on bets they take on foreign racing, as happens in all other major racing jurisdictions.

Should the Government sanction such a change, which would be worth in excess of £15-20million per annum to British racing and the jobs and tax revenues it creates, the bookmakers have threatened to demand a judicial review as to the legality of that decision. So extreme is their position, they will not even consider a reduced rate.

It is hard to think of any other industry where imported goods are not subject to import levies while the very same goods created in this country are subject to one. In fact, it is normally the other way round.

Given the current iniquitous status quo, bookmakers will obviously promote foreign racing to their punters more enthusiastically than British racing whilst they keep 10 per cent more of the profit.

The bookmakers think they are holding all of the cards in this game, but they have forgotten one. There are some very senior former government ministers who have the best interests of racing at heart. Not only are they about to leave politics, and so are happy to swing the bat, they are also still well respected in Washington.

The holy grail now for the big UK betting operators is the opportunities opening up in the United States. But to get licences there, bookmakers will have to be deemed desirable and law-abiding. Keeping their noses clean with the UK regulator is precisely why bookmakers have recently been implementing affordability checks over and above that demanded by the Government.

How will it play out for the bookmakers if respected British politicians are doing the rounds in Washington asking US regulators why they want to do business with those who will be happy to take legal action against them? Why would they want to grant licences to bookmakers who have a bad working relationship with horse racing, but have built businesses on the back of the sport?