Talking Horses: early review of Levy system is potential funding boost
The British Horseracing Authority hailed what could be a major boost to the sport’s long-term funding on Tuesday evening after the government announced it will review in 2021 the Levy system, which returns money to racing from off-course betting, three years ahead of schedule.
An early review of the system, including a possible extension of Levy payments to cover races overseas, was a key step in the industry’s Covid-19 Recovery Plan, which was published in August. The plan aims to restore stability to racing’s income following huge losses in revenue due to the absence of significant crowds from British tracks since mid-March.
Jockey Club Racecourses alone, which owns major venues including Cheltenham, Aintree, Epsom and Newmarket, is estimated to have lost at least £100m in revenue so far in 2020, while the overall loss to the industry has been estimated at £300m by the Racecourse Association. It could also be several months at least before attendances can return to anything like preCovid levels.
The Levy review could also examine the possibility of returning to at least some element of turnover-based assessment of payments, rather than the current system based wholly on bookmakers’ gross profits from racing bets.
“We welcome the announcement from the minister [Nigel Huddleston] that [the Department of Culture, Media and Sport] will examine in 2021 the timetable for reviewing the Levy,” Nick Rust, the BHA’s chief executive, said. “Racing industry leaders agreed that there was an urgent case for reform as part of our plans to recover from Covid-19 and have presented a united front to government. As the minister outlined in the House today, there are ongoing conversations between the BHA and government on Levy reform. We look forward to working with DCMS officials and ministers in 2021 to ensure that the Levy is sustainable and fit for the digital age.”
DCMS launches review to assess
gambling laws in digital age
What promises to be an extended process to address the many and manifest flaws in the 2005 Gambling Act finally got underway on Tuesday, when the Department of Culture, Media and Sport launched a review of the current regime “to ensure gambling laws are fit for the digital age”.
Issues for consideration once the initial “call for evidence” period ends on 31 March 2021 will include the possible introduction of online stake limits and the extent of gambling advertising and sponsorship in sport. Without pre-judging the outcome, however, it is far from the boldest tip to have appeared in these columns to suggest that the current featherlight-touch regime, which ushered in £100-a-spin FOBTs on every high street until last April and left a great deal of the day-to-day regulation to the gambling firms themselves, is on borrowed time.
How this will eventually affect racing and the punters who provide so much of its lifeblood via the Levy remains to be seen. A ban on betting advertising that did not exempt racing, for instance, would reduce the current multi-million pound value of the sport’s media rights to not a great deal more than zero. If, on the other hand, racing ends up as the only mainstream sport with betting ads allowed, the rights could be worth much more.
Another idea that has received plenty of attention recently, meanwhile, is the introduction of “affordability checks” for online gamblers once their losses in any month reach a certain level, requiring them to prove that they can afford to lose more before they can continue gambling. The figure that tends to be quoted is £100, since it was among the recommendations in a paper published by the Social Market Foundation think-tank in August.
Any proposal that could have an impact on levels of betting turnover is a potential concern for racing. And since there are many punters who can recall losing £100 on the first few races at Cheltenham, never mind the whole of March, the idea that backers could be told “that’s yer lot” with three-anda-half days of the Festival left to run is potentially ruinous for the industry.
Some encouraging news here, though, is that despite plenty of headlines which suggested otherwise back in August, no-one – well, no-one at the Social Market Foundation, at least – is proposing a hard £100 limit on monthly losses unless backers can prove that they can afford to lose more.
“The next day I read in the newspapers, ‘SMF calls for £100 a month limit on gambling’,” James Noyes, the lead author of the report, said on Tuesday, “which I thought was a misrepresentation of a far more nuanced argument.
“It would be a soft cap and not a hard limit, a due diligence threshold that would standardise the point at which intervention kicks in, in terms of the gaming or betting patterns of players. It is a bit like credit cards, if you whack a three-grand purchase on your card on day one, you might get a phone call. But over time, a relationship is established on patterns of spend and there’s a great degree of freedom.”
There will, of course, be some voices in the coming debate calling for a new level of regulation in the gambling sector so strict that it borders on legislative prohibition. Racing will need to be ready to fight its corner, and do so with specific reference to betting rather than gaming products such as roulette and online slot machines, which have been responsible for much of the current attention on gambling regulation.
“The key thing for people in the racing sector to be reassured about,” Noyes says, “is that everyone I have spoken to understands the long-standing importance of horse racing to a range of cultural, social and economic traditions in this country. No-one wants to adversely affect horse racing and everyone understands that betting is an integral part of horse racing and is very different from casino play, and especially online casino play.”