The British Horseracing Authority pointed to the government’s “clear and unambiguous” commitments to the sport on Wednesday as it effectively shrugged off a claim that the sport could receive only £10.4m in direct funding from the betting industry when – or if – the Levy system is replaced next year. The BHA also said it remains confident that the proposed start date for the new regime of 1 April 2017 will be achieved, despite widespread fears that Brexit could delay the process on both sides of the Channel.
Racing hopes, and expects, to receive at least £100m annually in direct funding from bookmakers when the Levy system, which has returned money to the sport from betting for more than 50 years, is finally abolished. The claim that it could in fact be little more than £10m was published in Wednesday’s edition of the Racing Post, and is taken from a report commissioned by the government and compiled by Frontier Economics, a consultancy firm.
About two dozen copies of the report were circulated to key industry stakeholders, including a number of bookmakers’ representatives, this month. According to the Post’s report, it examines a number of possible models for the new funding system, including an extreme case in which the bookies’ payments for media rights – such as live broadcasts of racing in betting shops and online – are taken into account, along with their racing sponsorship programme. That would, in the economists’ opinion, leave only £10.4m to be raised directly from betting.
The Levy system dates back to the legalisation of off-course cash betting in the 1960s and the decision to replace it follows the shift in recent years towards online gambling in offshore locations, beyond the reach of the Levy Board.
The annual Levy yield averaged more than £100m before the betting industry’s move offshore, without taking subsequent inflation into account, and while maintaining its line of refusing to comment on a leaked report, the BHA made it clear on Wednesday that it remains confident its £100m target figure is realistic.
“We are working on the unambiguous and repeated government commitment that it will restore to racing a fair contribution from all operators, which has been lost to racing simply because of the shift towards offshore remote betting,” Will Lambe, the BHA’s director of corporate affairs, said.
Referring to the timetable for introduction of the new funding regime, Lambe added: “The replacement of the current Levy is on track to take effect from April 2017. Work within racing is at an advanced stage on various fronts, including the formation of the Racing Authority to distribute the enhanced funding.
“Our own direct discussions with the European Commission have been very encouraging, including since the referendum, and we have had confirmation that this case has clear precedents, most recently in France, and will be dealt with as promptly as possible.”
While the precise details of the Frontier Economics report remain confidential, the Post’s report suggests that it made some extreme, indeed almost grotesque, assumptions to reach its figure of £10.4m.
These include an analysis of high-profile racing that the economists believe would “still take place without off-course betting” and seems to ignore the vast supply chain, including maidens, novice events and other lower-grade races, that underpins the major events. Regulatory, integrity and welfare expenditure are only a few of the other essential costs that seem to have been ignored.
It is inconceivable that top-level racing could survive without off-course betting turnover feeding money into the system and any prediction based on an assumption that it might is one that can be safely ignored.
