The abolition of the Levy system, which has returned money to racing from off-course betting for more than half a century, moved a significant step closer on Wednesday when George Osborne, the chancellor, used his budget speech to announce that the government intends to introduce a Racing Right under which bookmakers will pay for the right to accept bets on British racing.
The creation of a Racing Right has been an ambition of the British Horseracing Authority for several years, as the growth of online betting has seen many major gambling firms relocate offshore, where they can avoid both betting duty and the Levy obligations that would attach to cash bets on the high street.
The government has recently moved to tax online bets on a “point of consumption” basis, and a Racing Right would, in theory at least, force offshore firms to pass a proportion of their racing profits back to the sport.
The chancellor’s announcement was made just six days after the conclusion of a consultation period on the proposed new right. “In the week after [the] Cheltenham [Festival],” Osborne said, “we will support the British racing industry by introducing a Racing Right.”
The proposed scheme is believed to enjoy support on both sides of the house, encouraging racing administrators to believe that the necessary legislation will be introduced regardless of the outcome of the general election in May.
Clive Efford MP, the Labour spokesman with responsibility for racing, recently wrote to Helen Grant, the sports minister, to offer his own support for the right, which according to the budget document “will be administered directly by the racing industry”.
The BHA was quick to welcome the chancellor’s statement. “Today’s announcement is a welcome and tremendous boost for the tens of thousands of people across the country that derive their livelihoods from our sport,” Nick Rust, the authority’s chief executive, said.
“The government, the minister for sport and tourism, Helen Grant MP, and politicians from the major parties all recognise the importance of a fair and sustainable funding mechanism for British racing. British racing has a collective desire for a modern and direct relationship with the betting industry, and believe that a Racing Right is the best solution to achieve this, and to secure the long-term prosperity of our sport and those within it.
“We are still in the situation whereby the vast majority of bets placed by punters outside of betting shops are making no contribution to the central finances of the sport. This is unsustainable, and there is recognition that this needs to change.”
However, the Association of British Bookmakers, which represents the overwhelming majority of high street bookmakers, suggested in a statement on Wednesday that the plan would prove to be “unworkable”.
A spokesperson for the ABB said: “Unfortunately, we believe the Racing Right is unworkable and the detail will derail it, leaving racing seriously underfunded for a considerable length of time. It will be mired in legal and other issues for many, many years.
“Arguably, the proceeds from the right will not even be able to be distributed until legal certainty is obtained, with racing being the main loser.”
Matthew Hancock MP, whose constituency includes Newmarket, has been a leading proponent of the Racing Right for several years.
“This is a once-in-a-generation transformation which will trigger significant growth, jobs and international investment,” Hancock said. “I now look forward to seeing the details of the legislation and to a more secure future for our golden sport.”
