Call for Business Model Changes by UK Racing Leaders

British racing leaders “are seeking an overhaul of the current business model, which has seen a declining commitment from the bookmakers to racing thanks to both technology changes that have allowed internet wagering & betting exchanges to flourish and operators to move offshore” reported

The British model relies on a government-determined levy that requires bookmakers to pay a percentage of their race-wagering profits into racing. In a letter to John Penrose, Minister for Tourism & Heritage for the Department for Culture, Media & Sport (which determines the Horserace Betting Levy rate) industry leaders documented a dramatic fall in money generated by the levy of 44% from between 2007 and 2011.

The letter called for replacing the levy with a completely new system that ensures bookmakers and  betting exchanges return a fair share to racing. The letter, signed by leaders from the British Horseracing Authority, The Jockey Club, The Horsemen’s Group and  three leading track owners, noted: “We are very doubtful that simply reforming the levy is likely to deliver a stable and/or fair relationship between the racing and  betting industries in the long term, as the levy appears unable to deal with the two principal challenges, namely the advent of online operators based offshore and the emergence of betting exchanges.”

The bookmakers themselves agree the levy should be ended and the Association of British Bookmakers is calling for the 50-year-old levy to be ended in 2014 and replaced by commercially-negotiated agreements between bet takers and racing”. ABB chief executive Dirk Vennix commented: “Under the ABB’s proposals, the horse racing and betting industries would have 3 years to set up and negotiate a long-term commercial deal on the core program of races. As set out in our submission, this should never be underpinned by an intellectual property right owned by a sports body, but rather be a process of negotiation and contract between horse racing and betting.”

The input follows a call earlier this year for “Ideas on the future of the levy” from the Department of Culture, Media and Sport.

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