Dream of levy system reform finally realised

Fair return to the sport's grass-roots now on horizon

Mention of a Legislative Reform Order may not send the average racehorse owner into raptures, but the importance of this statutory instrument should not be lost on any of us.

This system marks the most exciting change in British racing administration in over 50 years

An LRO is the means by which the government is changing the legislation surrounding the levy system so that, from next April, the Levy Board should be making way for a completely new funding structure.

The flow of money from betting operators to British racing will continue to be based on a racing levy but it will be collected by the Gambling Commission and distributed by a new Racing Authority.

As I have said before, this system marks the most exciting change in British racing administration in over 50 years. Combined with the fact that the levy has now been extended to include bets taken by offshore operators (for those bets struck by British-based punters on British horseracing) and you can see what progress our industry has made under this government and its predecessor.

The Racing Authority is made up of equal representation from the Horsemen’s Group, the Racecourse Association and the British Horseracing Authority and its constitution underpinned by a tripartite agreement. Further consolidation of the board has come with Sir Hugh Robertson joining as the independent chairman.

It has, of course, been a much-cherished ambition for many years that the horseracing industry should have responsibility for distributing what it rightly considers to be its own money. At the same time, the statutory system for collection and enforcement will, under the Gambling Commission, remain watertight with appropriate powers of audit over betting operators’ levy returns.

Unlike the Levy Board, the Racing Authority will have no direct input from the government. The new system will increase efficiency and create substantial cost savings as the duplication of functions and layers of administration are removed. Most importantly, it will also remove much of the confrontational element that has so often sullied the relationship between the racing and betting industries.

With this in mind, a Betting Liaison Group will be set up as a sub-committee to the Racing Authority. The group will use data collected by betting operators, racecourses and media rights holders to influence decisions made on race planning and fixture issues with the aim of increasing betting on British racing.

Already the current annual levy is indicating a substantial increase thanks to the annexation of offshore betting.

Based on a 10% deduction on most betting operators’ gross win, levy income is forecast to be £85 million for the fiscal year 2017/2018, a 31% increase on the previous year’s figure of £65m (which included payments from Authorised Betting Partners) and only the third time in the last decade that year-on-year declines have been reversed.

Add to this the huge growth in racecourse media rights payments and racing might soon be looking at an annual income of approaching £250m, although, before we get too excited, the government’s imminent decision on FOBTs, with its possible effect on betting shop numbers, may well cause us to temper this prediction.

We also have to remember that the Racing Authority will be required to take over responsibility for various grants now covered by the Levy Board. These encompass the advancement of veterinary science and education and the improvement of non-thoroughbred breeds of horses. But none of this detracts from the big picture in which the lion’s share of the levy funding will continue to be targeted on prize-money and appearance money ‘for the improvement of racing’.

Industry observers will know how long we have campaigned to achieve reform of the levy system to create a sustainable, enforceable, legally sound way of providing a fair return to the sport’s grassroots from the estimated £11 billion of annual betting on British horseracing.

And now, with prize-money this year due to total £160m, it looks as though we are finally going to achieve this ambition.

Latest from this author