Racing dealt another ‘hammer blow’ as DCMS refuses levy review

The Daily Mail has reported that the UK racing industry has been dealt another ‘hammer blow’ after the government has refused to review the duties and timetable of the Betting levy. 

The newspaper cited a letter from DCMS sports minister Nigel Huddleston, who claims that he has ‘made it clear’ that a review of levy terms will not form any part of the government’s planned reform of the 2005 Gambling Act.

Having carried out an assessment of COVID damages to UK racing, the British Horseracing Authority (BHA) had requested that DCMS undertake an early review of levy duties by bookmakers as part of its pending review.

DCMS initially replied that it would ‘re-evaluate the timetable for reviewing the betting levy’, a decision which was welcomed by outgoing BHA chief executive Nick Rust.

Currently, UK bookmakers pay a 10% levy on profits which is used to support the racing industry. However, the BHA – backed by UK’s racecourses – have called for betting operators to pay the levy based on turnover.

The BHA had issued its demand as a key measure of its ‘COVID-19 Recovery Plan’ which was published last August alongside The Horsemen’s Group and Racecourse Association (RCA).

Racing stakeholders had projected that a further winter lockdown would result in losses of approximately £300 million for the sport, with key resources such as racetracks, stables, animal welfare and workforce requiring immediate economic assistance.

As reported by The Daily Mail, Nigel Huddleston has written to BHA Chair Annamarie Phelps, clarifying the DCMS offer to review the Levy this year – and stating that the department’s intentions only focused on ‘bringing forward the timetable for the review of the levy due in 2024’.

DCMS is reported to have declined the BHA’s order as levy reforms had generated yields of £97 million during the 2019/2020 season, generating racing more income than anticipated.

Furthermore, despite accounting for Covid impacts, the 2020/2021 levy yield is forecast to be at around £80 million, with betting contributions remaining strong despite racing during the year. 

“We have considered your requests very carefully, but the evidence suggests that the 2017 reforms do not need to be revisited at this point,” Huddleston’s letter read.

“The levy performed very well against expectations last year and is forecast to hold up well this year in spite of two months without racing. Levy yield in 2019/20 was £97m, higher than the upper estimate of £92m, and the forecast for 2020/21 is £80m, with racing being able to resume a month earlier than originally expected.”