UK Government moves to implement reformed UK Racing levy

The UK government has moved forward with plans to reform UK racing’s levy, which will see the introduction of mandatory contributions from all betting operators that take bets on the sport, regardless of channel.

This weekend, UK Sports Minister Tracey Crouch confirmed the government’s plans, which will see licensed betting operators charged a 10% fee on gross profits from wagers on UK racing from British consumers.

The 10% charge has been set for profits ‘above the first £500,000′ generated by operators from UK racing markets.

Declaring its industry reforms to the ‘Horserace Betting Levy’, the UK government stated that its all-round tax charges were necessary in order to ‘help secure the future of horseracing and ensure a fair return for the sport’.

At present, the current levy format generates UK racing circa £70 million from a 10.75% charge on retail wagers. However, stakeholders have been acrimoniously split on the issue as racing directors have argued that levy funds are insufficient, but betting companies point out the amount of funding they provide to the sport via media rights is far greater.

The current Levy scheme compels betting shops to pay into Levy by law, and although online sportsbooks are not required to provide money to racing, several do on a voluntary basis. The sport also put the squeeze on online bookmakers last year by introducing the ‘Authorised Betting Partner’ status, whereby only the bookmakers that the BHA considers to be paying a ‘fair amount’ to racing can sponsor races.

Issuing an industry update, Tracey Crouch MP commented: “This move will help secure the future of horseracing in Britain by making sure that gambling firms pay a fair return to support the sport. Horseracing has a strong heritage in this country, employing thousands of people and is enjoyed by many almost every day of the year. This new approach to the Horserace Betting Levy will help sustain and develop the sport.”

Closing her statement Crouch detailed that the reformed levy would be reviewed ‘within seven years of the legislation coming into force’. From 2018 the UK Gambling Commission will be in-charge of collecting levy charges from licensed bookmakers.

The levy funding will be passed on by the Gambling Commission to a nominated Racing Authority, that will act on behalf of British racing and be responsible for making decisions on spend.

This isn’t the first time that a ruling government has attempted to reform the Levy, however any changes to the Levy Scheme threatens to contravene European State Aid laws. It remains to be seen if this attempt is more successful.

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