Betting partner scheme "draconian", says Coral boss

Coral has ruled out signing up to British Racing’s controversial authorised betting partner (ABP) programme in its current form, with the operator’s chief exec Carl Leaver describing the scheme as being both “draconian” and “unsustainable”.

In a letter to horseracing trade publication the Racing Post, Leaver set out the operator’s case against the 7.5% levy on digital UK horseracing profits, which comes in addition to the 10.75% already levied against bookmakers’ land-based businesses.

According to Lever, the new ABP scheme, which sees non-members blocked from striking commercial agreements with participating racecourses and events, has been introduced at the same time Coral’s UK racing costs have been on the rise.

The CEO said the bookmaker’s associated costs, which include the land-based levy, media rights and sponsorship, had increased by 45% to ?48m over past seven years, during which time gross win from the sport, including online, had fallen from ?152m to ?124m.

“In other words, across both retail and online, Coral is now paying 45% more for a product that has declined by 19%,” Leaver said.

When excluding online, costs associated to UK racing accounted for more than half (54%) of Coral’s gross win after tax, up from 26% seven years ago.

“Indeed, this cost burden now means that over 200 Coral shops make a loss on UK horseracing before any allocation of shop operating costs (such as payroll, rent and rates) and central overheads,” he wrote.

Last month Coral saw a 5% digital levy offer rejected by the sport and today the firm made a fresh offer in an attempt to bring to an end what Leaver described as a “stand-off” between bookmakers and racing.

“Speaking for Coral, we will happily pay a levy of 7.5% on our total (i.e. retail and online) UK horse racing gross win from today,” Leaver said.

“We cannot, though, afford to pay a voluntary levy at this rate on our online business while continuing to pay levy at a far higher rate on our retail business,” he added.

A spokesperson for British Racing said it would respond to Lever’s comments and Coral’s blended rate proposal later today.

Coral currently has one eye on an expected merger with UK rival Ladbrokes later this year, and speaking to eGaming Review this morning the Magic Sign was fully in favour of both Coral’s stance and new levy proposal.

“The current ABP proposal is commercially unpalatable and the idea of a blended rate is worth continuing to think through; ideas on this theme have been discussed within the Bookmakers’ Committee for some time,” David Williams, Ladbrokes director of media, said.

“We believe the Coral letter presents the arguments very neatly and reiterates some of the points we have been making in recent weeks.

“It highlights how costs have escalated whilst the sport has declined and the need to look for a deal that recognises the commercial reality of today rather than the perceived injustices of the past,” he added.

Williams also reiterated Ladbrokes’ desire to continue its long-standing relationship with horseracing but said this could only be on terms which “make commercial sense”.

“We remain adamant that we want to work with racing and believe that the dangers of making us unwelcome in the sport will have more far-reaching repercussions than hitherto realised,” he said.

At present, the ABP scheme, which went live on 1 January, is made up of just three members: online-only firms Betfair, bet365 and 32Red, all of whom had previously paid a voluntary contribution.