British racing demands 8% of operators' offshore profits
Operators told to pay up in order to strike racing commercial deals, large land-based firms to receive small rebate
Offshore operators will have to cough-up as much as 8% of profits from horseracing bets struck with British customers if they are to maintain or commence commercial relationships with the sport.
The British Horseracing Authority (BHA) today published details of its controversial Authorised Betting Partner (ABP) scheme, a model it said would see operators make a fair contribution to the sport.
At present, only businesses based in Britain are subject to the horseracing levy but under new plans, which are due to commence on 1 January 2016, operators will be required to become an ABP and contribute a proportion of their offshore horseracing profits to the Horserace Betting Levy Board (HBLB).
Failure to do so will mean operators would be unable to strike commercial deals with participating racecourses, which is currently more than half of all British courses.
Non-ABPs will also be unable to negotiate on-course Wi-Fi services while representatives of non-members may also be banned from restricted areas such as parade rings and racecourse press centres.
To become an ABP operators will have to be enter into a three-year term with the contribution increasing each year. In year one operator must hand over 7.5% of profits generated from British customers’ horseracing bets.
This rate increases in year two to 7.75% and then once again to 8% for year three.
However, there is a small rebate for businesses which operate more than 1,000 licenced betting offices in Britain – so Coral, Ladbrokes, Betfred and William Hill – with a 0.5% discount on all remote gross win above £20m in year one.
In year two this rebate moves to 0.75% on gross win above £25m and in year three a 1% discount on gross win above £30m.
All contributions are to be made on a quarterly basis with operators also required to provide forecasts for financial planning purposes.
The ABP was first announced in October and has since been criticised by a number of firms including Betfred and Coral while earlier this month Ladbrokes CEO Jim Mullen said the model would mean bookies would have to choose whether to “fight of flight”.
At present there are three ABPs in the shape of Betfair, bet365 and 32Red, all of whom had previously made voluntary contributions to the HBLB due to them having no land-based presence in Britain.