Racing must 'get real' on levy demands, say bookies

British horseracing “must face-up to reality” and back down on demands for a “substantial” increase in levy payments, according to Bookmakers’ Committee chairman Mike O’Kane.

O’Kane’s warning comes after negotiations for the 55^th levy scheme, which is due to commence on 1 April, broke down at the weekend with the matter now referred to the Department for Culture, Media and Sport for determination.

Racing wants operators to make an additional contribution to reflect the size of their offshore digital businesses – at present operators are only required to pay a 10.75% levy on profits derived from UK-based operations.

And in order to recoup some of the estimated £30m lost out to offshore betting, racing is holding firm on its demand for operators to pay a proposed 7.5% levy on digital bets, which would rise to 9% in two years’ time.

However, the bookmaking industry, which has been hit by rising costs and taxes in recent years, is believed to have had an offer of 4%, fixed for a period of four years, rejected by racing.

“I am very frustrated,” O’Kane said. “The Bookmakers’ Committee constructed a very good argument which realistically addressed the challenges faced by bookmakers and racing.

“I truly believe that racing must face-up to the reality that its combined revenue receipts from statutory levy, media rights and sponsorship – which are all sourced from bookmakers – continues to increase year-on-year and yet it still wants substantial increases from the levy.

“This failure brings more uncertainty when both racing and bookmaking would benefit from a period of stability. The committee shall now concentrate its efforts to support the secretary of state as he prepares to make his determination,” he added.

Speaking to eGaming Review this morning, a spokesperson for William Hill said the offer tabled by the bookmaking industry should be “attractive to racing because it offered a substantial amount of money over an extended period”.

“Unfortunately they decided to reject it,” the spokesperson added. “It’s regrettable and we will obviously work with the secretary of state on the determination process.”

The British Horseracing Authority (BHA) in a statement said it had decided to reject the proposal because it would have meant income to the sport would have continued to decline from what it described as being an “already challengingly low level”.

The BHA also said it was aware of a small number of operators willing to support the sport from their digital betting activity and would now move forward with plans to operate an Authorised Betting Partner model as set out a fortnight ago.