Horse Racing: British Horse Racing threatened by new taxes
Horse racing in the United Kingdom suffered another blow, after the British Horse Racing Authority announced that they had been forced to postpone the publication of 2011 fixtures list “in the face of current uncertainty about Levy income”. The BHA’s Chief Executive Nic Coward believed that it would be irresponsible on the part of the planning authorities for the coming year to set fixtures without a definitely knowing the state of the Levy. Doing so prematurely could leave some 2011 races without money.
The British Horse Racing structure is supported by the Horserace Betting Levy Board. The Board collects 10% of the profits from all bookmakers and betting exchanges which take bets on Horse Racing. The levy board in turn allocates those funds to race purses across the year. The levy board has been consistently reporting a decline in revenues even though it alleges that gambling over all has seen an upsurge and the bookmakers and exchanges are making enormous profits from them. In the past 5 years, the levy board has lost a third of its funding.
Faced with such an acute decline in funds the BHA had previously said that the 2011 fixtures list would be 250 races short. There was a uniquely British tempered uproar when the decision was first announced more than a week ago. Some claimed that reducing fixtures would be pointless and serve no purpose in reacting to Levy Board’s depleting funds, others agreed with the cut yet alleged that the fixtures being cut deserved to stay. Then there were those that held the opinion that the entire Horserace Betting Levy Board should be thrown out the window.
All those groups can’t but agree on one point. The delay in 2011 publication is not good news because it means the BHA is concerned that even cutting 250 fixtures from 2011 still might not compensate for the drop in Levy. The drop comes despite growing profits in the betting industry. The levy board has been trying to increase the levy from the current 10% but the bookies, obviously, disagree.
The bookies argue that it’s not just the levy they have to pay but also fees to the racecourse for TV transmission of races. Those payments to the racecourses reach nearly 75 million pounds. This money, however, stays with the racecourses and the Levy does not see a dime of it. The BHA has expressed concerns regarding the arrangement between bookies and racecourses. In addition to the Levy, that last year stood at just over 76 million pounds, and the 75 million pounds paid to racecourses, the bookies also pay a tenth short of a billion pounds in taxes. Perhaps they are right to ask that they not be burdened with more costs.
Nic Coward with the BHA noted that while the amount contributed to the levy had gone “into freefall”, the betting industry was still doing very well and had been posting “bumper profits”. Freefall in this context might even be an understatement because in two years the Levy fell from 115.3 million pounds to 76.5 million pounds. It’s still expected to drop in the year 2011. The question is why haven’t rising profits in the betting industry led to a rising levy?
The BHA blames loopholes in levy collection, specifically the practice of moving online and telephone betting businesses outside of the jurisdiction of the Horserace Betting Levy Board. Moving business offshore means bookkeepers don’t have to pay taxes or the Levy but still can profit from Horse Racing. The Levy gains nothing it can put back into Horse Racing.
Nic Coward, furious at the betting industry said that it was unfair that hard working individuals connected with horse racing should suffer due to the betting industry’s tactics to boast profits. In the same token Rupert Arnold, Chief Executive of the National Trainers Federation said that the current trend would see large number of trainers closing shop and stable staff getting laid off.
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