Bookies told they must pay up to maintain racing deals

UK-facing bookmakers including William Hill, Ladbrokes and Coral have been told they must stump-up millions of pounds in additional levy payments if they want to continue marketing their brands through commercial horseracing deals.

The warning comes from Jockey Club Racecourses (JCR) and Arena Racing Company (ARC), which operate half of the racecourses in Britain and believe operators should contribute more cash to reflect horseracing profits generated by their digital businesses.

In conjunction with the British Horseracing Authority (BHA), the two racing groups have established a new funding agreement which will require bookmakers to make additional levy payments and become authorised betting partners.

And as part of the agreement the JCR and ARC said they would not enter into any new commercial deals with bookmakers which had not paid or agreed to pay an extra levy contribution by 1 January 2016.

Bookmakers currently pay a horseracing levy in relation to their UK-based operations, however, according to ARC, the establishment of offshore digital businesses had contributed to a major fall in annual levy contributions from £105m in 2004-05 to an estimated £53m in 2017-18.

“It is simply not an option to allow the status quo to continue,” Martin Cruddace, ARC chief executive, said.

“This is a substantial undertaking involving significant short term consequences but it is a necessary one if we are to ensure the sport has a sound basis on which to move forward in the years ahead,” he added.

Online-only operators 32Red, bet365 and Betfair, which already make voluntary levy payments, will automatically become authorised bookmaker partners, however, the likes of William Hill, Coral and Ladbrokes must now decide whether they are willing to pay an additional sum.

Speaking to eGaming Review this morning, Ladbrokes’ director of media David Williams said the firm had yet to come to a decision on whether or not it would pay to become an authorised partner.

“We’ll have to see how this plays out but are in no doubt that it feeds into a much broader discussion around ongoing levy negotiations,” Williams said.

“We’ve just announced a renewal of our sponsorship of The Ladbroke at Ascot and continue to stress that our partnerships with races, including the likes of the Ladbrokes St Leger, are not simply about handing over sponsorship cheques but more so about working with courses and horsemen towards elevating races and meetings to provide mutual benefits.

“We’d be very disappointed if we weren’t able to continue developing those themes,” he added.

And a spokesperson for William Hill said the firm would also be adopting a wait-and-see approach

“We await the full details of how ABPs [authorised betting partners] may work but it is clear that, as with the racing right, there are major questions around how it would work,” the spokesperson said.

BHA chairman Nick Rust, who joined the body from Ladbrokes at the start of the year, said the new scheme was a necessary step in protecting the sport and closing what he described as “loopholes” exploited by bookmakers.

“British racing offers world-class sport, gives enjoyment to millions of people a year, employs over 85,000 people and contributes £3.4bn a year to the economy,” Rust said.

“But we are underfunded and loopholes in the Horserace Betting Levy system, allowing the majority of betting operators to make no contribution from profits made on British racing through their digital businesses, continue to play a large part in that,” he added.

Meanwhile a spokesperson for 32Red, one of the biggest sponsors of British racing, backed the new system and said its chief executive Ed Ware was passionate about supporting British horseracing.

“We think the partner status is the right move and we are obviously delighted to be one of the three partners,” the spokesperson told eGR.