UK government confirms racing levy scheme
Offshore and onshore operators to be taxed 10% of gross profits from all bets by UK customers on British races
Operators will be taxed 10% on all profits derived from bets placed on British horseracing as part of the UK government’s revamped Levy scheme.
The scheme, which comes into effect on 1 April, replaces the retail-only Horserace Betting Levy and will for the first time be applied to offshore betting companies, in an effort to boost funding for UK racing.
Under the new levy, both onshore and offshore operators will be required to pay 10% of gross gambling yield (total stakes minus winnings paid out) derived from the sport, above the first £500,000 of profits.
The move will see the Horserace Betting Levy Board closed and the Gambling Commission responsible for collecting the Levy from early 2018 onwards, and will then pass on the funding to a nominated Racing Authority acting on behalf of the racing industry.
Tracey Crouch, Minister for Sport, Tourism and Heritage, said she was confident the levy would “help secure the future of horseracing” in the country.
“Horseracing has a strong heritage in this country, employing thousands of people and is enjoyed by many almost every day of the year,” Crouch said.
“This new approach to the Horserace Betting Levy will help sustain and develop the sport,” she added.
According to recent estimates, the new system is expected to yield approximately £90m. However it is still subject to passing European Union state aid rules.
If approved, the levy will also bring to an end the Authorised Betting Partner (ABP) scheme, introduced by British Racing to help fund racing until the new levy was in place.
The ABP rate is set at 7.5% of online profits, however, land-based giants such as William Hill, Ladbrokes and Coral – which currently pay the 10.75% retail levy, all refused to join the scheme.
Nick Rust, CEO of the British Horseracing Authority (BHA), said he welcomed the announcement from the UK government this weekend.
“Once the new system is implemented in April 2017, we will see a significant uplift in the sport’s central funding that will benefit our participants and the many local communities which racing supports across all corners of the country.
“British racing is committed to working closely with our partners in the British betting industry to make a success of this new environment, and grow what is the most natural, exciting betting product to the future advantage of both our industries and the wider economy.”