On Friday, 8th June, the British Horse Racing Authority accepted the new horse racing levy, which now includes mandatory 10% revenue contributions from online gambling firms that take bets on horse races. The acceptance see the Association’s coffers from the previous scheme’s £45.5 million (2015-16 figures) to a benefit in 2017-18 that could reach as much as £95 million.
In order to handle this huge annual financial return, the Association foresees a new entity with responsibilities that include oversight of the levy’s distribution, effective April of next year. The shattered Horserace Betting Levy Board will be replaced by this body.
Industry analysts have meanwhile warned that the recent radical chop in maximum betting stakes on Fixed Odds Betting Terminals in high street betting shops will also impact the horse racing business indirectly because of the inescapable reduction in betting company revenues (and therefore the contribution to horse racing) that is bound to follow the need for some retail cutbacks.
Should the government endeavor to recover the tax revenue lost to the FOBT reductions by hiking taxes on internet operators, this could extend to online gambling firms.
The UK government noted that it was ready to work with the BHA on a proposal to expand the UK-centric criteria for paying the levy to a more global system where British bookies accepting global racing bets would need to include these revenues in calculating their racing levy contributions.
The BHA predicts that such a move could cost UK bookies an additional amount of £15 to £20 million annually, and has considered the idea of trying to persuade government to change the levy criteria from 10% of revenue to a percentage based on turnover in an endeavor to keep its levy coffers filled.