UK Racing Dealt Further Blow As Levy Review Refused By DCMS

The Daily Mail claimed that another ‘hammer blow’ has been delivered to the UK racing industry after the government declined to review the betting levy’s duties and timetable.

The newspaper quoted a letter from Nigel Huddleston, DCMS sports minister, who says that he has ‘made it clear’ that any aspect of the government’s proposed overhaul of the 2005 Gambling Act would not be a revision of levy terms.

BHA’s call for DCMS early review

Having carried out an assessment of COVID losses to UK racing, the British Horseracing Authority (BHA) had recommended that DCMS conduct an early review of levy duties by bookmakers as part of its pending review.

Initially, DCMS responded that it will ‘re-evaluate the timetable for reviewing the betting levy,’ a move welcomed by Nick Rust, outgoing BHA chief executive.

Turnover-based levy

Currently, UK bookmakers pay a 10 percent benefit tax that is used to fund the racing sector. However, the BHA, sponsored by the UK’s racecourses, called for betting operators to pay the turnover-based levy.

As a key measure of its ‘COVID-19 Recovery Plan’ that was released last August alongside The Horsemen’s Group and Racecourse Association (RCA), the BHA issued its demand.

Economic assistance

Racing stakeholders had expected that a further winter lockdown would result in losses of approximately £ 300 million for the sport, requiring urgent economic assistance for key services such as racetracks, stables, animal care and staff.

Nigel Huddleston wrote to BHA Chair Annamarie Phelps, as stated by The Daily Mail, clarifying the DCMS plan to review the Levy this year and claiming that the intentions of the department concentrated only on ‘bringing forward the timetable for the review of the levy due in 2024.’

DCMS is reported to have rejected the order of the BHA as levy reforms delivered yields of £ 97 million during the 2019/2020 season, producing more revenue than expected from racing.

In addition, the 2020/2021 levy yield is expected to be about £ 80 million, despite accounting for Covid impacts, with betting contributions remaining high despite racing throughout the year.

Levy expected to hold up well

Huddleston’s letter read: “We have considered your requests very carefully, but the evidence suggests that the 2017 reforms do not need to be revisited at this point.

“The levy performed very well against expectations last year and is forecast to hold up well this year in spite of two months without racing. Levy yield in 2019/20 was £97m, higher than the upper estimate of £92m, and the forecast for 2020/21 is £80m, with racing being able to resume a month earlier than originally expected.”