UK racing suffered another major blow yesterday after the country’s Government rejected the industry’s request to roll out a formal review of the applicable gambling levy in 2021.
In a letter sent to the Chair of the British Horseracing Association (BHA), Annamarie Phelps, the country’s Sports Minister Nigel Huddleston has made it clear that the current review of the UK Gambling Act of 2005 will not include the increase of the levy rate above the 10% one that local bookmakers are currently obliged to pay. Mr Huddleston shared that the Government has taken into consideration the requests of the sector, but came to the conclusion there was no reason for reviewing the levy at this point.
The next review of the country’s gambling legislation and regulatory framework could commence in 2024 but, so far, the UK Government has not made a commitment to such a timing.
The demand for an early review of the 10% levy, which was not set to be considered until 2024, was a significant part of the racing sector’s Covid-19 Recovery Plan which the BHA officially announced in August 2020. The British Horseracing Association and local racecourses have been calling for gambling companies to start paying a tax on their turnover rather than their profits. Furthermore, they have asked to be granted a part of wagers placed on overseas races.
Sports Minister Says Levy Performed Very Well Despite Coronavirus Pandemic Shutdown
The British racing sector had projected losses of more than £300 million because of the coronavirus before the pandemic’s second wave, which has made their financial problems even worse.
The country’s Government has taken the sector’s requests into consideration but, eventually, concluded there was no reason for a levy review at this stage. The Sports Minister’s involvement in the case has come as a surprise, especially considering the fact that, in December, the BHA praised the authorities for finally starting the Gambling Act’s review.
Reportedly, in the letter to the BHA, Huddleston explained that the Government intended to once again in 2021 consider whether there is a reason for bringing forward a timetable for the requested review. He further shared that the Government would continue to collaborate with the industry for maximum results.
In an earlier letter sent by Mr Huddleston to the Chair of the British Horseracing Association in 2020, which has not been previously reported, the UK Government provided their reasons to not allow levy reform, saying that with a £97-million yield in 2019/2020, the betting pool was generating a much larger income for the country’s racing sector than analysts had projected.
Even when taking into account the impact that the coronavirus pandemic and the massive shutdown of all major sports for three months, the projected levy yield for 2020/2021 is expected to hit £80 million thanks to the fact that betting revenues remained strong despite the pandemic. The Sports Minister reminded that the levy performed very well contrary to the expectations in 2020 and will probably hold up well in 2021 despite the few months without racing events.
- Author
Daniel Williams
