At a time when the general feeling is British racing needs to increase prize money and quality levels this is reported in the paper today. Really is a mess....
Crisis looms as bookies threaten huge cut in levy
by Howard Wright
.
BRITISH racing is facing the frightening prospect that its levy income could be slashed by 60 per cent next year, to around £33 million, compared with the latest working forecast of £85.5m for the current 2007/8 yield.
Although an increase in payments for betting-shop pictures would offset a proportion of the cut, the effect would be devastating for racing, which is already having to come to terms with falling levy yield and imminent cuts in prize-money.
As well as providing around 60 per cent of prize-money, Levy Board contributions impact on virtually all sectors of the industry.
Areas that would be severely affected include integrity, veterinary science, racecourse improvements, staff training and marketing.
The potential for a staggering drop in money available from central funding has come about principally because of the major bookmakers' reaction to the emergence of Turf TV as a second provider of live pictures for betting shops.
To put the figure of £33m in perspective, should that materialise, it would be on a par with the levy yield in the early 1990s – when there were 50 per cent fewer fixtures than will take place next year.
From January 1, Turf TV will have exclusive rights to deliver pictures from 31 racecourses - 30 aligned to Racing UK, and Ascot - but 80 per cent of betting-shop operators, including the big four of William Hill, Ladbrokes, Coral and Betfred, have declined to take up the service and confined their coverage to SIS, the previous monopoly supplier.
On Tuesday, the Levy Board's bookmakers' committee, was putting the final touches to its submission, which signals the start of the statutory process to decide how much the sport will receive from the betting industry.
No-one was prepared to comment ahead of Wednesday's opening skirmish, but it is understood that the bookmakers will put forward a scheme by which the current basic levy payment of ten per cent of gross profits from UK racing is reduced by an amount equivalent to the cost of taking Turf TV, plus one-third of the fees payable to the Gambling Commission under the new Gambling Act, which came into force on September 1.
Each shop will be charged £6,500 a year for Turf TV from January, but non-subscribers - which represent a majority on the bookmakers' committee - say they pay £1,600 per shop for equivalent coverage at the moment, and claim therefore the net cost to the industry for taking what they already have would be around £50m.
The bookmakers' committee is expected to recommend that individual contributions towards the £50m should be deducted from levy payments.
It will also propose a further global reduction, adding up to at least £2m, to account for extra costs of regulation attributable to UK racing under the fee system introduced bythe new Gambling Commission.
Under these proposals, rough estimates suggest the levy yield would fall by somewhere in the region of £52m, to about £33m, but with everyone paying for pictures from Turf TV courses, the amount contributed bythe betting industry for these overall rights, including those already sub-contracted to SIS, has been put at around £36m.
The resulting calculation makes grim reading for racing, since the combined total for levy and pictures would be little more than £70m, compared with £125-130m a year presently.
The bookmakers will argue that the impact of taking Turf TV pictures as an addition to current costs is unlike an increase in a utility, say electricity, which is the cost of carrying on a business.
The counter argument - that the cost of Turf TV has nothing to do with levy payments but is the price for pictures that bookmakers can take or ignore - will be led by racing's representatives on the Levy Board.
The BHA board is building a case for the levy to produce more money for racing and is expected to impress the need to examine the level of contributions made by betting exchanges, and ask whether it is sensible to retain threshold limits for bookmakers in a gross-profits regime.
The process for agreeing the 2008-9 levy scheme around the Levy Board table runs until midnight on October 31, after which it has to be referred to the DCMS secretary of state, James Purnell, for determination.
Crisis looms as bookies threaten huge cut in levy
by Howard Wright
.
BRITISH racing is facing the frightening prospect that its levy income could be slashed by 60 per cent next year, to around £33 million, compared with the latest working forecast of £85.5m for the current 2007/8 yield.
Although an increase in payments for betting-shop pictures would offset a proportion of the cut, the effect would be devastating for racing, which is already having to come to terms with falling levy yield and imminent cuts in prize-money.
As well as providing around 60 per cent of prize-money, Levy Board contributions impact on virtually all sectors of the industry.
Areas that would be severely affected include integrity, veterinary science, racecourse improvements, staff training and marketing.
The potential for a staggering drop in money available from central funding has come about principally because of the major bookmakers' reaction to the emergence of Turf TV as a second provider of live pictures for betting shops.
To put the figure of £33m in perspective, should that materialise, it would be on a par with the levy yield in the early 1990s – when there were 50 per cent fewer fixtures than will take place next year.
From January 1, Turf TV will have exclusive rights to deliver pictures from 31 racecourses - 30 aligned to Racing UK, and Ascot - but 80 per cent of betting-shop operators, including the big four of William Hill, Ladbrokes, Coral and Betfred, have declined to take up the service and confined their coverage to SIS, the previous monopoly supplier.
On Tuesday, the Levy Board's bookmakers' committee, was putting the final touches to its submission, which signals the start of the statutory process to decide how much the sport will receive from the betting industry.
No-one was prepared to comment ahead of Wednesday's opening skirmish, but it is understood that the bookmakers will put forward a scheme by which the current basic levy payment of ten per cent of gross profits from UK racing is reduced by an amount equivalent to the cost of taking Turf TV, plus one-third of the fees payable to the Gambling Commission under the new Gambling Act, which came into force on September 1.
Each shop will be charged £6,500 a year for Turf TV from January, but non-subscribers - which represent a majority on the bookmakers' committee - say they pay £1,600 per shop for equivalent coverage at the moment, and claim therefore the net cost to the industry for taking what they already have would be around £50m.
The bookmakers' committee is expected to recommend that individual contributions towards the £50m should be deducted from levy payments.
It will also propose a further global reduction, adding up to at least £2m, to account for extra costs of regulation attributable to UK racing under the fee system introduced bythe new Gambling Commission.
Under these proposals, rough estimates suggest the levy yield would fall by somewhere in the region of £52m, to about £33m, but with everyone paying for pictures from Turf TV courses, the amount contributed bythe betting industry for these overall rights, including those already sub-contracted to SIS, has been put at around £36m.
The resulting calculation makes grim reading for racing, since the combined total for levy and pictures would be little more than £70m, compared with £125-130m a year presently.
The bookmakers will argue that the impact of taking Turf TV pictures as an addition to current costs is unlike an increase in a utility, say electricity, which is the cost of carrying on a business.
The counter argument - that the cost of Turf TV has nothing to do with levy payments but is the price for pictures that bookmakers can take or ignore - will be led by racing's representatives on the Levy Board.
The BHA board is building a case for the levy to produce more money for racing and is expected to impress the need to examine the level of contributions made by betting exchanges, and ask whether it is sensible to retain threshold limits for bookmakers in a gross-profits regime.
The process for agreeing the 2008-9 levy scheme around the Levy Board table runs until midnight on October 31, after which it has to be referred to the DCMS secretary of state, James Purnell, for determination.
If your horse comes 3rd you can sometimes win as much as £250 
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