Levy Board anounce increase
Wednesday 24 October 2012
Members of the Levy Board have unanimously agreed the 52nd Levy Scheme, which will yield £72.9million.
The agreement comes a full week before the deadline for the 2013-14 scheme and the figure compares favourably with the £72.4million agreed on 12 months ago.
William Hill, Ladbrokes and Coral have agreed to guarantee that thier contribution will be no less than £45million while Betfair will make a contribution which is assumed to be around £7million.
The 52nd Levy Scheme will in most respects continue the terms of the current scheme, with a headline rate of Levy at 10.75% of bookmakers' gross profits on British racing.
Levy Board Chairman Paul Lee said: "The Board is extremely pleased to have reached unanimous agreement.
"This will provide further stability and make possible significant additional expenditure on prize money in 2013.
"I would like to give recognition to Betting and Racing for the constructive approach that they have taken in seeking early resolution to the terms of the next Levy Scheme."
It has also been announced that prize money allocations by the Board will exceed £50m, a rise of some 30% on 2012 and some 45% on 2011.
Paul Bittar, on behalf of British Racing's three representatives on the Horserace Betting Levy Board, said:
"We are pleased to have reached agreement on the 52nd Levy Scheme ahead of the 31st October deadline. This new deal provides some certainty for the sport, and our publication of the full Fixture List for 2013 earlier this month was a clear sign of our confidence in a new spirit of co-operation with the betting industry.
"This mutual respect must continue, and we now have a platform upon which to recommence discussions on long-term, commercial funding arrangements with the major operators and beyond. The Betfair deal, which we have instructed be paid through the Levy Board, continues to provide the template in this respect, and is a true commercial partnership.
"Through no fault of its own or its current custodians, the flaws in the existing Levy mechanism do remain, and its collection base is far too narrow for the way in which British punters now bet. We look forward to Government progressing its proposals for a long-term, enforceable replacement for the Levy in line with its commitments, and a modern framework for the relationship between the two industries."
Simon Bazalgette, group chief executive of The Jockey Club, the largest commercial group in British horseracing said: "I welcome this Levy deal as a sign of steadily improving relations between racing and betting operators, and for the positive impact it will have on prize money in British racing.
"Constructive discussions have been taking place behind the scenes to get to this stage and, on this foundation of understanding, I hope we can move towards a longer term commercial funding solution that benefits all.
"The lack of a public battle around this year's Levy agreement is recognition from all parties of the mutual gains to be made from working together to build up racing as an exciting sport and a fantastic betting product."
Will Roseff, chairman of the Bookmakers' Committee said:
"We're pleased that the Committee's recommendations for the 52nd Levy Scheme have received the unanimous endorsement of all members of the Levy Board well in advance of the statutory deadline of 31 Oct.
"This is indicative of the amicable and pragmatic approach adopted by all stakeholders during negotiations, borne out of an evolving and much more productive relationship than has previously been the case. The improved relationship is also reflected by the filling of the majority of Criteria Fixtures which will maximise Betting Generated Revenue (BGR).
"The settlement means that the total amount received by racing from BGR and TV pictures will rise from an estimated £149.4m in the current financial year to c. £158.6m in 2013-14. There has been a substantial increase in these payments since the 49th Levy Scheme (2010-11) - the equivalent estimates for 2010-11 and 2011-12 were £116.5m and £135.7m respectively.
"As the cost of providing TV pictures in Licensed Betting Offices continues to soar racings picture rights revenues have increased by £28m since 2010-11.
"Today's agreement recognises that the BGR collected and distributed by the Horserace Betting Levy Board takes account of this. It is also reassuring that the settlement acknowledges the difficulties that smaller bookmakers face, something the Bookmakers' Committee was keen to stress during negotiations.
"The Bookmakers' Committee estimates that the BGR collected by the HBLB during the period of the 52nd Levy Scheme will be a minimum of £72.9m - an increase in the sum estimated to be generated during the period of the 51st Levy Scheme.
"Gala Coral, Ladbrokes plc and William Hill plc have once again agreed to guarantee that their combined contribution for the period of the 52nd Levy Scheme shall be not less than £45m, providing the Board certainty and assistance for its financial planning."