Racing, betting industries reach deal on levy
London: Gambling companies have agreed to pay extra to support horseracing in Britain next year and want fast progress on talks to reform the levy system which funds the industry.
In a deal thrashed out just ahead of a midnight deadline on Monday, bookmakers will cough up 72.4 million pounds between April 2012 and March 2013, an increase from 71.4 million in the current year.
That equates to 10.75 percent of their gross profits, the same level that was paid last year.
In a change from past years, Britain`s three biggest bookmakers -- William Hill, Ladbrokes and Gala Coral -- guaranteed that they will make a minimum contribution of not less than 45 million pounds.
Betting exchange Betfair said it would contribute 6.5 million pounds. The remainder will be contributed by smaller firms of bookmakers and independents.
"I believe that the offer that has been accepted should deliver to racing significant benefits," said Levy Board chairman Paul Lee. "The offer of guaranteed contributions by the major operators provides more certainty for all parties and valuable assistance for the Levy Board`s financial planning."
Britain`s horseracing industry and bookmakers negotiate the levy each year. If they cannot agree, the government intervenes to help hammer out a deal, as was the case last year.
The levy has funded horseracing for 50 years but is regarded as outdated by both industries.
The overall amount paid to racing has fallen in recent years as bookmakers moved operations offshore and avoided the levy on bets placed on British races, angering the racing industry.
Gambling companies have contended they now fund racing through additional channels, including paying for television pictures and sponsorship deals.
The government is consulting with both sides over an alternative to the levy.
"We now need to start work immediately on a long term settlement that builds on this progress and takes government out of the process for good," Nick Rust, Ladbrokes betting channels chief said on Tuesday.
Paul Roy, chairman of the British Horseracing Authority, saod: "No one involved in our sport should be in any doubt of the need to radically overhaul or replace the Levy."
Shares in Ladbrokes were down 1.8 percent to 135.6 pence at 1415 GMT, with William Hill 1.3 percent lower at 213.1 pence, compared with a 2.7 percent fall in the wider mid-cap market.