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UK Racing Leaders "Call For Business Model Changes"
Meanwhile British racing leaders “are seeking an overhaul of the current business model, which has seen a declining commitment from the bookmakers to racing thanks to both technology changes that have allowed internet wagering & betting exchanges to flourish & operators to move offshore” reported thoroughbredtimes.com. The British model “relies on a government-determined levy that requires bookmakers to pay a percentage of their race-wagering profits into racing”. In a letter to John Penrose, Minister for Tourism & Heritage for the Department for Culture, Media & Sport (which determines the Horserace Betting Levy rate) industry leaders “documented a dramatic fall in money generated by the levy” of 44% from between 2007 & this year. The letter “called for replacing the levy with a completely new system that ensures bookmakers & betting exchanges return a fair share to racing”. The letter (signed by leaders from the British Horseracing Authority, The Jockey Club, The Horsemen’s Group & 3 leading track owners) noted: “We are very doubtful that simply reforming the levy is likely to deliver a stable and/or fair relationship between the racing & betting industries in the long term, as the levy appears unable to deal with the 2 principal challenges, namely the advent of online operators based offshore & the emergence of betting exchanges.” The bookmakers themselves agree “the levy should be ended” & the Association of British Bookmakers “is calling for the 50-year-old levy to be ended in 2014 & replaced by commercially-negotiated agreements between bet takers & racing”. ABB chief executive Dirk Vennix commented: “Under the ABB’s proposals, the horse racing & betting industries would have 3 years to set up & negotiate a long-term commercial deal on the core program of races. As set out in our submission, this should never be underpinned by an intellectual property right owned by a sports body, but rather be a process of negotiation & contract between horse racing & betting.” The input follows a call earlier this year for “ideas on the future of the levy” from the Department of Culture, Media & Sport.