Government announces Levy rollover: Betfair named as ABP

Betfair, Bet365 and 32Red confirmed their commitments to the new Authorised Betting Partners initiative on the same day the Government announced a rollover for the 2016-17 Levy scheme.

The ABP idea was designed by British racing to ensure what is deemed a fair contribution on offshore digital operations by bookmakers, with the issue a hot topic after failure to agree on the terms of the next Levy by the October deadline.

Plans to introduce a 'Racing Right' in place of the Levy were announced by chancellor George Osborne in his budget speech back in March, but the new mechanism appears some way off.

The Levy remains in the interim and MP John Whittingdale, Secretary of State for Culture, Media and Sport, confirmed the Government's decision to continue the current scheme.

A statement read: "I have decided to direct that the current Levy scheme should continue to have effect for 2016/17.

"In making this Determination I have had regard to the offer made by the Bookmakers' Committee, which also proposed that the headline rate of 10.75% was maintained for another year.

"I also took into account the reasons why the offer was rejected by the HBLB (Horserace Betting Levy Board), which is because racing felt that it could not accept the overall proposed package, which included supplementary contributions outside of the statutory Levy.

"Any discussions or negotiations about voluntary Levy contributions in respect of offshore remote betting operators are outside the scope of my statutory role in making this Determination.

"I am aware that such negotiations took place and several bookmakers had undertaken to make wholly voluntary Levy contributions, which would have secured additional funding for racing for the next three years, and I welcome this offer.

"With the statutory Levy rate now set for next year, I hope that these discussions continue and that an agreement can be reached.

"Having concluded the Determination I would like express my disappointment that the HBLB and Bookmakers' Committee were not able to agree the Levy scheme and that it has been necessary to refer this matter to Government."

It is hoped the ABP initiative will allow racing to recoup a bigger share of racing revenues, with Betfair the first to decide to contribute an agreed percentage based on a new rate card developed by British Racing - the British Horseracing Authority (BHA), the Racecourse Association and the Horsemen's Group.

Up until April 2016, Betfair will continue to contribute under its existing five-year funding commitment, with the first year of this ABP deal replacing the fifth (and final) year of the existing commitment, which was due to expire in March 2017.

ABPs will be granted use of a kitemark and promotional benefits as part of a marketing campaign to be rolled out across the sport.

They will also have the opportunity to negotiate preferential commercial arrangements with participating racecourses including access to sponsorship opportunities, Wi-Fi provision and wider promotion.

Those racecourses currently signed up are those within the two largest groups, Arena Racing Company and Jockey Club Racecourses, and the five Scottish tracks.

Betfair used its ABP status to acquire the title sponsorship of this Saturday's Tingle Creek Chase at Sandown.

BHA chief executive Nick Rust said: "We are delighted to have signed up our first Authorised Betting Partner under a multi-year deal, and welcome the enlightened approach taken by Betfair.

"They clearly value our sport and recognise the interdependence between Racing and Betting, as well as the benefits associated with being an Authorised Betting Partner, in particular from the commercial parties in British racing that are signing up to the model.

"It is vital for the sport, and the tens of thousands of people deriving their livelihoods from it, that we move our funding from our biggest customer group on to a more sustainable footing, including taking the necessary steps prior to the introduction of the Horserace Betting Right to incentivise digital businesses to make a contribution back to British racing."

The BHA later added bet365 and 32Red to the list of ABPs, although the specific details of each arrangement are confidential.

A number of firms have railed against the ABP scheme, with Betfred relinquishing sponsorship of both the Cheltenham Gold Cup and the Sprint Cup at Haydock as it has yet to sign up to the deal.

Coral is another that boasts some high-profile sponsorships but is not an ABP and it today announced plans to back racing in Ireland for the first time.

The firm will support the full seven-race card at Leopardstown on January 17, with the E100,000 Coral.ie Hurdle and the E100,000 Coral.ie Handicap Chase the feature events.

Coral has signed an initial three-year deal after recently acquiring an Irish betting licence.

"We are thrilled to be sponsoring one of Leopardstown's biggest race meetings of the year, including one of the most prestigious and valuable hurdle races staged in Ireland," said Simon Clare, Coral PR director.

"We will also be offering a new E100,000 bonus to any horse that can win the Coral.ie Hurdle and go on to land the Coral Cup at the Cheltenham Festival, a big race double that was famously achieved by Xenophon who landed a major gamble in the process back in 2003", added Clare.

"This is Coral's first sponsorship venture in Irish horse racing and it gives us the perfect platform to promote the Coral name, our passion for horse racing, and the benefits of our online and mobile betting service to Irish racing fans and punters."

Clare admits the timing of the announcement could be misinterpreted but insists it is purely a coincidence.

He said: "It would be very easy for me to try to make political capital out of this.

"I can see how people may add two and two together and come up with five, but it is merely coincidence.

"We planned to announce the sponsorship on December 3 due to the publication dates of the Irish racing calendar.

"We are keen to promote our brand in Ireland and this is an excellent way to do so alongside more traditional marketing.

"That said, it does serve as a reminder that there are other sponsorship opportunities."

Coral argues that it already contributes a substantial amount to racing and while the swift decision on the Levy has been welcomed, the issue of ABPs remains a sticking point.

Andy Hornby, Gala Coral COO: "We are supportive of the determination announcement and appreciate how quickly this was reviewed by the Minister.

"We made a very fair offer both in terms of the statutory scheme and a voluntary contribution for our offshore business and still find it both surprising and disappointing that racing chose to turn the offer down

"The Gala Coral group contributes £50m to racing every year through a combination of media rights payments, Levy payments and online streaming charges, with a significant contribution made by our offshore business.

"Furthermore we also spend well over £2m on sponsorship and the like with British racing.

"Despite this we have not been afforded Authorised Betting Partner status and are being forced to review commercial arrangements with a number of racecourses.

"This can only be damaging for the sport in the longer term and hope the position can be resolved in the near future."

Ed Ware, CEO of 32 Red, has urged other bookmakers to sign up to be ABPs.

He said: "32Red is delighted to be an Authorised Betting Partner and we are looking forward to continuing to be a strong supporter of British Horseracing through both ABP levy payments and our ongoing and extensive sponsorship portfolio.

"We sponsor around 1,000 races a year, making us the biggest sponsor numerically - and we will certainly be interested at looking at any new opportunities in this area should they become available if other firms decide against becoming an ABP.

"We would urge others in our sector to back British Horseracing and sign up to be an Authorised Betting Partner."