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Coral proposal 'unrealistic starting point' says racing.

Byline: Bill Barber

BRITISH racing yesterday rejected Coral's offer of a 7.5 per cent levy on both their betting shop and online business as being an "unrealistic starting point for negotiations" as the row over the sport's authorised betting partner policy deepened.

In a joint statement, the BHA, Racecourse Association and Horsemen's Group left the door open to further negotiations but said the offer by the leading bookmaker would leave racing more underfunded than it is now.

Coral's offer yesterday drew support from their high-street rivals with William Hill insisting it was only fair they were offered a discount because of its sizeable retail payments.

In yesterday's Racing Post, Gala Coral chief executive Carl Leaver described racing's ABP policy, which limits sponsorship opportunities for bookmakers who do not pay the tariff demanded by the sport, as draconian and revealed that over the past seven years the costs of racing in levy, media rights, sponsorship and online streaming to his firm had risen 45 per cent, while total gross win - customer stakes minus winnings - including online had fallen 19 per cent.

Coral currently pay nothing to racing from their online business, but a 7.5 per cent levy rate is below the 10.75 per cent they pay on their betting shop business. Their current offer would mean a fall in their levy payments compared to what they pay now.

Racing's statement, signed by BHA chief executive Nick Rust, Horsemen's Group chairman Philip Freedman and Racecourse Association chief executive Stephen Atkin, said: "Coral have suggested a rate of 7.5 per cent for both retail and remote betting activity.

"However, as Coral themselves acknowledge, this would generate less than the current unsatisfactory arrangements, and is not therefore a realistic starting point for negotiations."

The statement said racing would work with the government and the betting industry "to make sure the necessary legislation is put in place to meet all of our needs".

It added: "Racing's door remains wide open to everyone who wishes to come and talk to us directly to resolve the industry's funding issues for the mutual benefit of racing, betting and our customers. We remain firmly of the view that this issue will be best resolved through private rather than public discussion."

In response to Leaver's argument that betting volumes on the sport were falling, racing said there were indications activity was actually rising and that people who bet on the sport were more valuable to the sector than simply their racing activity alone.

As for a 'blended' rate across retail and online, the statement added: "There have been suggestions of a harmonised rate for retail and remote betting activity.

"There is absolutely nothing new in this.

Indeed, for the fifth year running, the bookmakers' committee recommended a rate of 10.75 per cent for both retail and remote as fair and reasonable. This was reaffirmed by the government on December 3, 2015 in its determination of the levy."

Meanwhile, Coral's high-street rivals offered their support to the points raised by Leaver.

Ladbrokes director of media David Williams said: "The current ABP proposal is commercially unpalatable and the idea of a blended rate is worth continuing to think through; ideas on this theme have been discussed within the bookmakers' committee for some time."

Williams said the letter from Coral, with whom Ladbrokes are set to merge, reiterated points they had made about the rising costs against declining returns of racing for bookmakers.

He added: "At Ladbrokes, we are very clear that we are keen to engage with racing on terms that make commercial sense and we want to grow the sport.

"Hopefully in the emotion that may follow the publication of an idea, some will see the merit in sensible discussion and a willingness to embrace the ideas it contains.

"We remain adamant that we want to work with racing and believe that the dangers of making us unwelcome in the sport will have more far-reaching repercussions than hitherto realised."

William Hill's group communications director Ciaran O'Brien said: "As the biggest levy payer and biggest commercial partner of racing it is only fair we are offered a discount accounting for our sizeable retail payments. That principle has to be the way through this situation."

Greg Knight, managing director of independent firm Jenningsbet, which has an Isle of Man-based website, said it was unfair the retail sector was in his view subsidising the offshore industry.

He said: "The reason Jenningsbet has not signed up to ABP is not that I object to racing going after the offshore money - quite the reverse, it is entirely understandable and proper that it receives some sort of offshore levy - but I absolutely take issue when I am paying too high a rate on my retail bets and somehow am deemed to not be paying my way.

"If racing were to accept the principle of a blended rate then all of the major UK bookmakers with retail estates here in the UK would, I suggest, find it incredibly hard to justify non-payment of an offshore levy. Racing could then take whatever action it deemed necessary against non-payers."

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Nick Rust: BHA chief rejected Coral offer in joint statement
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Title Annotation:Sport
Publication:The Racing Post (London, England)
Date:Jan 14, 2016
Words:866
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