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Horse Racing: Caborn looking for deal on Tote and modernisation.

Byline: By Howard Wright

SPORTS minister Richard Caborn has warned the racing industry that extending the levy system beyond the current closing date of 2009 can only come about if the Tote is sold to racing interests and modernisation of the sport's admin structure is agreed - and even then there is no guarantee it will happen.

Caborn also hinted that betting industry opposition to the sale of the Tote to racing might jeopardise bookmaker calls to continue the levy system, over which the government has laid legislation enabling racing's major source of funding to be scrapped.

Speaking to the Racing Post yesterday, Caborn said: "It's got to be a package - the Tote and modernisation. One alone won't be enough.

"If one part goes down, it all goes down. It's good old-fashioned trade union negotiation at its best."

Since a group chaired by Lord Do noughue told a conference, convened by Caborn in March, that it had been impossible to find a sustainable commercial mechanism to fund racing, certain elements have assumed that a levy extension was a foregone conclusion.

However, Caborn said: "It's not over yet. We have to get the agreement of the bookmakers over changes to the levy system, which don't run the risk of state-aid intervention from Europe, and the whole of racing has to accept modernisation of governance and regulatory duties under a new British Horseracing Authority.

"At the same time, there has to be an arrangement for the Tote to be transferred to racing, in a closed sale at the full market price."

He pointed out that possible objections to the Tote sale would have to be balanced against the bookmakers' wish to keep the levy system.

"That's why this has to be looked at as a package," he said. "My department will reveal a price for the Tote, determined by independent valuation, in the next two or three weeks, and if a racing consortium is prepared to pay the price, it should come out all right."

However, agreement on the two issues would only be another step on the road to extending the levy, Caborn said.

"Once we have agreement, it's up to me to deliver," he added, pointing out that he would need to persuade the Treasury in particular to forego the amount of VAT, at 17.5 per cent, that would otherwise be collected under a commercial deal, and the government in general that it was correct to alter the enabling legislation.

Caborn, who said he had had to "bite the bullet" over extending the levy, explained: "I've got to sell the full package as being of benefit to everyone, including government and racing.

"I will argue with the Treasury that this is a sport in growth, which if it has stability over the levy and a modernised governance and regulatory structure can continue to grow, and that will increase the tax takeoff beyond what might be lost in VAT.

"It would be better to have this tradeoff than the uncertainty and instability of recent years."
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Title Annotation:Sports
Publication:The Racing Post (London, England)
Date:Jul 6, 2006
Words:504
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