Any inhabitant of the world of racing politics knows it as a place full of conundrums. But even the most informed observer would surely find it surprising that the Racing Right has now apparently disappeared from racing’s landscape.
For the best part of two years, this column, among many others, devoted a great deal of coverage to how and when a Racing Right, based on intellectual property, was to be instigated to replace the levy as racing’s main source of central funding. So what has happened to it?
In short, the government has placed it in the ‘too difficult’ tray. But before we start hurling abuse at this administration, we must consider what we have been given as an alternative.
As I said in my column last month, the alternative involves the government pursuing what must surely be a more pragmatic and achievable ‘solution’ so that changes can be made to the legislation underpinning the levy.
The key requirement, after all, is to ensure bets channelled via overseas operators will attract payments to racing and, if this can be done through a modified levy, then we must accept it with open arms. This is especially so as the changes will create a system whereby the levy continues to collect funds but will then hand them to racing for distribution.
There are various reasons why the Racing Right has hit the buffers, the main one being that it would have required full-blown primary legislation to achieve it, whereas a modified levy requires secondary legislation, acquired through statutory instrument.
Furthermore, the Racing Right would have faced a barrage of objections in parliament, fuelled by a very strong bookmaker lobby, while many politicians would have asked the question, why is racing deserving of special treatment?
Yes, of course, we know the answer but it would not have stopped a significant number of other sports lining up behind racing to claim they too had a right to receive a share from bets taken on their sport.
This is to say nothing of the special status the levy has in enabling betting operators to pay their dues to racing without VAT. I’m not saying a way could not have been found of circumventing the VAT issue but it would have been another major hurdle to jump.
And all the while, the clock would have been ticking and year-on-year the levy would be declining, with dire consequences for racing. Who knows what year the Racing Right would have actually happened, if at all?
As it is, achieving the right modifications to the levy is not plain sailing. We still have to get round European state aid legislation, while agreement with the betting industry has to be found on the so-called blended rate of levy, combining the domestic rate with overseas.
As it is, achieving the right modifications to the levy is not plain sailing
There are other complications within this area because nobody in racing can be happy about the fact that every time a bookmaker makes yet another special offer to Saturday punters, it deprives racing of revenue, such are the tribulations of the gross profits system. How much simpler in these days of high turnover, low margin, it would be to have a turnover-based system.
That said, I have no doubt all the problems relating to a modified levy can be overcome – but whether the body’s reincarnation can be achieved by April of next year is another question.
It is why the BHA is absolutely right to continue pursuing their Authorised Betting Partner policy, which ensures those who have signed-up pay racing a percentage on their gross profits, irrespective of whether bets are processed domestically or overseas.
Of course, while the big bookmakers – including William Hill, Ladbrokes, Coral and Betfred – remain outside of the ABP tent, little by little more betting operators are seeing this as an opportunity for them to get closer to racing through sponsorship and other benefits. It is yet another reminder of the importance of racing to betting. Let nobody tell you any different.