In what is being hailed as a “landmark agreement”, Betfair has signed a five-year deal with the British Horseracing Authority (BHA) worth at least £40 million to the sport.
The betting exchange has agreed to pay 10.75% of all horseracing revenue from its UK customers, with guaranteed minimum payments assured, which will be used by the BHA to help underpin a minimum number of fixtures per year. The agreement takes effect from the 51st Levy Scheme (covering 2012-13) and will replace the existing voluntary Horserace Betting Levy payments made by Betfair.
The agreement has prompted the BHA to withdraw from a Judicial Review, which is due to start on Wednesday, against the Levy Board’s decision not to enforce exchange users to pay levy, which had been brought by the authority in association with William Hill.
Recently-appointed BHA Chief Executive Paul Bittar was at the forefront of the negotiations along with Simon Bazalgette, Group Chief Executive of The Jockey Club.
Bittar said: “We are delighted that we have been able to reach an agreement with Betfair, one which represents a landmark for both the racing and betting industries. It brings many benefits, including substantial and increased guaranteed funding as well as importantly providing certainty for the sport in relation to Betfair’s contribution. We hope that similar arrangements with other betting operators will follow.
“This agreement has required a high degree of co-operation both within Racing, with all the major organisations closely involved in negotiations, and of course with Betfair, who have shown great commitment in their intent to be a constructive commercial partner with our sport. In particular, I would like to recognise the BHA Chairman and the Board for their vision and unwavering commitment in pursuing improved and more stable financial outcomes for the sport, as without it the deal would not have been possible.
“We firmly believe both in the value of British Racing as a product and the need to work closely with the betting industry for our mutual benefit. Government has committed to bringing forward proposals to address the long-standing and damaging flaws in our current funding mechanism. We continue to engage fully in this process, but in parallel British Racing also seeks long-term commercial deals such as this to assist in the transition to a wholly commercial future.”
Commenting on behalf of Betfair, Chief Legal and Regulatory Officer Martin Cruddace added: “This deal is a genuinely historic moment. For the first time, British Racing and Betfair have proved it is possible for us to work together on a truly commercial basis. Of course it has not been easy but the end result completely justifies all the hard work.
“We hope that this marks a new era and call on other betting operators to adopt similar agreements to help ensure a strong, healthy and vibrant horseracing industry in this country.
“I would like to personally thank Paul Roy and those who have represented racing through this process for the time and energy they have invested in helping us all work together to bring about this deal.”
The government has hailed the ground-breaking agreement, with John Penrose MP, Minister for Tourism and Heritage at the Department for Culture, Media and Sport
commenting: “Betfair’s willingness to be the first operator to do a deal is impressive and admirable, as is the commitment of Paul Roy and Paul Bittar’s team at the British Horseracing Authority, without whom the deal would not have been possible. I hope others will follow swiftly in their wake.”