Horseracing wants online commitment from a merged Ladbrokes-Coral

Horseracing wants online commitment from a merged Ladbrokes-Coral

Friday, July 8, 2016 Posted by Andy McCarron
The BHA believes that the CMA should force the two bookmakers to pay more to the sport

The British Horseracing Authority (BHA) is lobbying the Competition and Markets Authority (CMA) to force Ladbrokes and Coral to pay a levy on its online British horseracing revenues in order to progress with their merger.

A letter from BHA chief executive Nick Rust to the CMA regarding the potential merger between the two bookmakers was published yesterday, with Rust arguing that horseracing will be negatively affected by the lack of competition, both for media rights and the horseracing odds offered to punters.

His organisation’s suggestion is that the bookmakers be forced to pay the Horseracing Betting Levy on its online business under the merged entity, as they already do for their respective retail estates, even though the government has announced proposals to make all online operators pay a licence for offering British horseracing to be implemented by next April.

Rust argues in the letter: “In our submission of 1 February, we outlined that a potential remedy could be a requirement that the Merged Entity contributed to the funding of British Racing across all of its distribution platforms (retail and remote) – as at present both Parties do not contribute to the Horserace Betting Levy from profits on their remote businesses.

“While Government has outlined its intention to reform the funding of British Racing on a statutory basis by April 2017, the Inquiry Group could require as a remedy that the Merged Entity contributes to the Levy through its online business in advance of the statutory introduction of the replacement system. We believe that this would be justified as it would ensure, through a more sustainably funded British Racing industry, a ‘higher quality’ product for UK betting customers to bet on.”

The gambit is the latest move by the BHA to encourage UK bookmakers in general to pay more money to the sport. This year saw the introduction of the Authorised Betting Partner (ABP) classification, where only bookmakers who the BHA deem to have provided appropriate funding to the sport are allowed to sponsor or advertise around horseracing.

Retail bookmakers argue that the ABP isn’t transparent and favours online-only bookmakers – indeed none of the major retail names are ABP-listed - and have resisted the scheme, especially as they are paying a higher level of levy on horseracing for the business conducted in their betting shops.

The hugely fractious funding relationship between bookmakers and the sport, not helped by decades of enforced annual funding negotiations via the Levy Scheme, doesn’t appear to be healing any time soon.

Totally Gaming Says: “Part of the BHA’s argument is that Ladbrokes and Coral were prevented from merging in 1998 and that the reasons that scuppered that deal remain in play today. However the UK betting shop market is hugely different 18 years on, transformed by both competition from online and product diversification, not to mention huge increases in costs from horseracing media rights."

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