Betting Right faces European scrutiny over state aid rules

Betting Right faces European scrutiny over state aid rules

Monday, March 23, 2015

TotallyGaming.com understands that the argument over the proposed changes to bookmakers’ funding of UK horseracing could be heading for the European courts over accusations it may breach state aid rules.

While the racing industry has been keen to thank Helen Grant, the Minister for Sport, Tourism & Equalities, and the Department for Culture, Media and Sport (DCMS), over the announcement of the Horserace Betting Right (HBR), senior betting industry figures are unhappy about the proposal and are already predicting a tough passage for any legislation.

Even if it passes through the UK’s Parliament, the Government could encounter problems in Europe as it seeks to implement the new funding while not risking the loss of the Levy, which has been untouched by Brussels because it predates the UK’s entry into the European Union (EU).

Clive Hawkswood, chief executive of the Remote Gambling Association (RGA), told TotallyGaming.com: “It is important to remember that, despite the Government’s announcement, this is still a long way from becoming law.

“Nothing will be done before the election and then we will have to see who forms the Government and what its legislative priorities are.

“It will then have to consult again on any draft legislation and produce a more robust impact statement than they have done to date, but crucially they will have to ensure that it is compliant with EU law and there is a very strong case to suggest that it could, for example, breach state aid rules.

“If that does prove to be the case then racing risks losing both the new right and the existing Levy.”

While the DCMS would not comment on criticism of the Right, the Government said that it would not risk losing the Levy when it began its extension consultation process last year. It remarked that ‘extending the Levy is a substantive alteration to an existing state aid so Government must notify the change to the European Commission and seek clearance to proceed’.

It added: “The Government will not extend the Levy without European Commission clearance because of the risks to racing of a net loss of Levy income.”

However, for now UK racing is happy with the proposal of a new funding method, with British Horseracing Authority chief executive Nick Rust saying: “The hard work will continue, throughout the forthcoming general election campaign and beyond, and with the betting industry, as we look to have a Racing Right introduced as soon as is possible.

“British racing – its governing body, racecourses and horsemen – has a collective desire for a modern and direct relationship with the betting industry, and believes that a Racing Right is the best solution to achieve this, and to secure the long-term prosperity of our sport and those within it.

“We are still in the situation whereby the vast majority of bets placed by punters outside of betting shops are making no contribution to the central finances of the sport. This is unsustainable, and there is recognition that this needs to change.”

However, Hawkswood believes the betting industry already pays enough towards the funding of racing. “The betting industry already makes a huge contribution to racing and most of that comes not through the Levy, but through truly commercial arrangements including the sale of the media rights that racing currently holds,” he added.

“We would argue that these commercial funding streams already constitute an adequate replacement for the Levy, but despite that we have repeatedly offered to work with racing and the Government to find ways to modernise the Levy system.”

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