In our last update we reported on the battle between Turf TV and SIS and the potential ramifications for the Levy. Since then much has happened but there remains uncertainty as to the future of the Levy and racing's funding.
Just after Christmas, Gala Coral became the first of the leading bookmakers to break ranks by signing a deal with Turf TV and were followed soon afterwards by Ladbrokes and William Hill with BetFred today remaining the only major bookmaking chain still outside the Turf TV camp. However, despite this, the litigation between Turf TV, BAGS and SIS regarding the validity of the exclusive rights granted to the litigating parties by the racecourses is still continuing and, following failed attempts at settlement through mediation, is due to come to court at the end of April. In addition, the deals entered into by the large bookmakers have spawned further litigation since they enable both the Turf TV and SIS feeds to be delivered to their betting shops as a single channel which means that a seamless service can be provided to their betting shop customers. However, this single channel solution has not been offered to smaller so-called "independent" betting shops, some of whom have commenced proceedings against Turf TV requiring them to do so. A court hearing of an interim injunction application in this separate action has, however, resulted in the court refusing to allow the independent bookmakers to seek an expedited hearing, so this proceeding is unlikely to progress quickly.
Against this background, the racing and betting industries were anxiously awaiting the determination of the 47th Horseracing Betting Levy Scheme by the DCMS and this was finally announced on 20 February (click here
for the statement by the Minister for Sport). The bookmakers had been arguing for a significant reduction in the amount of the Levy to take account of the additional cost to them of having to subscribe to Turf TV as well as SIS; and racing was asking for a corresponding significant increase. To no great surprise, Gerry Sutcliffe, the Minister for Sport, decided to roll over the previous year's Levy scheme. However, he was clearly irritated by the failure of the two sides to reach agreement and, in an attempt to avoid a repetition, he has convened a meeting under the auspices of the All Party Racing and Bloodstock Industries Group. The objective is for the racing and betting industries to reach a commercial funding arrangement which will enable the Government to abolish the Levy and withdraw from its statutory involvement in horseracing.
The first meeting took place on 18 March and various working groups have been established to see if the holy grail of a commercial arrangement can be discovered. At annual meetings of the British Horseracing Authority and the Association of British Bookmakers, Mr. Sutcliffe reiterated his message that he expects the two industries to start talking straightaway. In what many saw as not a very subtle warning shot at the bookmakers, on the same day as announcing the Levy determination, Mr. Sutcliffe also asked the Gambling Commission to review fixed odds betting terminals and their effect on problem gambling.
However, throughout this decade the Government and racing have sought a commercial solution enabling the Government to repeal the Levy and withdraw from its statutory involvement in horseracing. Most recently, the Future Funding of Racing Review Group, chaired by Lord Donoughue, looked at this issue in detail, concluding that there was no legally watertight commercial system.
At the British Horseracing Authority annual meeting, Mr. Sutcliffe confirmed that he would not repeal the Levy unless and until a commercial replacement existed and, moreover, also said that if no commercial replacement could be found, the Government would be prepared to pass new or amending legislation.
Despite the Minister's encouragement for urgent action, given the manifold legal obstacles – and the ongoing legal proceedings between racecourses and bookmakers - it seems unlikely that there will be any resolution in the short term.
An article on the Levy written by Olswang partner David Zeffman and published in Owner & Breeder