Levy agreed at the last minute, as usual

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

As is usually the case, the 51st Levy Scheme was agreed by the Levy Board in the final few hours of 31 October, the statutory deadline for agreeing a scheme. Neither the bookmakers nor racing would have wanted the scheme to be referred for determination by the Secretary of State, whose patience would have been tried even further following his need to intervene to settle the terms of the current 50th Scheme. The scheme proposed by the bookmakers was approved by a 4-3 majority with the three Government appointed members of the Board siding with the Chairman of the Bookmaker's Committee.

The new scheme, which will come into effect on 1 April 2012, is largely the same as the current scheme but, for the first time, contains guarantees by the three largest bookmakers and by Betfair that their combined contribution will be at least £45m. The bookmakers' aggregate estimated yield of the 51st Levy Scheme is £72.4m and it is this estimate which was the principal reason for Racing's three Board representatives voting against the proposal in that it fell below the bottom end of the range of £73.7m-£80.8m determined by the Secretary of State as being the appropriate yield for the 50th Scheme.

The Government appointed members issued a separate statement setting out their reasons for supporting the bookmakers' proposal in which they mention Racing's "significantly enhanced revenues through the sale of media rights" but it is also clear from their statement that they too wanted to avoid a second consecutive referral to the Secretary of State.

This issue was, of course, being discussed against the backdrop of the Gambling Minister's consultation on reform of the Levy and in a House of Commons debate on the funding of horseracing on 22 November, the Minister, John Penrose, stated that: "While we may have started with the three options that I laid out to get the conversation started, we are moving on from them. I am taking the approach that if the gambling and horseracing industries can come up with something that they are both willing to sign up to, which satisfies basic principles of fairness on each side, it is not up to politicians to second-guess or contradict what the two industries can agree." So Mr. Penrose seems to be passing the parcel back to betting and racing to try to agree a common approach but this begs the question of what, if anything, the Government will do if no mutually agreed solution is forthcoming.