|Online exchange Betfair have agreed a £40m deal to help fund British horse racing.
The five-year agreement will see the operators contribute 10.75% of all horse racing revenues generated by their UK customers to British Racing, a group comprising of the British Horseracing Authority (BHA), the Racecourse Association and the Horsemen’s Group. Betfair say the arrangement will be worth at least £40m.
The landmark agreement will see British Racing guarantee a minimum number of race fixtures per year, with Betfair’s betting data used to help construct an attractive fixture list.
The deal replaces Betfair’s current annual voluntary contribution to the Horserace Betting Levy, with the £6.5m Betfair have already paid to the 2012/13 Levy offset against payments due under the new agreement.
The deal was announced just as bookmakers William Hill and the BHA were set to launch legal proceedings designed to force Betfair’s bigger gamblers to contribute to British horse racing, arguing that the volumes of money they deal with on the exchange mean they should be licensed and taxed in the same way as traditional bookmakers – although the BHA have since withdrawn their support for the judicial review.
The new Betfair arrangement could become standard practice for the industry, with the Department for Culture, Media and Sport (DCMS) likely to consult on proposals for a reform or abolishment of the current 50-year-old Levy system later this year.
The Levy is considered outdated by many in the industry as it only applies to revenues generated from firms licensed in Great Britain, meaning bookmakers have been able to move their online operations abroad and avoid having their online racing revenues included in Levy negotiations.
Betfair’s chief legal and regulatory officer Martin Cruddace said: “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.
“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.”
Paul Bittar, chief executive of the British Horseracing Authority, added: “The agreement 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.”