Racing industry cautioned over levy stance
A leading gambling consultant has warned the UK horse racing industry not to force bookmakers into giving up on the sport.
With the point-of-consumption tax putting pressure on operators’ margins, Steve Donoughue believes that the rising cost of the levy could see bookies walk away from racing.
“There are people in bookmaking who believe racing is going a bit too far – asking for more and more levy, asking for more money for pictures – I think that’s what’s got them so riled up,” says Donoughue.
“What racing has to be wary of is that the more it increases the price of its product – a product which has been in decline for a number of years, compared to other products – the less likely bookmakers are going to go for it.
“There is no indication of a growing appetite for the product, and there will come a point where bookmakers just say ‘I’m afraid we can’t afford to do it’.”
There is no indication of a growing appetite for the product, and there will come a point where bookmakers just say ‘I’m afraid we can’t afford to do it’Steve Donoughue
He added: “A good analogy is a trade union forcing strikes on a company to the extent the company closes down.”
Discussions on the 55th Levy Scheme for 2016/17 recently came to an end without agreement, meaning the decision on how much money operators taking UK horse bets must pay to racing will be taken by culture secretary John Whittingdale.
Donoughue also believes that the racing industry is “rather keen” on the idea of a ‘Racing Right’, which was included in George Osborne’s March budget speech as an alternative to the levy.
However Donoughue doesn’t think a Racing Right is an appropriate solution to the problem, and believes that even the government itself isn’t so convinced by the idea.
“My impression of the Racing Right is that it was more to do with getting George Osborne’s friend [West Suffolk MP] Matthew Hancock re-elected than being a serious approach to the future funding of racing,” he says.
“The Tories didn’t believe they were going to win the general election, so there were a number of policy proposals which were put out there purely for the election.
“The Racing Right meant that Matt Hancock could go to the good people of Newmarket and say ‘look, we’re having a Racing Right, all our problems are solved’.”
Donoughue continued: “We’d better solve this issue once and for all, but I don’t think the Racing Right is the answer.
“They’ve just got to keep banging their heads together.”
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