Racing and betting urged by government to reach voluntary agreement on levy rate change

Racing and betting have been urged by the government to “not go back to square one” and come together to agree a voluntary change to the levy rate paid by bookmakers to the sport.

The push for the two sides to reach a conclusion came from sports minister Stephanie Peacock, Labour MP for Barnsley South, during a Westminster Hall debate on government support for British horseracing that had been arranged by Nick Timothy, Conservative MP for West Suffolk.

Negotiations between the two groups had been nearing a conclusion in May before prime minister Rishi Sunak called a snap general election, resulting in the collapse of the discussions.

In the aftermath, there was a dispute between racing and betting over whether an agreement was on the verge of being signed, although during Thursday’s debate Peacock said a proposal from bookmakers to increase the rate of levy to 11.5 per cent from ten per cent had been deemed “reasonable” by racing and that the “majority” of the increase would be set aside for a growth fund to generate interest in the sport.

Peacock said: “The minister for gambling has met with representatives from both industries and has encouraged a voluntary deal that fairly reflects the relationship between racing and betting and we will be writing to both sides soon. I understand that both parties agreed to a value for a growth fund for the sport and we look forward to hearing progress on this. 

“In the absence of any current legislative opportunity to impose amendments to the levy, the government is inviting betting and racing to resume negotiations on a voluntary deal. We think this is the best and fastest option of getting additional money flowing to the sport, and I share the hope that the parties will not go back to square one and the parties will reflect on the areas where there was an agreement.”

Stepanie Peacock: sports minister spoke at the debate

The government had been pressed during the debate to expand the levy’s reach to bets placed in Britain on overseas racing, a move that racing has previously estimated would bring in an additional £20 million annually, but Peacock ruled out any likely changes in the near future.

“I know there are strong arguments on both sides, but I think we should focus on what’s achievable in the short to medium term,” she said. “While it is true racing in other jurisdictions benefits from British racing in a way that is not reciprocated, the funding mechanisms in Ireland and France offer more centralised state systems and there are fewer opportunities for the commercial deals which we have in Britain.”

Timothy, who replaced Matt Hancock in July as MP for West Suffolk, the constituency containing Newmarket, said that while pressing for a voluntary agreement was understandable, the government had to be prepared to act to ensure a levy deal was agreed.

“I would gently like to say that the minister is in government now and that means there's power. It may not be enough to convene conversations and hope we reach voluntary agreements,” he said. “In the end, ministers often need to decide and I would like to encourage her and the secretary of state to be a little bit firmer. Sometimes that involves making decisions that interested parties don’t want to hear.”

Fifteen MPs made speeches praising racing for its role in soft power, employment, the community and contribution to Britain’s finances during the debate, for which Arena Racing Company chief executive Martin Cruddace and Rachel Hood, a Conservative councillor and wife of trainer John Gosden, were among those in attendance.

The impact of affordability checks on racing was also flagged by MPs alongside the threat of unintended consequences of legislation, such as pushing punters to the black market. 

In response, Peacock said it was important to “strike a balance” between acting on problem gambling and placing undue restrictions on bettors. 

She added: “The Gambling Commission is leading the pilot work on financial risks checks and we will be watching those with interest, but I have heard members' concerns and I will reflect them to the gambling minister.”

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