Punters could be hit by minimum betting margin proposals

In a move which could lead to poorer value for punters if implemented, British racing's leadership has been discussing the creation of a 'minimum betting margin' as a way of mitigating the potential loss of income for the sport caused by the government's decision to cut FOBT stakes to £2.

Online bookmakers have been accused of using the sport as a loss leader to attract new customers, with thin margins and offers being deployed which cut their profits on the sport and in turn reduces the amount of levy income the sport receives.

A minimum betting margin would reverse that at the expense of punters as a result of worse prices, although racing would need to convince government that such mitigation was necessary after the FOBT stake cut comes into effect, which might not happen until 2020.

The prospect was raised by Racehorse Owners Association president Nicholas Cooper in his statement in the body's annual report for 2017-18.

Racing's leadership has said the sport's income could be reduced by between £40 million and £60 million a year if bookmaker predictions that as many as 4,000 betting shops could close as a result of the government's decision on FOBTs proves correct, principally due to lost media rights as well as lost levy.

In the immediate aftermath of the announcement on FOBTs, culture secretary Matt Hancock said the government would look to extend the levy to money bet on foreign racing to make up some of the shortfall in racing's income.

That is understood to be racing's main focus but, with margins already lower online than in retail and with the FOBT decision set to accelerate the switch to online betting and increase pressure on racing's income, the sport has mooted a base margin or minimum guarantee as a measure to government.

Cooper said: "There has been some early discussion about the possibility of creating a minimum betting margin in an attempt to close the loophole that often occurs when bookmakers, using racing purely as a marketing tool, bet to a near-zero margin, thereby producing virtually nothing for the levy."

A spokesperson for William Hill said they had not seen any detailed proposals and would examine them when they received the detail.

Cooper described the possibility of extending the levy to overseas betting as "very promising", adding: "The example of Ireland, in particular, shows what a difference this could make. A lot of British-based punters bet on Irish racing without our levy benefiting, yet Irish racing generates revenue from British racing."

He also said it must be hoped that racecourse pool betting project Britbet and Betfred and their new pool betting partners the Alizeti consortium "end up working very closely together for their mutual benefit" as "liquidity of tote pools is the name of the game".

He added that winning over sophisticated punters "could be one of the keys to success for pool betting in this country".

Cooper said: "Not only must the high-staking sector of the market see evidence that pool betting can offer good value, but they must also be attracted by the size of stake they can place.

"As this new era for pool betting begins to unfold, it will be fascinating to see if Britain’s traditional fixed odds punter can ever be sufficiently enticed away from the type of betting they have always preferred.

"Achieving a significant increase on pool betting’s current five per cent of the horserace betting market is going to be difficult but, now with the various factions talking, there is at least a fighting chance."

The ROA's annual meeting takes place next Tuesday when three members of the 15-strong board – Stephen Smith, Justin Wadham and Lynn Douglas – will step down.

Nine candidates are contesting the three positions with two current incumbents, Paul Duffy and Charlie Parker, standing again.

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