Jockeying for change

RayCollins.jpgRay Collins on amending the Gambling Bill so that all operators taking bets on UK horseracing pay the levy

Most of us have placed a bet on a horse race at one time or another. Few however, realise that racing is also the second largest sporting employer, supporting a predominantly rural industry making a significant contribution to the UK economy and providing direct and associated employment for 85,000 people.

This is why Labour is backing a cross-party amendment to the Gambling Bill in the Lords, to capture the revenue that should be paid – as Parliament has already determined – from all betting operators who take on-line and telephone bets on racing in Britain, wherever they are located. In effect, it will secure horse-racing levy payments from those operators who the bill brings within the remit of the UK tax regime, and who will need a Gambling Commission licence to be allowed to continue to operate in our market. 

This change in arrangements would be worth up to £20m a year to British horseracing and would undoubtedly lead to a healthier sport, more investment, growth and jobs. Too often, people just focus on the prize money and don’t see the work on training, education and employment initiatives that the levy supports. Nor do they see the broader picture of how the industry has a direct link into building sustainable rural economies.

Why should onshore betting operators and those in betting shops pay the full levy while others based overseas who don’t have a voluntary agreement pay nothing? I also understand the frustration for racing of seeing the government act to have overseas betting operators comply with Gambling Commission regulation but not harmonise the system so they pay the levy. Especially when Parliament has already decreed they should.

We have heard the arguments before that any reform to the levy to capture revenues under a Point of Consumption licensing regime would constitute State Aid – an interpretation that British horseracing strongly disagrees with. Indeed, a recent and comprehensive ruling from the European Commission has addressed the issue. A French Parafiscal Levy on online horserace betting has been approved, recognising its special status and common interest with the industry. This sets a vital precedent, and is now being reviewed by DCMS lawyers. It is clearly better that we rely on new legislation rather than have yet another round of dispute, delays and messy court cases that do little but hurt racing.

In the long-term, the government may want to consider a more modern and commercial framework for the levy, something which racing would support. But with the best will in the world, the sport will be waiting several more years for that, while all the while losing out on a vital source of income. Action has long been required and Ministers must simply not allow a once in a Parliament opportunity of primary legislation to pass. 

Clearly there is a strong argument for further consultation, and to assess the implications of the European Commission’s ruling on State Aid. The reserve power provided for in the Lords amendment allows that to happen, giving the government the opportunity to consult with the Commission – and if the route of action is considered the right one, the power to act.

Lord Ray Collins of Highbury is a member of Labour’s frontbench team in the House of Lords. He tweets @Lord_Collins

Published 4th March 2014

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