Britain’s three largest bookmakers have agreed to pay an annual fee of as much as 72.4 million pounds ($115 million) to support the country’s horse racing industry.
William Hill Plc (WMH), Ladbrokes Plc (LAD) and Gala Coral Group will contribute between 45 million pounds and 72.4 million pounds to the British racing industry, the Horserace Betting Levy Board said in a statement on its website. In addition, British online gaming site Betfair Group Plc (BET) agreed to pay 6.5 million pounds.
“I believe that the offer that has been accepted should deliver to racing significant benefits,” Levy Board chairman Paul Lee said in the statement.
The levy program, which has been in existence for more than half a century, is valid for one year from April 1, 2012.
The agreement was reached minutes before the expiry of a midnight deadline last night following months of talks between betting companies and the racing industry. It means the U.K. government won’t have to intervene for a second straight year to determine the fee. Culture Secretary Jeremy Hunt last year set the 50th levy at between 73.7 million pounds and 80.8 million pounds.
The fee, which peaked at 105 million pounds in 2005-2006, has declined in recent years as bookmakers transferred their operations offshore. Betfair in March said it would move its license to Gibraltar. Ladbrokes and William Hill have also moved some of their operations to Gibraltar in order to reduce taxes.
The Jockey Club, the largest commercial group in British racing which manages and operates 14 racecourses including Epsom Downs and Aintree, is “disappointed with the level given the 1 billion pounds gross win the betting industry continues to enjoy just from U.K. bets on our sport,” it said in an e-mailed statement.
“British racing is the best in the world, but that remains under threat from this unsustainable, low levy funding,” Jockey Club Group Chief Executive Simon Bazalgette said in the statement. “We need to see rapid progress in the modernization of this critical funding for a healthier and more sustainable future for all concerned. The healthier British racing, the greater the benefits we can offer to the betting industry.”
The U.K. government in February increased the levy on bookmakers to 10.75 percent from 10 percent. The annual fee on the profits of bookmakers from bets on British horse racing helps fund the industry through veterinary science, prize money, training and breeding programs.