Tuesday 1st November 2011

Levy Scheme for 2012/13 Agreed

The Horserace Betting Levy Board last night agreed the terms of the 51st Levy Scheme (1st April 2012 to 31st March 2013). Recommendations from the Bookmakers’ Committee were approved by the Board by a majority vote.

It is estimated by the Bookmakers’ Committee that the 51st Levy Scheme, on the basis agreed, will yield £65.9m. The three largest bookmakers - William Hill, Ladbrokes and Gala Coral - have agreed to guarantee that their combined contribution in the 51st Levy Scheme period will be not less than £45m. In addition, Betfair has undertaken to provide £6.5m. Hence, the Bookmakers’ Committee’s aggregate estimated yield of the 51st Levy Scheme is £72.4m.

It is estimated by the Bookmakers’ Committee that, on latest assumptions, the current (50th) Levy Scheme will yield £65.4m. In addition, Betfair has already paid £6m to the Levy Board. Hence, the Bookmakers’ Committee’s aggregate estimated yield of the 50th Levy Scheme is £71.4m.

The 51st Levy Scheme will in most respects continue the terms of the 50th Levy Scheme with a headline rate of Levy at 10.75% of bookmakers’ gross profits on British racing, and with uprating for inflation the thresholds applicable to Licensed Betting Offices (LBOs) and the fixed-sum payments in certain other categories. The new Levy Scheme does, however, adjust the arrangements for relieving the Levy’s impact with the introduction of a rebate for each LBO and the application of thresholds only to operators with 100 or fewer LBOs.

Levy Board Chairman Paul Lee said:

“I believe that the offer that has been accepted should deliver to Racing significant benefits.

“The offer of guaranteed contributions by the major operators provides more certainty for all parties and valuable assistance for the Levy Board’s financial planning, as does Betfair’s commitment to an increased voluntary contribution of £6.5m in the 51st Levy Scheme period.

“The Board will be giving immediate consideration to expenditure for 2012 in the light of the resolution but, as a provisional indication, we expect to be able to plan to spend around £65m next year, an increase from £60m in 2011.”

The details of the 51st Levy Scheme (and the corresponding details for the 50th Levy Scheme) are as follows:

(a) Licensed Betting Offices


Each LBO will pay 10.75% of its gross profits on British Horserace Betting Business (BHBB). For an operator with 100 or fewer LBOs, an abated rate will apply to those of its LBOs (up to a maximum of 30) which have gross profits on BHBB of less than £52,500. Operators with more than 100 LBOs will pay at the full 10.75% rate on each outlet.

(50th Levy Scheme: 10.75%; threshold rate £50,000, applicable to all LBOs with no restriction per operator)

(b) Telephone and Internet


Each telephone and/or internet operator will pay 10.75% of its gross profits on BHBB.

(50th Levy Scheme: 10.75%)

(c) Spread Betting


Each spread betting operator will pay 2.15% of its gross profits on BHBB.

(50th Levy Scheme: 2.15%)

(d) Betting Exchanges


Each bet-broker including betting exchanges will pay on a basis equivalent to 10.75% of its gross profits, defined as gross commission on BHBB deducted from the winnings paid out to bettors and bet-takers.

(50th Levy Scheme: 10.75%)

(e) On-course Bookmakers


Each on-course bookmaker will pay a fixed contribution of £220.

(50th Levy Scheme: £210)

(f) Point-to-Point Bookmakers


Each bookmaker conducting BHBB on Point-to-Point and/or Harness Racing and/or trotting events will pay a fixed contribution of £175.

(50th Levy Scheme: £166)

(g) Flat Rate Rebate


A Flat Rate Rebate of £400 for the first 30 LBOs in any chain and £185 for all other LBOs will be applied. This will be a sum deducted from the bookmaker’s 51st Levy Scheme liability during the year-end reconciliation.

(50th Levy Scheme: no equivalent)