Thursday 14th October 2010
The Horserace Betting Levy Board has released its Annual Report today, which includes the audited accounts for 2009/10.
In his Chairman’s Statement, Paul Lee, who became Chairman in October 2009, refers to:
• The role of HBLB becoming more vital as the issues it faces become increasingly complex
• HBLB having collected and distributed nearly £1bn in the last decade
• Taking on “some long running issues that need to be addressed”, including HBLB having argued to Government that offshore operators should be levied
• HBLB having cut its own costs by a further 13% over the past year and now operating with a smaller team
The Chairman also notes that, in the period 2006-2010, HBLB will have spent in excess of £60m more than it has collected, adding that:
“In hindsight it is possible to be of the view that one of the key decisions over the last few years made by the Levy Board has proved to be strategically flawed. That was the use of reserves to keep prize money at a higher level than was justified in terms of how much the Levy was actually producing. Therefore prize money was in effect kept at an inflated and unsustainable level because of a wish to improve consistently prize money levels or at least not reduce them beyond levels which had been set when the Levy was producing a larger amount of money.”
He goes on to say that:
“Our lack of reserves make it impossible for us to continue as we have recently. We will continue to run as efficiently as possible but that is not enough. If the benefit to British horseracing which the Levy has brought about through its support is not to be lost, others must step forward to share the burden. Racecourses have recently enjoyed, and it is forecast will continue to enjoy, increased revenues because of higher prices paid to them for picture rights. I hope they explore in particular whether funds from them can be made available, as some are beginning to do. The industry must look at itself and see whether its cost base is appropriate and indeed whether its costs are spent in the most effective and efficient way.”
The Annual Report notes that HBLB has:
• Proceeded with a consultation exercise which invited views and representations from all those with an interest on questions relating to and arising out of the issue of whether certain users of betting exchanges should be regarded as leviable bookmakers
• Worked closely with the Bookmakers’ Committee to explore ways in which HBLB can receive reliable and accurate Levy yield forecasts for future budgeting purposes
• Provided funding to enable the switch of midweek winter evening fixtures to twilight slots, producing additional net Levy revenue of around £400,000
• With support of the Betting Patterns Working Party, obtained information via the Bookmakers’ Committee about turnover on and profit from 26,000 races since 2007 to inform and accurately make decisions in the fixture process
• Supported Racing for Change and contributed £1m to the costs of racecourses of maintaining Channel 4 television coverage of racing
HBLB’s accounts show that total Levy yield for the 48th Levy Scheme (2009/10) was £75.4m, a fall of 17% on the 47th Scheme’s yield of £90.6m. This decline is attributed to a variety of factors including the decision by a number of bookmakers to move their internet operations offshore in 2009 and accordingly not pay levy on that business; current economic conditions; lower staking levels; good results for punters, including reports of a successful year for high-staking punters; and weak margins. A larger number of Licensed Betting Offices are trading below the designated threshold level and consequently paying an abated rate of Levy.
The 2009/10 Annual Report is available to download as a PDF here.