The British Horseracing Authority and betting exchange Betfair have completed a new profit-sharing deal that will guarantee racing £40m over the next five years.
Importantly it is to apply pressure on fixed-odds bookmakers who have relocated their business offshore in order to make tax savings and avoid payments to racing through the Levy agreement, whereby a percentage of profits from off-course bookmakers is paid to contribute to the funding of the sport.
The deal will see Betfair hand over a minimum of 10.75% of their profits on British racing from UK customers to the tune of an estimated £40 million, still leaves a substantial hole in the sport's funding compared to previous golden years. However, it brings to an end the uncomfortable uncertainty that was seeing the exchange make only ‘voluntary payments' to racing.
John Penrose MP, who has made clear his desire to extricate the department of culture, media and sport from involvement in the relationship between racing and bookmakers, said: “The government has always believed there should be a commercial relationship between British racing and betting operators. Betfair's willingness to be the first operator to do a deal is impressive and admirable. I hope others will follow swiftly in their wake.”
BHA chief executive Paul Bittar was celebrating the prospect of an improved business relationship between the sport and one of the biggest players in the betting market.
“We are delighted that we have been able to reach an agreement with Betfair, one which represents a landmark for both the racing and betting industries,” he said. “We hope that similar arrangements with other betting operators will follow. In parallel British racing also seeks long-term deals such as this to assist in the transition to a wholly commercial future.”