The UK’s Horserace Betting Levy – The 50th episode in the farce
On Sunday night bookmakers and racing failed to agree a levy which must now go to the Minister for determination. The long running saga that began in June is over. If it were a TV show everyone would have turned off long ago, it is so infuriatingly repetitive and boring. Every year the episodes are the same:

Episode One – The Offer
The Levy Board coax and urge the bookmakers to make their offer as early as possible. It helps with planning they are told. We need to plan ahead.

Episode Two – The Meeting
The bookmakers meet under the auspices of the Bookmakers Committee. They debate for hours the state of the industry and what they can reasonably afford taking account the product, the economy, jobs and return on investment. The offer is normally higher than most bookmakers would like it to be but necessary to try to get a deal. The bookmakers, wishing to assist the Levy Board, present their offer.

Episode Three – The Knock Back
The offer is refused. It is always refused. Even if the bookmakers offered double the amount it would be refused – not that they are likely to test this theory!

Episode Four – The Consultants
The Levy Board appoints consultants. There are three government appointed members, all well-qualified. But if you can find someone else to agree with you when racing and bookmakers do not, then why not appoint some consultants?

Episode Five – The Report
The consultants talk to everyone and write up a report. The report is usually constrained trying to reach a balanced view so as to facilitate a deal. Reading between the lines this year it was obvious that Deloitte considered racing’ case to bear no resemblance to reality. They had not made a business case to support their arguments in spite of Sir Philip Otton, the previous consultant, urging them to do so. Racing immediately rubbishes the report, says it needs more money, and they want it now. The bookmakers say, “We have made our best offer. P.S. have you seen the economy? We are in recession”.

Episode Six – The PR machine
Racing moves its truly magnificent PR machine into overdrive. This year they produced a petition at Newmarket and the jockeys signed it. Michael Howard, the ex-Tory leader and chairman of Northern Racing, said that bookmakers offshore should pay levy.

Unsurprisingly, ratings in this Levy soap opera have been falling because no one is interested in this long running saga – so, god bless ‚Äòem, the BHA has come up with a new twist. Rubbish the bookmakers’ Levy yield forecast.

The DCMS is watching closely. Minsters do not relish having to determine a Levy. It may have something to do with making a decision which maybe unpopular with one section of the industry.

In fact the government is proposing that the Minister be taken out of the process.

Episode Seven – The Rumour Mill
It’ those last few days before the deadline. All sorts of stories start to fly. The Minister will be displeased to have this on his desk. He could look at B2 machines (FOBTs) in shops. He could raise the rate on determination. He may punish racing by ending the levy. Or sell the Tote and give racing nothing from the proceeds. Tensions rise and second guessing takes priority.

Episode Eight – The Shakedown
Representatives for racing and the bookmakers assemble at the Levy Board offices. They meet, breakup, meet, break up, meet, break up – all day! The government appointed members and racing tend to sit together, the bookmakers are left on their own with the occasional interruption when racing has something to offer. A process designed to wear the incumbents down.

Episode Nine – The Grand Finale
Either a deal is done, in which case there is relief all round, until the bookmakers get back to their offices and the finance directors say “You agreed how much!”. Or racing goes back and its constituents, who have been fed on a continual diet of PR not based in reality, proclaim the bookmakers have had us over again.

By doing a deal the incumbents feel they have not wasted their time, it was all for something.

No deal leaves a wretched feeling where each side constantly questions whether they could have done something to have made a difference. No deal means that both sides now have to plead to the Minister through the determination process.

The odd thing is that this whole process is governed by law which parliament thought appropriate at the time. It isn’t the bookmakers’ or racing’ rules, it is law.

It is a process that pleases no one. It is a process that harms what should be a good relationship between supplier and customer.

For those who have been following this for 50 years, don’t worry. Episode one will start over again on the 1 November 2010.


Warwick Bartlett is Chief Executive of GBGC, a betting shop owner, has served as chairman of the Bookmakers’ Committee and is currently chairman of the Association of British Bookmakers (ABB). He is a long-standing viewer of the Levy soap opera.