The UK racing industry is in full freakout mode on news that their annual kickback from the betting industry will be \u00a317m lower than expected.<\/p>\n
On Friday, the\u00a0Horseracing Betting Levy Board<\/strong>\u00a0(HBLB) announced that the expected Levy income for the fiscal year ending March 31 will total around \u00a378m. This sum is \u201cmaterially below expectations,\u201d based on\u00a0the \u00a395m racing collected<\/strong>\u00a0the previous year, the first year that the new 10% Levy was applied to\u00a0UK betting operators\u2019 online operations<\/strong>.<\/p>\n HBLB chair\u00a0<\/strong>Paul Lee<\/strong>\u00a0said that, based on UK bookie reports at the end of 2018, the racing sector\u2019s latest annual handout was expected to come in around \u00a389m. However, more recent submissions from bookmakers revealed that race bettors took the bookies to the cleaners in February and March, resulting in \u201cvery substantially less profitable\u201d returns to close out the fiscal year.<\/p>\n Should that \u00a378m forecast prove accurate, the HBLB says it will incur a \u00a35m budget deficit. The HBLB had already agreed on an expenditure budget of \u00a399m for the 2019-20 fiscal year, but this will now be cut by \u00a35m, with additional cuts possible before the fiscal year is through.<\/p>\n The majority of HBLB\u2019s spending goes toward prize purses, and so the majority of the spending cuts are expected to come from prize money. The HBLB membership, which consists of the Racecourse Association, The Horsemen\u2019s Group and the\u00a0British Horseracing Authority<\/strong>, are currently brainstorming on how to minimize the fallout.<\/p>\n But the HBLB also declared that \u201cthe issue isn\u2019t the popularity of racing as a betting product, but rather its potential profitability. As the Levy is based on those betting profits, that is clearly concerning for all in racing.\u201d<\/p>\n As such, the HBLB said it would huddle with both bookmakers and the government as to \u201cwhether any systemic issues are emerging that need to be addressed.\u201d The implication is that the HBLB may pursue tweaks to the new Levy formula, because God knows we can\u2019t have racing sharing the bookmakers\u2019 pain.<\/p>\n NEW ZEALAND SCRAPS RACING LEVY<\/strong> Peters said the levy, a 4% cut of betting profits that totaled nearly NZ$14m in 2018, would be phased out over a three-year period, with the funds redistributed to the racing and sports sectors, as well as responsible gambling programs.<\/p>\n Scrapping the levy was a longheld goal of the Kiwi racing industry, and was one of the recommendations of last year\u2019s\u00a0Messara Report<\/strong>, which also called for outsourcing all of the New Zealand Racing Board\u2019s \u201cdomestic wagering, broadcast and gaming operations.\u201d<\/p>\n The Report justified its recommendations based on its belief that Kiwi racing, similar to the racing sectors in virtually all other jurisdictions, is \u2018in a state of serious malaise.\u201d But hey, that\u2019s nothing that yet another round of artificial financial backstops won\u2019t fix, right?<\/p>\n
\n On the other side of the world, New Zealand\u2019s Racing Minister\u00a0Winston Peters<\/strong>\u00a0announced Thursday that the government was repealing the betting levy the racing industry pays the government.<\/p>\n