Betfair Agrees To $62M Deal With British Racing
Betfair has agreed a £40M ($62M) funding deal with British Racing in "the first commercial arrangement by a gambling operator with the struggling sport," according to Thompson & Blitz of the FINANCIAL TIMES. The betting exchange company said it had "agreed to pay British Racing, made up of three bodies in the industry," 10.75% of all profits from bets placed on U.K. horseracing over five years and a minimum of £40M ($62M) "in return for a guaranteed number of races." MP Tourism and Heritage John Penrose "backed the deal and praised Betfair for being the first operator to sign a commercial arrangement with racing." Penrose said, "I hope others will follow swiftly in their wake." Jockey Club CEO Simon Bazalgette, whose organization owns and runs 14 racecourses, described it as a "landmark deal which put racing on a surer financial footing" (FINANCIAL TIMES, 7/4). In London, Will Hayler reported that a truce between the British Horseracing Authority and Betfair has "led to the completion of a new profit-sharing deal." The agreement will see the sport work with Betfair "on shaping the future programme," with confidential agreements having already been reached over the "size and nature of the fixture list." More importantly, it is also likely "to apply pressure on fixed-odds bookmakers," who have moved 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 (GUARDIAN, 7/4). The BBC reported that most major betting firms, including Betfair, "now run their online operations outside the U.K." That means they are liable to pay tax and horserace levy only on business done within the country as opposed to their total global operations. However, until now, Betfair has "voluntarily paid the U.K. horse racing levy as though it were still British-based." The new agreement "will replace this previous ad-hoc agreement" and will take effect from the 51st Levy Scheme, which covers the '12-13 racing season (BBC, 7/4).