The European Commission has approved the UK’s plans to reform the existing horserace betting levy scheme to include offshore bookmakers, which have been judged to be in line with EU state aid rules
The reform will subject offshore bookmakers to the levy, whereas currently only bookmakers based in the UK contribute to the financing of horse racing. It will establish a 10% levy on the gross gambling yield (GGY) applied to all betting operators for their part of the GGY above a de minimis threshold of £500,000 a year.
The new rules come into effect from 1 April 2017. Under the current system offshore online betting businesses that take bets on British racing are under no statutory obligation to contribute to horseracing, although some make voluntary contributions.
The Commission said it has approved the measure because ‘it recognises that it is essential for the improvement of horse breeding and horseracing without giving rise to undue distortions of competition.’
It also argued that the measure creates a level playing field among betting operators while at the same time supporting entry of new operators and the development of competition between betting operators, thanks to the de minimis threshold.
The levy scheme will apply to all operators who offer bets on British horseracing by UK-based customers, including pool betting, betting exchanges, on-course bookmakers and on spread bets.
The rate is set to be reviewed within seven years of the legislation coming into force to ensure that it reflects any future changes in the market.
The levy funding will be passed on by the Gambling Commission to a nominated racing authority, that will act on behalf of British racing and be responsible for making decisions on spend in a range of areas including prize money, integrity, equine welfare, veterinary science, and the mental and physical wellbeing of participants.
This Commission decision will apply until the UK ceases to be a member of the EU.