British government officials are making big waves for the U.K. betting industry. Plenty of news has rocked the industry's boat this week--none more than the High Court's decision against offshore bookmaker Victor Chandler. Yesterday, the Home Office announced that the Tote, the state owned pari-mutuel betting service, will likely be sold to a trust put together by the racing industry. Additionally, the Home Office said that the Horserace Betting Levy Board and the levy system should be abolished.
The announcements are based on conclusions from the quinquennial review of the Levy Board and are in response to written parliamentary questions from Bill Olner, MP. Legislation must be brought before Parliament, however, before any of this can happen.
Tote Chairman Peter Jones is delighted with the government's plan. "We worked hard with the British Horseracing Board and the racecourses to put a proposal to government that would secure the Tote's valuable source of funding for the sport," Jones said. "We are confident that the racing trust will enable the Tote to continue to grow, and produce an ever greater financial return for the benefit and development of the sport of horseracing."
British Horseracing Board Chairman Peter Savill echoed O'Brien's sentiment. "It has been one of my key objectives since I became chairman of the BHB to encourage government to withdraw from the commercial side of racing," Savill said. "That they have agreed to transfer the Tote to racing and abolish the levy is evidence of the faith that they are putting in racing and in particular the BHB."
Savill continued, "In the next few years new arrangements for media rights and new contractual arrangements between racing and betting will be put in place. It is BHB's responsibility to assist in the maximization of these income streams and to ensure that they flow properly through the industry so that we maintain our position as a pre-eminent racing nation."
Home Office Minister Mike O'Brien says the decision to sell the Tote and abolish the levy system "signals the government's strategic withdrawal from its direct involvement in the administration and financing of racing. It is time for racing and bookmaking to work together like other mature industries."
O'Brien added, "The British Horseracing Board, as racing's governing body, will be asked to prepare a realistic plan to show how racing would operate without a statutory levy. We will work closely with racing, bookmakers and others to ensure that these important industries prosper in the future."
Jone says the Tote has exciting plans--plans that will "encompass new technology, new partnerships and new generations of bettors"--for future development.
How the Tote's sale will affect British bookmakers is unclear. Barry Faulkner, secretary of Bowler (the bookmakers' trade association) told the Financial Times that the Tote's sale could create a complex monopoly in which the British Horseracing Board would control the fixture list and also control betting. Keith Oliver of Sports Internet suggests, however, that the Tote's sale will have little effect on bookmakers.
The Financial Times reports that the Tote sale could net about £150 million pounds (US$237 million).
The quinquennial review of the Levy Board can be viewed at:
http://www.homeoffice.gov.uk/ccpd/hblbrev.htm