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Levy at ten-year high

Paul-LeeThe Government’s reforms to the levy system have produced the highest yield in a decade for British racing's central funding system.

The Levy Board's annual report and accounts for 2017-18, which was laid before parliament on Monday, reported a total annual income of £94.7 million– up 45.5 per cent from £65.1m and the highest figure since the levy yielded £115.3m in 2007-8.

The reforms allowed the Levy Board to collect levy for the first time from betting operators based outside Britain and, in his statement within the report, the board's chairman Paul Lee (pictured) said he was delighted the reforms were successfully implemented.

He added: "This is due in no small measure to the cooperation of the bookmakers who have been most constructive in their attitude."

Levy receipts were £45.1m higher than last year, when levy income was boosted by funds from the authorised betting partner policy.

The Levy Board had been workingon the assumption that annual income under the reformed levy would be around £90m, but chief executive Alan Delmonte, who thanked his staff for their efforts in implementing the new system, said it was too early to make any hard and fast assumptions about future income.

"It's about five per cent above estimate but, as we've said right from the start of this year, it's very difficult in year one because for a number of the bookmakers we don't have any track record of their horseracing business," said Delmonte.

"To come in at about £95m, against £90m, was welcome but not completely out of range. It's obviously good news that it's five per cent above rather than five per cent below."

The new legislation does not differentiate between retail and online income but Delmonte added: "Our estimate would be that it's close to, if not bigger now, for online."

Previous expenditure decisions meant the Levy Board has also been able to increase reserves to £46m from £25m, an amount expected to increase to £50m by the end of 2018.

Delmonte said the figure should give the racing industry "some comfort" that there is a cushion, especially given the possible consequences for betting shop numbers following thegovernment's decision to cut FOBT stakes to £2.

However, with the Levy Board set to be disbanded in April and its collection and expenditure roles taken over by the Gambling Commission and a new Racing Authority respectively, decisions on the level of future reserves will become the authority's responsibility.

Former sports minister Sir Hugh Robertson has been appointed as chairman of the Racing Authority and has been the focal point for discussions between the two organisations, Delmonte said.

In his statement Lee said Robertson was "outstanding", adding: "We are already enjoying an easy and cooperative relationship on matters relating to the Racing Authority.We'll do our utmost to ensure a smooth transition to the new arrangements in due course."

Delmonte said the detailed work on April's transition to the new arrangements would begin in the autumn.

"We're giving ourselves about six months to complete everything both on the collection and distribution side," he said.

The government is expected to introduce the legislation needed to complete the levy reforms which close the Levy Board no later than October, with the aim of passing it by the Christmas recess.

Delmonte added that when the legislation is introduced the staffing requirements for the Gambling Commission and Racing Authority will become clearer and more will be known about whether Levy Board staff will transfer to those bodies.

Levy Board 2017-18 annual report key figures

Total income up 45.5 per cent to £94.7m

Total expenditure up 1.65 per cent to £73.8m

Surplus of £20.9m compared to deficit of £7.5m in 2016-17

Prize-money allocation for 2018 up 19.25 per cent to £57.6m

Total reserves up 82.3 per cent to £46.3m

24 July 2018

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