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Sports set for gambling windfall 18/05/2007
Paul Kelso

Major governing bodies are looking forward to a multimillion-pound windfall from the gambling industry after the government agreed to support demands for bookmakers to contribute a share of their profits to sport.

Tessa Jowell and Richard Caborn agreed at a meeting on Wednesday night to back the case of the five major sports - football, tennis, both codes of rugby and cricket - and Caborn will now contact bookmakers to try to negotiate a settlement.

The ministers' support marks a major victory for sports that have been pushing for a contribution from the bookmaking industry for some time, arguing that the growth in gambling revenue from sports other than racing entitles them to a share of profits. They also believe the growing betting market threatens the integrity of their events and will cost more to police.

Richard Caborn
Richard Caborn
The government has been unwilling to extend the levy system that applies in racing, but now accepts that sport has a persuasive "moral case" for a cut of the estimated £500m annual turnover in sports betting. The exact financial formula that will be used is yet to be determined, but the governing bodies would settle for a voluntary payment of between £5m and £10m annually in the short term. A system similar to the levy, where a percentage of profits is passed to sport, may also be considered. The sports for their part have agreed to spend any money they receive, which will be divided between the five governing bodies, on policing their events or on funding grass-roots programmes.

The bookmakers are understood to consider a voluntary contribution to be the least damaging option given the alternatives, and Caborn's initial soundings in the industry have been encouraging. Bookmakers are keen to avoid the government pursuing any interest in adapting the model used in Australia, where bookies can legally run markets on events only if they have bought the rights to do so from the sports concerned. They will be mindful, however, that once the principle of contributing is established, other sports that attract significant gambling interest such as snooker and darts are likely to press for a contribution.

The decision to negotiate with sport has been influenced by the increasingly exacting regulatory environment in which the gambling industry now operates. The Gambling Commission will publish its findings on the issue of information-sharing between sports and bookmakers this month, with sports hopeful that bookies will eventually be compelled to pass on details of suspicious betting patterns.

Meanwhile the Gambling Act, which comes into force in September, will make cheating, including the misuse of inside information, an offence punishable by two years' imprisonment.