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Bookies urged to volunteer millions for reinvestment via grassroots fund 24/11/2009
Owen Gibson

The government has proposed the creation of a fund that would lead to bookmakers handing over millions of pounds to Sport England for reinvestment in grassroots sport as part of a new voluntary code.

But the plan, the implementation of which the sports minister, Gerry Sutcliffe, has asked Sport England's chairman, Richard Lewis, to oversee, has already received short shrift from the betting industry.

In a letter to representatives of the bookmaking industry and the major sports governing bodies, a copy of which has been seen by the Guardian, Sutcliffe attempts to heal the long-standing divisions between the two sides by suggesting that the voluntary fund would offer "an opportunity for all parties to show goodwill".

He urges the bookmakers "to move relatively quickly to an agreement". Contributions from the bookmakers must be "serious and significant", said the letter. It is understood that figures of between £5m and £10m have been discussed.

Sutcliffe said in his letter that the grassroots sport fund should not be linked to "any of the ongoing and wider issues on which there is currently discussion", which include sporting integrity issues and offshore operators. Betfair last year led discussions about a possible voluntary fund, but talks broke down. The bookmakers have argued that unless the new fund is linked to an end for the campaign among sports bodies for a statutory right to a percentage of revenues, as is now the case in France where each licensed operator must pay 1.8%, there would be little point in entering a voluntary agreement.

It is believed that the Remote Gambling Association and the Association of British Bookmakers responded with letters querying the government's approach. Clive Hawkswood, chief executive of the RGA, said the plan was ill conceived and put Sport England in "an untenable position with no prospect of success" by asking for a solution by the end of December. "If any sort of voluntary scheme is to work fairly and effectively then it needs the support of the wider industry and neither the online or offline sectors have been consulted as a group," he said.

Sutcliffe is waiting for further responses before deciding on his next move, which could include bringing forward new legislation to force bookmakers to contribute. But any decision to legislate would face time pressures in view of next year's general election.

A series of key decisions will have to be taken on the gambling industry before the end of the year. A panel chaired by former Liverpool chief executive Rick Parry is looking into the issue of integrity in sport. The panel, which met yesterday, will deliver its conclusions before the end of the year. The subject has risen further up the agenda in the wake of last week's match fixing revelations from German police, which revealed around 200 games across Europe had been influenced by criminal gangs.