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Sports minister says offshore bookies must pay racing Levy 8/01/2010
Owen Gibson
Income has dropped 20% since Ladbrokes went abroad
Racing received a significant boost today to its campaign to force bookmakers based overseas to pay the HorseraceBetting Levy following a government promise to "ensure operators taking bets on British races should pay their fair share".

Unveiling proposals that would require all overseas bookmakers to be licensed by the Gambling Commission if they want to operate in the UK, as revealed by the Guardian last month, the sports minister, Gerry Sutcliffe, promised to ensure that the requirement to pay the Levy applied to them.

"In terms of the Horserace Betting Levy, I remain firmly of the view that all operators taking bets on British races should pay their fair share. There is more to do but I am committed to making sure this happens," he said.

For more than a decade the horse racing industry has warned that a mass defection offshore by bookmakers, thereby avoiding the levy on bets in Britain which goes straight to the sport, could cripple racing's income and it claims it is now coming to pass.

The decision last year by both William Hill and Ladbrokes to move their online arms offshore has cost racing an estimated £4.2m, and the overall take from the levy on bookmakers' gross profits was £93m in 2008-09, down 20% on the previous year.

The BHA chief executive, Nic Coward, welcomed the move as a positive start to the new year for racing.

"Together we must ensure that the way in which the sport in this country is funded is right for the modern age. Of course it's right that all operators pay, wherever they are," he said.

"Offshore operators have been getting away with it for too long and racing has taken a considerable hit to its Levy income. It has also had the ever present threat of more moves offshore with potentially severe consequences. Government clearly did not intend this to happen and are now addressing it."

Under the immediate licensing proposals, which are being consulted on, all operators active in the British market would have to comply with the Gambling Act and be required to report suspicious betting activity to the commission and sport governing bodies.

They will also have to comply with British licence requirements, including the protection of children, and demonstrate how they will contribute to the research, education and treatment of problem gambling in Britain.

"The new system outlined today will also ensure that all businesses offering online gambling to our consumers adhere to our rules – not someone else's," added Sutcliffe.

While the Remote Gambling Association has said it is amenable to discussions about bringing its members under the aegis of the Gambling Commmission, it is likely it will bitterly resist any move to apply the Levy.

A spokesman for Victor Chandler, one of the first bookmakers to operate offshore, said it already contributed to horse racing in the form of marketing and sponsorship.

"Because of our contributions to Racing UK and At The Races, and our commitment to the Horse Welfare Trust, we already feel we put an appropriate amount of money into racing."

Sports governing bodies, which have been lobbying for a new licensing system to combat the threat of match fixing and as a first step towards arguing for a levy on all sports bets as in France, also welcomed yesterday's Commons statement.

The 12-week consultation period, unlikely to be launched for three to four weeks, and the need for new legislation, are likely to push the issue beyond the coming general election. But racing insiders are confident that the changes have cross-party support and will be picked up by whichever party wins.