Levy Breaks, Finally: All UK Horserace Action Betting to be Taxed in 2017Published January 18, 2017 by Lee R
Offshore bases will no longer be tax shelters for UK facing horse-racing bookmakers.
Bookmakers taking British action on horse-racing will have to pay a new 10% levy on their profits, or Gross Gambling Yield GGR in 2017.
Everyone Ponies Up
The levy goes into effect as of April this year, with all betting operators required to pay the levy whether they are based in the UK or not.
The levy will apply to all forms of action on horserace betting in the UK, including on- and off-course bookmakers, pool betting, betting exchanges and spread betting companies.
The current system only requires UK companies to pay the 10% levy on gross profits above the first £500,000 (€565,600/$600,000).
Pending EU Approval
The regulation change still needs to pass European Union state aid rules, and may be subject to delays if reforms are not finalised by the April target date.
Sports Minister MP Tracey Crouch explained that the move is designed to bring stability and funding to the British racing regime, with the anticipated £90m per year from betting that the levy will bring over the next seven years expected to bring cessation to the yearly sabre-rattling with bookmakers over a “fair” return plaguing the outgoing Levy system since its 1961 introduction.
The New System
The Gambling Commission which regulates the UK gambling industry in Britain will be responsible for collecting payments from betting operators. The levy proceeds will pass to a new Racing Authority in charge of determining how the money will be reinvested.
UK sport administrators have been pursuing this reform for at least two decades, parallel to the rise of internet gaming. All the while online bookies have been veering towards offshore bases beyond the reach of the Levy system.
The increasingly low revenues culminating in levy proceeds of just £54.5m in 2015-16, for a drop-off of almost 50% from 2005-6 just under the century mark of pound take.
Instead of participating in rumoured legal opposition to the new system, operators would do well to just be thankful for the years of benefits gained from offshore operations and move on. Effective participation of all participating bookmakers can enhance the stability of the process of divvying up a growing online betting pie whose future promises more than enough for everyone receiving a slice.