Suffolk MP prompts crackdown on offshore betting on horse racing

Deborah McGurran
Political editor, East of England

image copyrightPA
image captionThe government has promised to change the way the racing industry is funded

One of our Suffolk MPs has pulled off a little coup.

The racing industry can now look forward to reform by the end of the year, thanks, in no small measure, to the efforts of Matthew Hancock.

He represents the home of horse racing - Newmarket.

The government has now promised to change the way the racing industry is funded, by the end of the year.

Countrywide issues

Leading a debate in parliament, Matthew Hancock, the Conservative MP for West Suffolk, argued that the levy system that helps fund it is 'broken' and, because of that, the industry faces 'an uncertain future' and 'immediate and urgent woes'.

"Newmarket is the global centre and headquarters of horse racing," he told a rather empty chamber, which had cleared after the vigorous phone hacking debate that had preceded it.

"Five thousand people employed in the town get their jobs and livelihoods directly or indirectly from the sport. That means that one third of employment is linked to the sport.

"This is not just an issue for Newmarket, however; it is an issue for our whole country.

"I want to set out the argument that over the past few years, funding for horse racing has been in crisis and that the problem has in part been that those who make a profit from the sport through gambling have gone offshore to escape contributing to the sport on which they rely."

Levy reduced

In a nutshell: book-keepers pay a levy on their profits, which the industry uses to develop the sport, including funding prize money.

The levy, has, however, dropped from over £100m to £65m in recent years and its contribution to prize money had almost halved.

image copyrightbbc
image captionMatthew Hancock, the Conservative MP for West Suffolk, says the current levy system does not work

Why? Mr Hancock informed the House that there were a number of reasons for the reduction in the levy, including the growth in online betting through offshore companies.

They are exempt from the levy.

He called on the government to close this loophole along with several other exemptions.

The government, in the form of John Penrose, Minister for Tourism and Heritage, concurred and promptly announced measures to fix the problem of offshore betting.

"I agree with everyone who has either spoken or intervened in the debate," he said.

"It is common currency and commonly agreed that the levy as it currently stands is broken. It does not work. People on all sides - whether they are involved in the gambling industry or in racing - are pretty united in their criticism of the levy."

Further proposals

The move will mean bookmakers operating in Britain, including those based abroad, will have to be licensed by industry regulator the Gambling Commission.

Mr Penrose also pledged the government would bring forward further proposals by the end of the year as part of a more broadly based official consultation on the levy.

Any solution, he warned, would have to produce a level playing field between people betting through domestic book-keepers and those located offshore.