The merger of two major UK bookmakers into Ladbrokes-Coral will hurt competition and the new company should pay a special levy on horseracing revenue, according to the British Horseracing Authority.
The authority is lobbying the UK Competition and Markets Authority for the levy as a condition for allowing the merger to move forward.
The authority’s Chief Executive Nick Rust sent a letter to the CMA arguing that horseracing in the UK will be negatively affected by the lack of competition, both for media rights and the horseracing odds offered to gamblers. The authority wants the bookmakers to pay the Horseracing Betting Levy on its online business under the merged entity. The companies already pay such a levy on their retail properties.
“In our submission of 1 February, we outlined that a potential remedy could be a requirement that the Merged Entity contributed to the funding of British Racing across all of its distribution platforms (retail and remote) – as at present both Parties do not contribute to the Horserace Betting Levy from profits on their remote businesses,” the letter read. “While Government has outlined its intention to reform the funding of British Racing on a statutory basis by April 2017, the Inquiry Group could require as a remedy that the Merged Entity contributes to the Levy through its online business in advance of the statutory introduction of the replacement system.
“We believe that this would be justified as it would ensure, through a more sustainably funded British Racing industry, a ‘higher quality’ product for UK betting customers to bet on,” the letter said.
The UK introduced an Authorized Betting Partner classification this year, where only bookmakers who the association feels provided appropriate funding to the sport are allowed to sponsor or advertise around horseracing. But retail bookmakers argue that the authority favors online-only and have resisted the classification program.
In a related matter, the UK’s Sunday Times reports that Betfred is nearing a deal to buy hundreds of betting shops, as the Ladbrokes-Coral merger enters the final stages of its UK Competition and Markets Authority review.
As part of the merger, Ladbrokes-Coral has to sell a significant number of betting shops in order to secure UK competition approval.
Manchester-based Betfred, Britain’s fourth largest bookmaker is reported to be willing to buy 300 to 400 of Ladbrokes-Coral’s retail outlets, the Times reported. The paper said Betfred has edged out BoyleSports for the sales.
Boylesports, however, did announce it has purchased four betting outlets from Hackett’s Bookmakers, which is liquidating its holdings.
