The wagering firm Betfair and British Racing, comprised of the British Horseracing Authority, the Racecourse Association, and the Horsemen’s Group, have signed a landmark five-year commercial agreement worth at least £40 million to the sport.
Over the period, Betfair has agreed to pay British Racing 10.75% of all revenues on the sport from its UK customers. The agreement also contains substantial guaranteed minimum payments reflecting both parties’ confidence in the strength and growth potential of British Racing.
Officials said they hope the agreement provides a template to help secure the long term funding of British Racing.
British Racing has made commitments linked with these minimum payments that ensure a minimum number of fixtures per year. Betfair’s betting data will be used to help construct a fixture list that will optimize British Racing’s attractiveness as a betting product for punters, the racing industry, and betting operators. The agreement therefore aligns Betfair’s interests with those of British Racing in seeking to increase revenues derived from a thriving racing industry.
The five-year agreement will replace Betfair’s current annual voluntary Horserace Betting Levy payments. Betfair has already made upfront Levy payments of £6.5 million for 2012-13 which will be offset against payments due under the new commercial agreement.
The agreement is said to be the first of what could become standard practice for both industries. The Department for Culture, Media, and Sport has indicated that it intends to consult in 2012 on proposals to reform or replace the Levy. It could include options to require all betting operators licensed in Great Britain that take bets from British customers to enter into their own commercial deals with British Racing.
