Horse Racing (Funding)

Andrew Griffiths Excerpts

Tuesday 22nd November 2011 Westminster Hall

[Matthew Hancock]

I am not surprised that the amount being paid by bookies for picture rights is going up, not least because of the attractiveness of the sport and the amount of interest in racing. Of course the rise is good news but picture rights are only part of the story, because when a punter bets on a race the bet is based on the racing product that underpins it, so picture rights alone cannot be the answer to the question of how to fund horse racing.

I come now to what will be the core of my argument today and the core of the question that I will put to the Minister. During the last decade or so, what has been central to the fall in the value of the levy is the removal from British shores of almost all the big bookmakers. Of the 20 biggest bookies, only two are now domiciled in the UK. As I said earlier, that change reflects changes in technology that mean we can bet more online and over the phone. However, we must recognise the change and deal with it, if we are to put matters right.

The fact that bet365 and Coral are still onshore is great news, but we should not be in a position where we have to be grateful to bookies for staying onshore. The idea that we should thank people for paying the tax that they are due to pay is not one that we apply anywhere else in the tax system. In fact, everywhere else in the tax system we are pretty firm if people do not pay their tax. Although I am grateful that those two bookmakers—bet365 and Coral—have stayed onshore, many independent bookmakers cannot move offshore; they do not have the capacity to do so, as they are too small. Consequently there is not a level playing field even within the gambling industry to ensure that there can be fair competition in gambling.

The impact of that offshoring is felt across the board. There is a loss of millions in levy contributions and a loss to the taxpayer, estimated at £62 million a year, in lost betting duty. I would be very interested to find out whether the Minister has an updated estimate of the amount of tax that is lost in betting duty because of the number of offshore bookmakers.

[Andrew Griffiths (Burton) (Con)]

I have been told to thank my hon. Friend on behalf of Uttoxeter race course, which is in my constituency, where his work on behalf of the racing industry has become legendary. People at Uttoxeter have asked me to pass on their personal thanks.

My hon. Friend raises the very important issue of betting going offshore. Obviously we live in a global world and the internet makes it incredibly difficult for us to regulate betting offshore. However, many offshore bookmakers still advertise in the UK; in magazines, on billboards and on the side of bus stops. Does he agree that one of the ways we could get them to understand the consequences of not being based in the UK is to regulate their advertising in those kinds of media?

--- Later in debate ---

[Andrew Griffiths]

Does the hon. Lady share my concern and that of my hon. Friend the Member for West Suffolk (Matthew Hancock) about the fact that the UK has now dropped to 38th in the world rankings for prize money, and that prize money has halved in two years? That is of major concern to the industry and it calls for urgent action.

[Sandra Osborne]

I could not agree more; that is a major issue. Despite the wish to maintain a competitive prize regime for Scottish fixtures, to say nothing of our excellent facilities, the industry in Scotland cannot be sustained indefinitely in the face of massive cuts in income from the levy. The annual payment from betting to racing has fallen from an average of £106 million to £59 million in three years—a drop of almost 50%. One of the most important reasons for the fall in racing’s funding position, as Members have said, is the move offshore by bookmakers and betting exchanges. How can it be right for bookmakers to advertise and transact in the UK but not contribute to the levy or pay taxes? Of 19 listed bookmakers, only two are now onshore, as the hon. Member for West Suffolk said.

I am aware of the Minister’s July announcement in which he proposed to regulate remote gambling on a point-of-consumption basis. That would create a level playing field and it is long overdue. All operators based here or abroad would have to hold a Gambling Commission licence to transact with UK customers. I welcome that and any other idea that would deal with this urgent situation as the hon. Member for West Suffolk implored—as soon as possible.