Two of Britain’s leading bookmakers, Ladbrokes and Gala Coral want the horse racing levy scrapped.  The levy is the mechanism whereby bookies have funded the horse racing business for the past 46 years, but last month there was a breakdown in talks over the 47th scheme and two of the biggest bookmakes support the abolition of the levy.

Chris Bell, Ladbrokes chief executive said about the levy, “Our view is that it is an outdated mechanism that has to go.  If racing wants a commercial world, let’s have one.”

Neil Goulden, chief executive of Gala Coral, agreed with Chris Bell by saying, “What’s happened over Turf TV proves the levy is an anachronism.  I think it needs to be phased out, because the bookmakers and racing need each other, but in today’s world it’s a nonsense.”

The levy cost bookmakers 10 percent of their gross profits last year, generating £85 million to the horse racing industry.  However, talks for the levy from 1st April next year broke down acrimoniously.

The row has been caused by Turf TV, which is the new television service which has the backing of 31 racecourses and technology company Alphameric.  The service would broadcast racing to betting shops in competition with the bookmaker-controlled Satellite Information Services.

However, the big four bookmakers – Ladbrokes, William Hill, Coral and Betfred – have all refused to sign up to Turf TV, as they claim the service would add £50 million a year to their costs.  The bookies want the cost of the new television service deducted from their levy payment, and have started High Court legal action.

It is now up to culture secretary James Purnell, to decide how much the bookies should pay.  Conservative MP Hugo Swire has won the right to an adjournment debate on the future of horse racing on Wednesday.

Chris Bell said, “We all need to get real and solve the issue.  Why should the government be involved?”

In reaction to Chris Bell’s remarks, David Thorpe, chairman of the Racecourse Association said, “We’ve been through a pretty thorough inquiry, supported by the Government and Lord Donoughue, to establish that the levy was the most appropriate form of funding.  I think many of us would like to see a commercial replacement but we haven’t found it yet.”

Mark Kershaw, managing director of Newbury Racecourse and an architect of Turf TV said, “We absolutely refute any connection between Turf TV and the levy.”

However, Gala Coral’s Neil Goulden believes that the introduction of Turf TV means that some kind of commercial solution can be found.