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Wednesday, 19 December, 2018

Mystery over £1.3m refund heading way of Authorised Betting Partners

Levy Board chief executive Alan Delmonte revealed some detail in annual report
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Mystery surrounds a potential seven-figure refund that may be heading to some of the bookmakers who signed up to the controversial Authorised Betting Partner (ABP) scheme following a development that has prompted the Levy Board to seek legal advice.

While the reasons are unclear, some details emerged in the Levy Board's annual report and accounts for 2017-18 published this week which said a provision of around £1.3 million had been included "reflecting potential amounts due to bookmakers".

Requests for clarification regarding the provision were directed to the BHA but the governing body said it was not able to answer questions on the subject or make a statement due to commercial confidentiality.

It is understood the provision relates to the ABP scheme introduced by British racing in 2016 which attempted to capture income from remote betting operators who at that point were not liable to paying the levy.

In the governance statement contained within the annual report, Levy Board chief executive Alan Delmonte said that in 2016 "organisations representing British racing entered into arrangements with certain bookmakers for the substantial net benefit of levy income".

The ABP strategy was launched by the BHA, Racecourse Association and Horsemen's Group who are represented on the Levy Board by Nick Rust, Maggie Carver and Philip Freedman respectively.

Delmonte's governance statement added: "British racing’s signatories included some members of the board, who have confirmed to me they were acting in their capacity as directors of those individual organisations and not in their capacity as HBLB [Horserace Betting Levy Board] members.

Levy reforms boost income to ten-year high of £94.7 million

"The board has sought legal advice on whether, notwithstanding that HBLB was not a party to these agreements, a small number of these agreements may have created potential future liabilities for HBLB.

"At the time, information relating to these potential future liabilities was not shared with the full board, or with me as the accounting officer, as the contracts contained provisions referring to the highly commercially confidential nature of the arrangements and the organisations did not consider that the agreements created a potential liability for HBLB.

"The indicative legal advice is that no contractual liability has been created. Nevertheless, under accounting standards a constructive obligation could be deemed to have been created and therefore a provision should be and has been included in the accounts."

If the Levy Board is not liable it is not clear whether it is the racing signatories to the ABP deals who are potentially liable or whether the liability falls on the Racing Authority, which is set to take over the Levy Board's expenditure role in April.

It is also not not known which firms would be the recipients of any money, nor whether there will be similar provisions in future years.

The ABP scheme ended in April last year when the government reformed the levy to extend it to remote operators based overseas.

The scheme brought in more than £14m in income for racing, preventing deep cuts in spending on areas like prize-money as statutory levy income fell.

Racing also credits the scheme with helping persuade the government that levy reform was necessary.

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At the time, information relating to these potential future liabilities was not shared with the full board
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