Second stage of levy reforms may face opposition in parliament

A consultation on the government's reforms of the levy, which would give British racing greater control over how the money raised is spent, was launched on Thursday, but the measures may face political opposition.

In April, the first stage of the government's levy reforms came into force, extending the funding mechanism to operators based offshore for the first time.

However, this year's snap election had thus far delayed the second stage, which is set to result in the removal of the government from the process and the abolition of the Levy Board, with the Gambling Commission taking over collection of the levy and a new Racing Authority, representing the sport's main constituents, in charge of distribution. Both would be funded from the levy income.

The measures, which were welcomed by the BHA, must undergo scrutiny in both houses of parliament and may not pass through the Lords unchallenged.

Labour peer Lord Lipsey, who has been a critic of the reforms, said: "The government proposes to transfer responsibility for the state-mandated bookmaker subsidy to racing from the Levy Board to the Gambling Commission.

"This is certainly not necessary – the Levy Board is doing a difficult job perfectly well – and it may be illegal as it involves the Gambling Commission taking on responsibilities which are arguably beyond its statutory responsibilities.

"The Gambling Commission doesn’t want it, the Levy Board doesn’t want it, I doubt if racing wants it – this is a solution without a problem. With Brexit on its plate, does the government really fancy seeking to force this dubious measure through parliament?"

In the consultation document, "on the use of a Legislative Reform Order to reform the administration of the Horserace Betting Levy", the government said its policy aim was to "reduce financial and administrative burdens on the betting and horseracing industries".

Those savings will "provide a direct benefit to businesses in the racing industry as more levy funds will be available for distribution".

The government estimated there would be £570,000 in annual savings due to the reforms, although there would be total transition costs of £1.52 million.

The Racing Authority is set to include representatives of the BHA, Racecourse Association and Horsemen's Group.

The government said it wanted to be satisfied the body "is representative of the horseracing sector and has the support of the beneficiaries of the levy whose interest it will serve".

It added it expected racing to "work constructively" with the betting industry and would require the Racing Authority to consult betting operators and "other relevant stakeholders" on its strategy for spending levy funds.

The Racing Authority would also be required to publish an annual report setting out its use of those funds.

The consultation is due to run until February 16.

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