So, Betfair have signed a 5-year deal with the racing industry which locks in the terms of the current levy deal: they’ll pay 10.75% a year of profit on business from their UK customers.
Martin Cruddace, the company’s Legal Director and an old colleague and good friend of mine, has hailed the deal as “genuinely historic”. On behalf of Racing, CEO Paul Bittar says, “We are delighted that we have been able to reach an agreement with Betfair, one which represents a landmark for both the racing and betting industries. It brings many benefits, including substantial and increased guaranteed funding as well as importantly providing certainty for the sport in relation to Betfair’s contribution. We hope that similar arrangements with other betting operators will follow.”
I expected lots of different reactions to it: congratulations from some, irritation from others. For my part, without knowing the detail, my reaction was that it seemed to be something of a PR coup, and good news for the certainty of revenues and for the co-operative relationship that it suggested; but it didn’t seem to change any existing terms and therefore was probably more about style than substance. Probably, therefore, good news for both sides: Messrs. Cruddace and Bittar deserve a round of applause.
The one reaction I didn’t expect at all came from an MP who told me that Betfair had “signed it because they’re up against it”.
So surprised was I by that statement that I had to ask him what he meant. The answer was that they signed it “because they think that they will lose the fight about who should be paying levy.”
“Really?” I asked. ”Surely not? Surely this is a five-year deal, inked in. What did I miss?”
“Ah,” came the reply. ”It may be a 5-year deal with the racing industry; but it will not stop challenges from others.”
“Really?” I asked. ”Like who?”
‘The other bookmakers.”
“Really?” said I. “I can see how it will irritate them for its chutzpah, but I thought that William Hill and Betfair were in the High Court this week and that if a Judicial Review went in Betfair’s favour, that was really all over. I may be wrong, but assuming I am right, who will challenge it after that, if neither racing nor the bookies?”
“We will!” came the reply. “The MPs and the Legislators! The Treasury made the wrong decision in 2005, and we will correct it!”
We decided against arguing the ins and outs of why Treasury decided what they did; and why the argument has only ever gone one way. I wasn’t interested in having it, and when I said that honestly, I’d worked at Betfair for ten years and knew the reasons for the consistent response, I was told I was therefore biased.
I offered a £100 bet that the legislation would not change inside five years, but was told by my companion that he could never take that because it would mean that if he argued for the change, as he intended to do most vociferously, he would be politically compromised. I offered to change the bet to 50p, but that didn’t work either.
So there you have it. Betfair and Racing may make peace, and hoorah for that. Betfair and the Bookies may make peace, and hoorah for that even more. But there are others who still want to take up a fight which began in 2002 but which “the Treasury got wrong”, in the absolute and deeply-held belief that they will win it.
Please – please, no.