Levy Board secures extra £5 million in income after probe into cash-back offers

British racing's finances have received a boost after it was revealed the Levy Board has secured an extra £5 million it was owed by bookmakers for the 2018-19 levy year.

In May it emerged that income from the levy – the sport's central funding system – had fallen unexpectedly by £17m to £78m in the previous financial year.

Among the possible reasons suggested for the fall were some of the bookmaker offers made during the Cheltenham Festival in March, among them a cash-back offer made by Sky Bet that meant their customer numbers rose by more than a third during the meeting.

In August it emerged the Levy Board had contacted bookmakers over concessions, asking whether they had offered cash back as part of promotions and, if they had, how they had treated them in terms of levy payments.

The board said it had received legal advice that operators should not class cash refunds to punters as customer 'winnings', namely money that would reduce a bookmaker's gross profit on racing and therefore the amount of levy paid.

Following extra information provided by bookmakers and further legal advice, a number of operators submitted revised returns, resulting in the levy yield for the period being adjusted to £83m.

The board said it was "grateful to bookmakers for their constructive and cooperative approach and the timeliness of their responses to enquiries".

Chairman Paul Lee added: "The issues involved here are complex, turning as they do on the construction of legislation and its operation, specifically in relation to certain types of bets. All bookmakers have now paid levy on these bets in accordance with the legislation.

"To achieve agreement on this matter is important, not only in effecting a significant increase on the provisional £78m announced for 2018-19 but also for assessing levy liability in the current year and future years.

"This very satisfactory outcome would not have been achieved but for the hard work of the executive who have diligently pursued these matters while maintaining good relationships with the bookmakers. We are also grateful to our legal advisors, Herbert Smith Freehills, and to counsel."

It is understood lead counsel was Michael Fordham QC, who was appointed as a high court judge in December.