Thursday, 20 March 2014

Betting on a Big Budget Benefit

It takes a special type of talent to tip as many losing horses as I do. And then to advise the purchase of bookmaker shares in a week in which the market value of Ladbrokes dropped 20%... well, what can I say: there is a reason why I have to work for a living. 

If you haven’t bought any bookmaker shares yet, I’d suggest that you do now. It may sound like the desperate voice of a gambler chasing his losses, but there are sound reasons for believing that the betting industry will prosper in the months to come. Firstly, it was a fantastic Cheltenham Festival for bookmakers – they won’t have finished counting their profits yet. 

Secondly, the catalyst for the precipitous fall was the Chancellor’s announcement that he’d be increasing tax on fixed-odds gambling machines in shops from 20% to 25%. However, the stock-market had already built in a healthy discount to allow for the Government placing additional constraints on these machines – either a reduction in their numbers or lower limits on the prizes offered. Now that the Government is increasing their tax-take, it is difficult to imagine them attempting to discourage their use any further.

The Chancellor also had some welcome news for the racing industry: announcing that he would “extend the Horserace Betting Levy to bookmakers who are based offshore”. It is estimated that the racing industry currently loses out on Levy receipts worth approximately £20 million through the use of off-shore betting services provided to UK based customers. That money will go a long way towards improving prize funds throughout the industry, which in turn filters through to racehorse trainers, breeders, stable staff and many small rural employers such as farriers, vets and feed merchants.

While some prominent betting companies already pay a voluntary contribution to the Levy, to compensate for the offshore shortage, the proposed levy reform will impact hardest on the remote betting operations of brands that don’t operate from the High Street and have never contributed to the prosperity of the horse racing industry. The budget announcement may have looked like a blood-bath for bookmakers, but don’t expect the major brands to lose out in the long-term – the long-overdue overhaul of the Levy will create an environment in which the racing and betting industries can work together with a common purpose. 

There wasn’t a lot of news in the budget with regard to the Married Couples Allowance, but the Chancellor has indicated previously that a scheme would be put in place before the next election. So if you want to get ahead of the game, now might be a good time to plan a wedding – and coincidentally, we shall be hosting a Wedding Fayre in the Grandstand on Sunday 30th March. If you’d like to come and look around our beautiful venue and meet some of the best local suppliers of food, flowers, photography and more – please come along between 1.00pm and 4.00pm. 

Finally, for those who haven’t completely lost faith, boost your budget with this week’s selection: Lie Forrit at Kelso on Saturday.

No comments:

Post a Comment