Detailed proposals for the ending of government involvement in British racing and the abolition of the levy were announced today.
Under the scheme the British Horseracing Board will take over responsibility for funding racing from the Horserace Betting Levy Board, which will be abolished.
That is set to happen in 2002, which would coincide with the end of the current agreement with Satellite Information Services for television pictures in betting shops, leaving a clean slate for negotiations with bookmakers.
A new regulator will be set up to monitor racecourse betting and, in a parallel move, the Tote will be sold to a racing industry trust.
The current system of funding racing through the levy will end, while reform of betting tax is still under consideration.
The new trust - expected to include the BHB, Racecourse Association, Racehorse Owners` Association, Jockey Club and the present Tote regime, as well as a punters` representative - will be given discretion onhow to raise cash to fund the sport.
Government sources today stressed that it would be up to the industry and bookmakers to come to a commercial agreement on a price for these packages.
No official price tag has been put on the Tote, which will be independently valued at the time of the sale, but there has been speculation that the industry may pay #50m, significantly less than the commercial value placed on it by some observers.
Under the new arrangements, the Tote, first established in 1961, will retain for up to 15 years its exclusive licence for pool betting on horse races.
The Tote sell-off was first announced by Home Secretary Jack Straw in March this year and the details were included in a consultation paper published by the Home Office today with a deadline for responses by February 28th, 2001.
The government was also confident that racing would be able to settle its internal wranglings over how the sport`s future income from extra income from pooled media rights would be shared out.
The BHB has proposed a 40/40/20 split between the Racecourse Association, prize money and itself respectively but the RCA wants a 50/40/10 split.
Launching the paper, Home Office Minister Mike O`Brien said: 'Racing is a mature industry which should run itself without undue interference from Whitehall. That is what I want to see happen.
'The BHB`s plan for the future funding of the sport shows that racing can operate without a statutory levy. The Government is very pleased to see the progress that has already been made by racing towards achieving a consensus on future funding arrangements - agreement on the detail is now clearly within their grasp.
'The government wishes to see both the racing and betting industries flourish, and we see the modernisation of the way in which they do business with one another as a further important step towards securing their long-term futures.
'Abolition of the Levy Board, together with the proposed sale ofthe Tote, also provide us with an opportunity to update and streamline the way in which racecourse betting is licensed and regulated.
'Our proposals are aimed at combating criminal infiltration into betting and racing, ensuring a fair deal for the punter and opening up new opportunities for all those involved in the on-course betting market.'
Under the new scheme, the BHB will take over the Levy Board`s responsibility for veterinary research and education through the Horseracing Forensic Laboratory.
The future of the National Stud is still under consideration, but the Home Office proposed that it could extend its activities from breeding thoroughbreds to the preservation of rare native breeds and the support of veterinary research.
The BHB gave its full backing to the Home Office paper.
BHB secretary-general Tristram Ricketts said: 'We warmly welcome this important step towards the abolition of the levy.
'We are particularly pleased that the government is satisfied that the BHB`s Future Funding Plan will provide a solid basis for the financing of the racing industry post-levy.'
Ricketts also argued that the government`s decision further strengthened the BHB`s request, under the Plan, to receive 20% of the extra income generated through the sale of media rights, rather than the 10% the RCA want.
Ricketts said: 'The government`s confirmation of the BHB as the successor central funding body to the Levy Board further reinforces the need, identified in the Funding Plan, for the BHB itself to have adequate resources to fulfil effectively those funding responsibilities which the BHB will be taking over from the Levy Board.
'The government makes very clear the importance which it attaches to key expenditure heads such as integrity, veterinary research, training and education and support for breeds of horses.
'These and other heads will continue to require significant investment.'
Ricketts added: 'The BHB will look carefully, withthe RCA and other interested parties, at the proposals for the regulation of on-course betting.
'It will also review, in detail, the plans for the licensing of pool betting following the sale of the Tote to a racing trust.'
