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There is a crisis in British horse racing which this week will be drawn to the attention of parliament.

It's an issue which may have escaped the notice of many punters, but talk to those within the industry and they'll tell you that the most pressing concern is the future of the racing levy.

Some will even go as far as saying that if the issue isn't resolved this year, many stables and betting shops in the region will go out of business.

The racing levy has been around for 50 years.

Bookmakers have to pay a proportion of their profits to the horse racing industry which in turn uses the money to develop the sport - providing prize money, veterinary services, things like that

But with many people placing bets with companies based overseas and not paying the levy, the amount the industry receives keeps falling.

The whole issue came to a head at the end of last year when the bookmakers offered £48m to the racing industry for this year and the industry rejected the offer saying it was expecting something in the region of £130-£150m. The matter has now gone to Sports and Culture Secretary Jeremy Hunt for adjudication.

It is now clear to both sides that the whole way that racing is funded needs reforming. So Newmarket's MP Matthew Hancock has secured a three-hour debate on the subject.

It will note that the horse racing industry supports employment of 100,000 people in Britain and contributes £3.5 billion to the UK economy each year and it will call on the government to bring forward proposals to improve the system of funding.

"I want a sustainable future for British racing which is some of the best in the world," says Mr Hancock.

"But the amount of funding that's been going into racing has been falling year on year as more betting goes offshore. That's why we need to reform the system.

"If we don't have that reform we will cease to attract some of the best horses and owners to Britain and the whole of the racing industry in this country will decline."

Among his four suggestions for reforming the system is to close the loophole that frees offshore betting companies from contributing to the levy.

"I think it's right that the government insists that those people who bet on racing make some contribution towards the way the race is run," he says.

But there are some who question how great a crisis this really is.

The Association of British Bookmakers points out that attendances are rising, as have corporate sales and sponsorship.

"British horse racing is in a pretty healthy state as far as we're concerned," says its Chief Executive Patrick Nixon. He says that once horse racing accounted for 40% of his members' profits. Now it's just 28%.

"The amount of profit we make on horse racing was down by 20% last year and therefore our capacity to pay the levy goes down with it."

And he points out that bookmakers are having to pay more every year for TV pictures of races - and the rights for those races are overseen by horse racing.

"Bookmakers are still paying more every year to racing. We're just doing it through a different channel."

He claims that every £10m rise in the levy will cost 1000 jobs in the betting industry.

Newmarket is the home of British horse racing. The Newmarket Trainers' Federation has warned that of the 85 trainers in Newmarket only 20 could survive unless this matter is sorted out soon.

That's why the town's MP regards sorting out this issue as one of his most important challenges this year.

After the debate in Parliament on the future of horseracing, Matthew Hancock said:

"The debate showed the strength of feeling in Parliament about the importance of racing, and demonstrated the will within Parliament to find a sustainable future for racing's finances. The case was clearly made from all sides of the House of the need for betting to support the racing industry on which it relies. There was very strong support for bringing offshore betting onshore, and many Members supported the call for a Racing Right.

"The motion called for the Government to put forward reforms to the funding of horseracing by the end of the year. I was delighted that the Government accepted the clear consensus of Parliament in support of this motion.

"We must urgently reform racing's funding so that betting pays a fair return. After today's debate I feel the momentum gathering."

Commenting on Matthew Hancock's parliamentary debate on the future of the Horseracing Levy, the Bookmakers' Committee have issued the following statement. The Bookmakers' Committee is the statutory body negotiating the Levy on behalf of the UK betting industry.

Will Roseff, Chairman of the Bookmakers' Committee, said:" The facts simply don't support claims that British horseracing is in crisis or that the funding from the bookmakers has fallen.

Attendances at meetings are up, not down. The extra money that bookmakers are paying to courses for live TV coverage of meetings more than compensates for any fall in revenue caused by a decline in betting on British horseracing.

Any rise in the levy is unnecessary, unreasonable and would put the future of 400 betting shops and 2,000 jobs across the country at risk.

Ultimately, we need to get rid of this 50-year-old subsidy and come to a modern commercial arrangement through which the betting industry can support British horseracing as it always has done."

*UpdateThe Government has agreed to increase the horse racing levy. Bookmakers will pay around eighty million pounds to the sport next year - much more than they had reportedly offered.

The Sport and Culture Secretary Jeremy Hunt announced that the headline rate of Levy will increase by 7.5% from 10% to 10.75% for Licensed Betting Offices and telephone and internet betting operators.

The West Suffolk MP Matthew Hancock said:" This settlement is a small first step in securing the future of the sport. More important is the clear indication that the Government has given that it will act to reform the levy and put racing's finances on a sustainable footing. Security for racing's future cannot come soon enough".

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