Representatives of horse racing and betting have suggested the two industries must make renewed efforts at working together, following the government’s decision about a levy replacement scheme, announced on Saturday. The sports minister, Tracey Crouch, ruled that betting operators should pay 10% of their gross racing profits to the sport, which will bring to an end the hotly debated Authorised Betting Partners initiative and leave the two sides with significantly less scope for dispute.
Racing officials expect the new regime will increase the sport’s income by as much as £30m per year on recent years, now that online betting with offshore firms is to be captured. But they hope the benefit may outstrip even such an impressive figure by restoring certainty of income, allowing for planned, long-term investment and instilling confidence in potential investors.
Will Lambe, director of corporate affairs at the British Horseracing Authority, committed racing’s ruling body to seeking a better relationship with betting, moving on from the bruising confrontation and hurtful rhetoric that has been so much in evidence.
“Upon achieving a level playing field for all bookmakers, our overriding priority in the new environment will be to develop a modern and constructive partnership with every element of the British betting sector,” Lambe said, “reflective of our industries’ mutual interest in horse racing as a thriving, popular and socially responsible betting product.”
That will take plenty of work, as a spokesman for William Hill indicated in yesterday’s Racing Post that the firm may be shy of returning to race sponsorship after the ABP row, which cost it its position as backer of the King George VI Chase. On the other hand, Hill’s have recently signed up to sponsor ITV’s racing coverage in a deal thought to be worth £10m.
A more conciliatory note has now been struck by David Williams, PR director at Ladbrokes, who said: “For the sake of all sides, it’s probably a good time to start looking to what the future could hold. The need to move on and address the real underlying issues is something we’ve expressed for some time now and both racing and betting are going to have to give some ground if we are to stand any chance of delivering a better, more attractive product for our customers.
“The significant escalation in costs which bookmakers pay to racing throughout the entire sport must finally be recognised and reflected in the product. That reality has been sidelined for too long but, if it can be addressed by the sport, it could represent a forward step.”
Lambe expressed the hope that the increased funding could improve racing from the ground up, producing a healthier sport that will be more attractive to participants, gamblers and casual spectators. “We firmly believe that the new legislation will have a transformative effect on the sport,” he said, “including its grassroots and crucial areas of equine and participant welfare along with many other initiatives requiring investment, that will also benefit bookmakers.”
Lambe appeared confident that the government’s plan would be passed by the European Commission as compliant with EU rules on state aid, pointing to the precedent of France, where the racing authorities were allowed a similar, enormously more lucrative scheme three years ago. But Ciaran O’Brien, communications director at Hill’s, says there is scope for the EC to insist on a cut to the rate at which the scheme is paid. A 1% drop would mean around £9m less per year for racing.
O’Brien noted the French scheme was cut from 8% of turnover to 5.6% after EC intervention and added: “Given the significant commercial sums paid to racing in Britain – nearly £200m in betting shop media rights alone – we will be interested to see what the EU decides in relation to the 10% and whether they rule it should be reduced on the grounds that the common interest costs are more than covered by the current commercial and levy flows from betting to racing.”
British racing has a counter-argument ready, if this subject should come up in discussion with the EC. The reduced rate in France, it will be said, was necessitated by the fact that online betting operators don’t have access to the full range of French races, an issue that does not apply in Britain. The BHA argues that the new regime will restore levy payments to their former level and should not therefore be seen as creating a new, additional burden on bookmakers.