Announcement by the Government on the Racing Right – Huge Milestone for British Racing

By the time this blog is posted, I’ll be down at Cheltenham Racecourse with friends and owners cheering on the start of National Hunt’s Olympics. For the occasional visitor to Prestbury Park, everything looks rosy in the racing village – huge crowds, fabulous facilities, majestic horses, big prize-money and enormous betting turnover, with this festival alone generating over £350m. What could possibly be wrong in British racing?

Unfortunately over the last couple of years it has become increasingly apparent that the levy system set up in 1961 is no longer fit for purpose, particularly with the migration of betting operators offshore, and with the accelerating use of remote channels the levy has halved. Without legislative change, racing faced a funding crisis, which is why the “Authorised Betting Partner” arrangement was put forward to secure voluntary payments from bookmakers of 7-8% on their online profits, in exchange for access to racing sponsorship, shaping of the fixture list and preferential media rights for certain services.

In my last blog I mentioned that I had been to the BHA’s forum at Newbury on 1st March, and that I had intended to summarise that today. However only two days later, on 3rd March, the Culture Secretary John Whittingdale announced to Parliament that new funding arrangements would be created to stop this levy leakage and that all bets placed on British racing by any British-based customer, whether in a retail betting shop or remotely, would come into the scope of proposed legislative changes to be fast-tracked through the House of Commons so that hopefully a new system will be in place by April 2017. The full endorsement by the Government of the so-called Racing Right is probably the most important proposal for British racing in 50 years, and is a tremendous enabler of the BHA’s Strategy for Growth developed by Steve Harman, Chairman of the BHA and Nick Rust, the Chief Executive, together with the active support of all the major stakeholders in British racing.

Racing’s leaders are to be thoroughly commended for this development, and it is most encouraging that the relationship with government is so strong and that the tripartite structure of the BHA, the Racecourse Association and the Horsemen’s Group has provided real clarity and cohesion throughout a turbulent time with a number of the traditional bookmakers such as Betfred, Ladbrokes, Coral and William Hill. Indeed I think this is the first Cheltenham Festival since the early 1980s where the Gold Cup is not being sponsored by a bookmaker (on Friday it will be Timico), and Ladbrokes are no longer associated with the World Hurdle (which goes to Ryanair). Indeed it is pretty symptomatic of the behaviour of some of these “traditional” (I’m actually tempted to use a much more pejorative description) operators that their reaction remains negative. As an indicator of that, Ladbrokes have had a right old strop and are refusing to open their betting offices at Cheltenham.

I’ll do a more detailed summary of the Newbury forum in the next blog. You may remember from previous communications from me that the BHA’s strategy is all about creating the right conditions for growth for the industry and particularly: seeking £120m of extra income for the sport by 2020; 1,000 additional horses in training by 2020; betting participation up by 5% by 2018; and racecourse attendance up to 7m by 2020. Clearly there are many interdependent factors in play to achieve these goals, but without any doubt at all, replacing the levy with a new funding platform backed by legislation is probably the single most important lever for growth. Without that, there would be a foreboding sense of racing being well and truly in decline, purely as a result of woefully insufficient income to fund the growth of the whole sport. Putting that in context, and quoting from the Newbury presentation, we’re currently 38th in the global league table of owner prize-money, and if we are ever to escape that lamentable position it is absolutely vital that there is a much greater and sustainable revenue pipeline.

Since I started doing this blog four years ago, it is the first time that I have felt that racing has finally turned a corner and that the sport is genuinely beginning to arrest the decline that could easily have become terminal. Hats off to everyone involved in this extremely significant and encouraging step forward. Doubtless there will be lots of detail to sort out, but the government’s backing for the racing right is of huge importance.

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New Year’s Resolution for the Racing Industry: Bring in 1,000+ Horses and Retain More Owners

Hope everyone has enjoyed (?) the Christmas festivities and New Year’s Eve. One of our owners commented after our 2m novice chaser, Future Gilded, ran at Plumpton, “If only we could become racehorses” …. go for one 5-minute run and lose 16kg of weight, which is what Frankie did. May all your dietary resolutions be successful.

Anyway, just before Christmas I saw a number of comments that really had me thinking more seriously about resolutions. The first was in the Racing Post under the headline “Crisis mounts as flood of races hit by small fields”. David Williams of Ladbrokes painted a gloomy picture when he said, “The reasons for the small field sizes are complex, but the impact will be painfully straightforward: recreational punters will look elsewhere for their betting entertainment”, while Robin Mounsey of the BHA commented, “We’ve already stated this issue (field sizes) is our top priority. We have already announced a range of initiatives designed to address the situation, but that is not the end of it. We continue to focus on the issue and it will remain a priority for some time.” Completely agree with both of these comments – finding solutions to the problem has to be right at the heart of racing’s overall strategy and operational planning for the future.

But what to do about it? Personally I believe that there should be open acknowledgement of the problem, and then a clear decision taken by racing to resolve its central strategic dilemma. For a number of years, and particularly through the recession, there has been a steady decline in the numbers of both owners and horses in training. That has coincided with a significant increase in the number of races within the overall racing calendar, at a time when all-weather racing has grown considerably. Basically there are just not enough horses to go around and make races sufficiently competitive, with eight or more runners.

So strategically the industry either accepts a contraction so that there are fewer races (and therefore less revenue), or it pushes for an expansion in the horse population (with significant financial gains across all the stakeholders). I know what my preferred outcome would be – go for growth and expansion by making a number of fundamental changes across the whole racing spectrum. I would love to see racing’s new year resolutions aligned to that statement.

This is clearly a multi-layered and complex problem to solve, which is why another comment in December also caught my eye. It came on Twitter from John Basquill, of whom I have no knowledge. He said:

“Experience the joy of horse-ownership by paying a stranger two grand a month to phone sporadically and describe an array of equine ailments.”

Indeed, this stopped me in my tracks. If I were involved in the “training of trainers”, I’d run a workshop on all the implications of this comment, because in many ways it goes right to the heart of the problem. For too many owners, the level of engagement and return on investment just doesn’t add up. That shows in all the statistics on British racing to do with the horrible term, “owner churn rate”. Every year, hundreds if not thousands of owners leave the sport, never to return. Racing doesn’t really know why they leave, and this ought to be a prime target for research. If we want more horses we clearly need more owners but, just as importantly, to keep current owners in the sport. To do that they need genuinely to experience “the joy of horse ownership”.

And I think there is an enormous amount that can be done in racing to help them obtain that experience. I will revisit that again during the year, as the Owners for Owners new year resolution.

May you all be lucky and have a great 2015.

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.