£4.5m contribution from Bookmakers to be used to incentivise more competitive racing

26 Nov 2014 Financial/Political

• Overall £5m boost to prize money
• Majority of funds to be allocated to extending prize money to at least 8th place in most Class 2 races and 6th place in Class 3 – 6 races
• Sunday Bonus Race Series also to be introduced

The British Horseracing Authority (BHA), the four contributing bookmakers (William Hill, Ladbrokes, Coral and Betfred) and the Horserace Betting Levy Board (HBLB) have today announced how the Additional Voluntary Contribution (AVC) Fund will be used to help deliver its mutually agreed objective of staging a more competitive British racing product and growth in the Levy.

The AVC Fund, to which the four largest retail bookmakers undertook to make additional voluntary contributions of £4.5m in 2014/15, was introduced as part of the agreement of the 53rd Levy Scheme. This newly-created incentive fund was on top of their statutory Levy payments, which also offered guaranteed minimum Levy contributions.

The funds from the scheme will be utilised as of 1 December 2014 and will cover a 13-month period. In total £5m will be injected into prize money via the chosen mechanisms, with the extra £500,000 being provided by the HBLB.

The decision to utilise the AVC Fund in this manner was agreed upon between BHA and its stakeholders of Racecourses and Horsemen, the four bookmakers and the HBLB.

Paul Bittar, BHA Chief Executive, said:

“It is essential for the long-term prosperity of the sport that the racing product which we deliver is attractive to both domestic and international customers. It is for this reason that we recently announced a series of race-planning initiatives to tackle the issue of small-field races, and why it was agreed from the outset between Racing and Betting that this was the correct use for the AVC Fund. We are thankful to the four firms for their commitment in this regard.

“Racing and Betting are symbiotic industries, and at the heart of this agreement was the philosophy that we are better off aligning our efforts to make the racing product more compelling and competitive, year-round. We hope that this targeted investment ensures the contribution to this scheme by the four bookmakers generates returns to the Racing and Betting industry which outweigh the level of investment.”

In order to contribute to the overarching objective it has been agreed that the following mechanisms will be used for the distribution of the Fund.

  • Extended provision of prize money

Eligible Class 2 races in Britain will pay to 8th place and Class 3 to 6 races will pay to 6th place. This applies for both Jumps and Flat. This “Extra Place Prize Money Scheme” was developed in consultation with both Horsemen and Racecourses.

Horsemen representatives believe that the introduction of this enhanced prize money scheme – which, even for a horse finishing in 6th place, will assist with covering the cost of sending a runner to the racecourse – should have a positive impact on field sizes.

Based on figures from 2013, £4.2m will be allocated to this initiative in the 13-month period.

The extended prize money provisions will be in place as of 1 December 2014 and run until 31 December 2015. Further details of how the payments are operated are included in the Notes to Editors.

  • Sunday Bonus Scheme

For some time it has been an area of concern for the industry that Sunday racing is not performing as well as would be hoped in terms of both quality and quantity of runners. To this end initiatives have been introduced such as Sunday prize money thresholds (implemented by HBLB in 2014) and the Sunday Bonus Scheme (trialled by BHA in 2013).

The Sunday Bonus Scheme performed well in 2013 with runners up by an average of 30% against corresponding 2012 races. As such it was decided that the AVC Fund could be used to reintroduce and enhance this scheme, there having been no available pot of money in 2014 to extend the trial.

To this end a number of Sunday Bonus Races will be introduced, taking the form of a series of enhanced prize money Sunday races, culminating in a Final towards the end of both the Flat and Jumps seasons. The added benefit of this scheme is that Sundays will also have a feature race to act as a focal point for the day’s racing.

The details of the proposed Series are yet to be finalised but options may include a Veterans Chase Series or a Flat Sprint Series.

Once finalised, each Series will be designed to create interest in Sundays and where possible the Series will be aimed at generating additional runs per horse.

£300,000 of the Fund will be dedicated to enhancing Sunday Racing in this manner, with an additional £500,000 being provided by the HBLB’s Racing and Betting Incentive Fund.

The first Sunday Bonus Series will be introduced in early 2015.

Paul Bittar added:

“The process of developing and agreeing the mechanisms for the use of the Fund has been a lengthy and complex one, involving consultation across the Racing industry and extensive discussions with the bookmakers and the Levy Board. However the agreed solution has been achieved with support and buy-in from all parties as the best use for the AVC Fund.”

Richard Wayman, Chief Executive of the Racehorse Owners Association and representative of the Horsemen’s Group, said:

“Extending prize money down the field will provide a contribution towards the expenses of owners whose horses are currently earning nothing, which can only have a positive effect on field sizes. The extent of the impact remains to be seen but the growing costs of sending a horse to the racecourse is an issue increasingly raised by owners, particularly those with runners in lower grade races, and so these additional payments are a welcome initiative. Similarly, a race series leading to a valuable final will be attractive for those connected with horses who usually compete for more modest sums, and the chance to target some bigger prizes is sure to appeal to some.”

Alan Delmonte, HBLB Chief Executive, said:

“We are pleased that Racing and the four bookmakers have reached agreement, which was then endorsed by the HBLB Board. The aim of the AVC is to drive growth in levy. Racing’s consultation exercise has led it to the view that the best use of the fund is to extend prize money payments and, if this does prove to influence running plans significantly, the AVC fund will work effectively.”

A statement on behalf of the four contributing bookmakers said:

“The betting industry welcomes these new initiatives which are designed to improve the attractiveness of racing for the benefit of both parties. We look forward to measuring the success of these changes during the course of next year.”

The AVC Fund will be subject to a set of KPIs, both quantitative and qualitative, which will monitor performance of the initiatives throughout the year. There is scope to alter the manner in which the funds are used based on the performance of the initiatives.

 

Notes to editors:

1. The agreement of the 53rd Levy Scheme, and the Annual Voluntary Contribution Fund, was announced on 24 October 2013: http://www.hblb.org.uk/document.php?id=488&search 

2. BHA announced a series of race planning initiatives designed to tackle small-field races on 21 October 2014: http://www.britishhorseracing.com/press_releases/bha-reveals-initiatives-address-small-field-races/  

3. Payments under the extended provision of prize money scheme are at the below levels:

 

Class Payments Places
2 £400 8
3 £350 6
4 £300 6
5 £250 6
6 £200 6

 

These payments will not be paid on top of existing prize money where the place prize money is already equal to or above the payment level shown above, but will be used to ensure that these minimum levels are reached.

The consequence is that every horse finishing 8th in a Class 2 race will receive at least £400 prize money and every horse finishing 6th in a Class 6 race, for example, will receive at least £200.

A racecourse that does not provide a commitment to pay prize money down to a minimum of fourth place in all races of Class 3 to 6, and down to sixth for Class 2, will not be eligible to offer prize money from the Scheme.

Should a race not attract enough runners to fill all of the places covered by the extra prize money, the money for each place that has not been filled will be returned into the AVC Fund rather than being distributed amongst those horses who did take part.

Race types that will be excluded from the extended provision of prize money payments are:

  1. Class 1 Races;
  2. Class 7 Races;
  3. Flat Maiden Races;
  4. Novice and Maiden Hurdle Races;
  5. National Hunt Flat Races;
  6. Selling and Claiming Races; and
  7. Hunter Chases.

The primary reason for excluding these race types is that their inclusion would not meet the objectives of the Fund in that the payments are unlikely to influence behaviour and drive number of runners.

4. The Sunday Bonus Scheme was introduced on 27 January 2013: http://www.britishhorseracing.com/press_releases/sunday-racing-receives-boost-from-bha-development-fund/ 

5. Sunday prize money thresholds were introduced in 2014 and, in order to receive HBLB funding, a racecourse is required to offer at least £40,000 in prize money for a Jump fixture; or, for a Flat fixture, £45,000 in April to October inclusive and £40,000 in other months.