British Horseracing Conference
25th February 2008
Gerry Sutcliffe MP, Minister for Sport
Thank you Paul for your introduction and for inviting me to address you all today. The range of people represented here reflects the importance of British racing for so many of us. I hope this conference is a success and I am sure it will be the first of many.
Role of BHA
Since the BHA took over responsibility for regulating and administering horseracing last summer there has been a number of significant challenges and I pay tribute to the considerable expertise and professionalism shown by the BHA in approaching these.
I am particularly grateful to the BHA for the professional way it assisted the Government in dealing with the outbreak of Foot and Mouth, and in sharing its expertise with other sports in promoting integrity in sports betting.
As you know, the new gambling regime that has been in place since 1st September last year has three licensing objectives:
o Keeping gambling crime free
o Making sure that gambling is fair and open
o Protecting children and vulnerable adults
Racing can clearly make a significant contribution to promoting these objectives by helping ensure openness and fairness in betting on horse races. I am sure that Brian Pomeroy of the Gambling Commission, who is addressing you later this morning, would agree. Although the BHA is a new body, I am confident that the regulation and administration of racing is in safe hands.
Racing’s importance to sport, culture, and local economies
Since I became Sports Minister last June it has become ever clearer to me that racing is at the heart of the sporting, cultural and economic life of this country. I have received dozens of letters from Parliamentary colleagues on horseracing issues, and I have been involved in a Select Committee inquiry as well as a number of debates, not to mention of course in determining the 2008/2009 Levy scheme.
This sustained interest in Parliament, and in the press, is evidence of the passion that racing inspires right across the country. The passion of racegoers makes horseracing second only to football in British sport in terms of attendance.
I was fortunate to be able to experience it firsthand at the St Leger at Doncaster last year and I am hoping to be able to join many of you at this year’s Cheltenham Festival.
I am sure I don’t need to tell you that it also makes a strong and growing contribution to the economy of the country, including in many deprived areas where it can provide a range of career opportunities to young people. Britain’s 59 racecourses generate around £300 million in tax revenues each year, and have an overall economic impact of £2.86 billion.
The racing and racehorse breeding industries are directly responsible for 18,800 full time equivalent jobs. Taking into account secondary employment, including the betting industry, this rises to 88,000 putting it amongst the top ranks of sporting employers in Britain.
The fact that a 60th racecourse is due to open at Great Leighs in Essex shortly shows that there is still room for growth in the industry.
Reducing involvement in racing
You have asked me to say how I view the future of Government’s relationship with racing. I have made it clear our belief that mature, modern industries should be given the freedom to look after their own affairs.
Our view is that horseracing should become wholly free of Government intervention now that a robust licensing framework, overseen by the Gambling Commission, and a competent regulatory authority, the BHA, are in place. We have signalled this by advancing the sale of the Tote and the transfer of the National Stud.
In view of the difficulties we have faced with the next Levy, I am clear that we also need to look again at the funding mechanism for racing. I am committed to helping the BHA, other racing bodies and the bookmakers to work together to ensure that racing is appropriately funded.
However, bookmakers no longer rely solely on horseracing as an attraction for customers, so it is increasingly necessary for racing to similarly adapt and develop as a sport that does not need gambling to engage the racegoing public.
My Ministerial statement last Wednesday set out our determination of the 47th Horserace betting Levy so I will not repeat it in detail here. I very much regret that we have again been required to make this determination.
It would obviously have been better for the racing and betting industries to come to an agreement rather than relying on Government to adjudicate.
I understand that some of you are disappointed by the decision to roll-over the 46th determination to the coming year. However, following careful consideration of submissions from the independent members of the Levy Board, the BHA and the Bookmakers’ Committee, as well as independent advice on these submissions provided by Organisation Consulting Partnership, I strongly believe that this was the most appropriate course of action.
The positions taken by racing and the bookmakers were so far apart as to be irreconcilable. Rolling the previous Levy over, as recommended by the independent members of the Levy Board as my departments non departmental public body, seemed to me the fairest and most practical solution. It gives time for both sides to come together and negotiate a mutually satisfactory way through the new circumstances in which both industries find themselves.
As David Ashforth wrote in the Racing Post last Thursday:
“…it is impossible for either party to win a clear victory in an argument conducted within the unsatisfactory forum of the levy system…the levy system cannot and will not continue in its present form.”
It is clear to me and to many that the days of the Levy are numbered when modern technology allows money to flow between bookmakers and racing in so many new ways.
I now appeal once again to both sides to put aside their disagreements and work together to find an alternative to the Levy that suits both parties. That is why I am arranging the first of a succession of meetings through the All-Party Racing and Bloodstock Industries Group to immediately begin the necessary discussions.
I will host the first meeting and although the Terms of Reference are not yet agreed I envisage that it will bring together all interested parties for an honest, wide-ranging discussion about all the issues the racing and bookmaking industries are grappling with, from Turf TV to betting exchanges, the growth in popularity of Fixed Odds Betting Terminals to the growing fixture list. I am delighted that the BHA has agreed to take part in these important talks.
May I emphasise that the Levy will continue until we are clear that an alternative is in place which is acceptable to both sides. However, in the mean time we will ensure that the Levy is fit for purpose.
Both industries have a shared responsibility and incentive to ensure that horseracing flourishes in this country and I am hopeful that the discussions will be approached with a spirit of partnership.
The Financial Times leader of 17 January put it very well when it said:
“Common sense suggests that both should be backing the same horse: a flourishing racing industry with enough money to invest in improving facilities and building on record attendances.”
National Stud, Tote and on-course bookmaking
There are other areas where we are rightly handing over responsibility for racing matters to those bodies that are better placed than Government to deal with them. For instance, last week I announced the transfer of the assets and ownership of the National Stud from the Crown to the Jockey Club, pending Parliamentary approval. I am pleased that the Jockey Club will continue the Stud’s excellent tradition of training young people in horse breeding for an agreed minimum period.
The Government is still actively considering the offer made to buy the Tote by a consortium of racing interests, and the staff and management of the Tote itself. You will understand, therefore, that I cannot say much more at this time, but we hope to announce how we intend to proceed shortly.
Finally, you will be aware that my Department is acting as an intermediary in another dispute, namely the system for allocating pitches for on-course bookmakers after the Five Time Rule expires in 2012. It is not for Government to propose solutions. Racecourses and on-course bookmakers need to agree a way forward between themselves. However, I have brought together a Working Party of racecourse and on-course bookmaker representatives, under an independent Chairman, to help them agree a new commercial arrangement.
I am pleased to say that they appear to be making good progress so far and I look forward to their conclusions. This is another example of where the racing and betting industries have a clear incentive to work together for mutual benefit. I hope they will increasingly be able to do so without Government mediation.
I know that strong leadership from the BHA is vital to the future prospects of racing. We have every confidence that the BHA will exercise its vital regulatory and administrative responsibilities effectively and I look forward to working with you over the coming years.