13 Jun 2002 Pre-2014 Releases

I reminisce to this very week 12 months ago. There I stood before a packed house, commending Victorian Racing as the benchmark of international racing to which all should aspire. I had them captivated, they were stunned into silence, then spontaneously broke into rapturous applause as the translator conveyed my impassioned speech to the members of the Japanese Racehorse Owners Association.

I mention this not to embellish the brilliance of my oratory skills but to emphasise that we in the British Horseracing industry compete in a dynamic, competitive and commercial environment that embraces all racing nations of the world and is not confined to the geographic boundary of Europe.

The emergence of Hong Kong, Singapore, Dubai et al, particularly so during the past decade illustrates this point. The challenges they pose are as obvious – the internationalisation of their racing presents a potent threat to the European Pattern and the continued annual migration of a sizeable contingent of horses that results in the depletion of the ranks of our better class events.

British Racing is renowned for its diverse array of racecourses, from Ascot to Ayr, Cheltenham to Perth, we are blessed with arguably the most beautiful racecourses in the world of racing. The innumerable Champions of the Turf that have graced these fabulous racecourses during the past 250 years: the famous jockeys and legendary trainers who made their mark in history.

I say this to reinforce in everyone’s mind that whilst British Racing is admired the world over for the prestige of its racing, our prizemoney levels were, until the recent agreements generally regarded with ridicule.

The culmination of negotiations of data and picture rights has resulted in an unprecedented opportunity for British Racing to redress this perception and provide a significant incentive for investment, from owners to breeders, from racecourses to trainers – British Racing will become synonymous with Prosperity.

The magnitude of the Industry’s successful negotiations is rightly regarded as a triumph, £170 million per annum in 2003 exceeds our original expectation, particularly when compared with revenues in 2000 of around £85 million. All this in an unfavourable financial environmentt.
British Racing is now well positioned to claim its rightful position as the pre-eminent racing nation , in terms of the complete package – prestige and financial prosperity.

I therefore consider myself privileged to stand here today and represent the British Horseracing Board during a time that will be recalled as a watershed in racing history. The catalyst for this watershed moment was the desire for racing to control its own destiny, and to establish data rights as a valuable and marketable commodity.

The driving force behind this strategy has been undoubtedly Peter Savill and the BHB Board. They challenged the paradigm that picture rights were the dominant commodity, valued infinitely greater than data rights.

No other country has been as audacious nor singularly focused and the rewards will be evident in the years to come. We estimate data rights will stimulate the Industry to the extent of £600 million for the life of the contract. As importantly, recognition of data as a high value commodity sets a solid basis for the future.

To substantiate this point, Australia is commonly held up as a role model. However, the principal marketable commodity in that country is racing product (in other words fixtures). The momentum in Australia is now focusing on capitalising on the commercial opportunities provided by data. This is the trend in the international racing market.

British Racing is now at the forefront in maximising revenue from intellectual property rights. We now provide the benchmark for other racing jurisdictions to emulate and in turn generate true value.
British Racing formerly reliant upon prestige as its marketing and promotional instrument is now acknowledged as a complete package.
The conclusion of the negotiation phase has introduced a collaborative partnership between racing and bookmakers and it is this partnership that is integral to the financial well being of British horseracing. Of that there is no dispute. But my experience of the Australian market suggests that racing must also generate interest in pari-mutuel wagering, particularly, exotic bet types such as Triple Trio and Trifecta, etc., to maximise interest in betting and thereby its revenue streams.

An immediate expansion of betting product is essential; Attheraces recognise the necessity for innovation and the industry must support any initiative that broadens the appeal of betting of British horseracing and which illustrates the poverty of the inanimate alternatives, such as slot machines, that have proliferated in recent years

The dynamics of racing can only be enhanced by competition between bookmakers and the pari-mutuel. We are fortuitously placed amongst the foremost racing nations to take advantage of this more competetive environment. Constructing a more robust betting market is not undermining the commercial relationship between bookmakers and racing. To the contrary, it provides a multiplicity of benefits with the most prominent being an energised betting market that stimulates the bookmaking and racing industries, whilst fully responsive to the demands of our customer.

It also serves as a vigorous rebuttal to the various gambling options such as the Camelot Lotto and the recent virtual racing addition to the LBO ranks, “Portman Park”. Alternatives, devoid of skill and utterly speculative to something as gracious as pitting one person’s opinion against another.

There is no doubt that a defining moment for the finances of British Horseracing occurred in October 2001 with the replacement of a turnover based betting duty with a 15% gross profits tax. The prospect of exponential growth has already manifested itself. The William Hill prospectus is illuminating reading and provides an optimism for enlarged revenue streams for the industry to exploit.

The release of the Gambling Review Body’s report in July 2001 ushered in a more enlightened philosophy to gaming and betting throughout the United Kingdom. However, an opportunity was missed, hopefully only temporarily, to expand betting operations into pubs and clubs. The misperception that doing so would induce social irresponsibility is not supported by the experience in Australia and New Zealand where betting in pubs and clubs has flourished, without social dislocation.

As stated in the Annual Report, acceptance of this proposal would have increased consumer choice, giving an alternative to the distribution monopoly enjoyed by the off-course betting industry and also provided an opportunity for increased revenue for Government, racing, the punter and the betting industry. This is an opportunity that we will continue to promote at an appropriate time.

21 June 2001 was also a red letter day for British Racing with the BHB reaching agreement with Attheraces for the provision of data, enabling Attheraces to explore the vast opportunity offered by interactive technology. I wish them every success in their commercial endeavour and the consequential boost to our industry

It is well publicised that the Office of Fair Trading (OFT) is conducting an investigation into various aspects of racing in this country. The BHB welcomes the OFT enquiry and is committed to a vigorous and constructive dialogue with the OFT team.

The unremitting responsibility of the BHB, as governing authority of British horseracing, is to ensure that all interests within racing are represented, favouring no one sector to the detriment nor disadvantage of others. At the end of the day our concern is to provide the highest quality of racing to our consumers, particularly the racegoers, the media and bookmakers, at a price that represents true value.

I summarise the BHB’s philosophy to these challenging times by stating that “the OFT does not have a monopoly on change”.

Like so many racing jurisdictions we in racing are guilty of introspection. In creating a vision for the sport we love we must first understand what our customers want. They after all provide the income for our sport to prosper. And our customers are many, punters, bookmakers, broadcasters, sponsors as well as racegoers. We must become a truly customer focussed industry.

In an increasingly competitive leisure market it is unacceptable that we can only persuade 5% of the UK population to go racing and even less acceptable that almost half of the UK didn’t even know that one of our premier events, The Vodafone Derby, was run on Saturday

As for all of those parts of the industry which create the product, the owners, trainers, jockeys, stable lads, racecourses and numerous others, BHB must seek to understand the interests of all key stakeholders.

BHB must not, cannot be regarded as the dead hand of control. BHB’s role is to help construct, maintain and develop the commercial relationships that the industry want.

We must ensure innovative thinking, good management teams and risktakers are appropriately rewarded and that there is a fair distribution of racing income.

In looking at this industry, two admirable ambitions stand out. First, the determination to improve prizemoney levels and thus the risk/reward ratio of the long suffering owners who have financed a disproportionate cost for far too long. Secondly, the determination of the racecourses to provide an even higher standard of racecourse appointment, an enhanced commitment to customer service and to all who work so hard to put on the show.

As you all know I only arrived on these shores to take up my new appointment at the beginning of March. But it did not take me long to learn that the previous twelve months had been particularly busy and challenging for those who are now my friends and colleagues here, as well as for those who have left for pastures new.

The outstanding response to the Foot and Mouth outbreak; the launch of the Discover Racing Campaign; race planning initiatives too numerous to mention; the contribution to the Government’s Review of the VAT Scheme for Racehorse Owners; and the excellent work done by the British Horseracing Training Board and the Rehabilitation of Racehorses are only some examples of the work of the Governing Authority on behalf of the Industry.

An Industry that is blessed with strong political support and here I would like to acknowledge the encouragement and advice which we have received from the All Party Racing Group under the joint Chairmanship of Jeff Ennis and Richard Page. We look forward to the continuation of the very cordial rapport between this Group and the BHB.

I am indeed pleased to add that we enjoy very constructive relations with the many organisations that inhabit this great industry of ours. And in this context I would like to extend my gratitude for the warmth of the welcome extended to me by Rob Hughes, John Robb and Rodney Brack of the Levy Board. It cannot be easy managing an organisation with only a limited, but still undefined life, and I admire their skills. We look forward to working closely with them and their colleagues, as well as with the excellent Racing and Betting team at DCMS, headed by Elliot Grant, in the important transitional phase ahead.

As we all know an organisation is only as good as those who work for it. The recruitment of Nigel Smith as Managing Director, Commercial, James Halley as Finance Director and Trevor Beaumont as Racing Director, complemented by the redoubtable Tristram Ricketts, instils me with great confidence that the BHB Executive team can provide the innovative administration racing deserves and expects.

The British Horseracing Board is justifiably proud of all its staff who work tirelessly in racing’s cause.

I look forward to working with the BHB team and BHB Board, hopefully soon to be restructured, to achieve the strategies, objectives and aspirations of all who comprise the British thoroughbred horseracing industry.

To those who were present at my assignation with the Japanese Racehorse Owners Association, I implore you to disregard my injudicious comments regarding the superiority of Victorian Racing and acknowledge its successor, British Racing.