26 Nov 2003 Pre-2014 Releases

25 November 2003
Presentation by
British Horseracing Board

I have entitled my presentation this afternoon, “Four Weddings…. or a Funeral”. And I have done so because it is my firm belief that the Racing and Betting Industries need to hear the sound of joyous wedding bells rather more often than the sometimes deafening sounds of the battlefield, if we are not to end up with a funeral march into history. And I want to spend most of the time allotted to me this afternoon identifying the key partners whose alliances will hopefully give rise to those glorious peals of bells. And I should add by way of further introduction that some of the relationships I shall refer to have already been successfully forged – some partners are in the engagement stage, some are married but the marriage is not yet consummated, while others have consummated but are still on honeymoon.

The first, and arguably most important alliance, is between Racing and its many different customers. This great sport of ours has made huge strides in recent years in getting closer to its customers and making determined efforts to meet their increasingly demanding requirements. The Marketing of racing has improved out of all recognition : it is already many years since the manager of one small racecourse told me that he wouldn’t have time to start marketing his new boxes until the school holidays were over. Racecourses and BHB, as the Governing Authority, are now devoting significant and clearly targeted resources and expertise not only to marketing but also, importantly, to market research. The BHB Racing Review Committee did extensive market research before coming up with its customer-focused recommendations earlier this year and BHB’s Marketing Department, as well as many racecourse marketing units, commendably do exactly the same, as of course do our Tote and bookmaking colleagues. The developing customer base of Racing and Betting makes it vitally important that we all keep abreast of what those who consume our product, and indeed also those who currently don’t, really do want.

The second alliance is between those great independent, but interdependent, British Industries : Racing and Betting. After years, not to say decades, of sparring, a real breakthrough was made eighteen months ago when, on 17 April 2002 a deal was struck between BHB and bookmakers which provides the basis for the commercial mechanism which Government wishes to see replace the levy. And on this, the day before the Queen’s Speech, we await a Government announcement on the promotion of legislation in the next Parliamentary session to abolish the Levy Board, and also to facilitate the sale of the Tote to a Racing Trust. The levy legislation, as we understand it, will be enabling legislation, giving the Secretary of State broad powers to abolish the Board to a timetable and in a manner of her choosing. If the legislation is promoted and is passed, there will of course need to be some detailed discussions with Government next summer on the precise timing of the abolition and the move to a wholly commercial mechanism, given the current uncertainties arising principally from the OFT Inquiry and the database issues currently before the European Court of Justice.

Meanwhile the much improved relationships between Racing and Bookmakers should be a cause for celebration and quiet enjoyment, but the emergence of gross profits as the basis for both betting duty and betting levy has led some to cry ‘foul’! For if Racing and Bookmakers are in bed together, because Racing’s take now depends, as it does, on the level of bookmakers’ British horseracing gross profits not turnover, that can only, they muse, mean one thing: the punter is getting squeezed too hard.

This is however far from being the case as it is simply not in our interests. Squeeze the horseracing punter too hard and he will not only squeal, but take his custom elsewhere. The one thing I would say in this context, however, is this. The Racing product is not cheap to produce. Horses are expensive animals who need, and I’m pleased to say get, a lot of loving care and attention. To provide for their safety and that of their riders does not come cheap either. The logistics of staging and maintaining vital integrity at a race meeting are such that substantial investment is required in both plant and personnel. It is right therefore that the bookmaker and the punter should contribute to the cost of the product from which they derive profit and/or pleasure. You can always argue the quantum but you cannot reasonably argue the principle – and to be fair, bookmakers don’t …. well, not since Richard Manning sold out anyway!

The third alliance is between Racing and Government, an alliance of mutual understanding which has never been more needed than it is today, with not only Tote and Levy legislation in prospect, but also the most comprehensive Gambling Legislation in 40 years, about which we heard from Andrew McIntosh this morning and to which John Greenway and his colleagues will shortly apply vigorous pre-legislative scrutiny. Over three years ago, the Government signalled a clear intention to disengage from its commercial involvement in Racing, which it has because of its responsibility for the statutory Levy and Tote Boards. Racing needs to help Government disengage in an orderly manner, while Government needs to help Racing by ensuring that it disengages in a way and on a basis which enables a secure and stable commercial relationship between Racing and Betting to flourish, and a Tote in the ownership of a Racing Trust to continue to provide the punter with choice, and Racing with an increasing income stream from an operation which was set up three quarters of a century ago for precisely those two purposes.

As we move forward with Government into the legislative arena, we are very fortunate to have at DCMS a Ministerial and official team who are not only knowledgeable about, but also take a very positive and proactive interest in, the many complex issues involved. Some of the team are here today, and we look forward to continuing to work with them as the various pieces of legislation hopefully make progress through Parliament in the coming months. And I should add that this partnership of understanding with Government has most recently borne fruit with the introduction of GPT, successfully addressing the offshore problems and providing the context for commercial deals between Racing and Bookmakers, and the welcome further renewal a year ago of the VAT Scheme for Racehorse Owners, which helps our Industry operate on a more level playing field vis a vis our overseas competitors.

The fourth and final alliance is that between two key stakeholders within Racing itself: the racecourses and the racehorse owners.

The relationship between the owners of Racing’s theatres and the owners of Racing’s equine actors has always been an important one. So many of the Industry’s funding issues revolve around the balance between investment in racecourse facilities and investment in prize money, and a balance it must be because of the linkages between the two. Investment in racegoer facilities, allied with creative marketing, will increase turnstile revenue, from which prize money is partially funded. Equally, investment in prize money should help enhance the quality and competitiveness of the racing, leading to increased crowds, more turnstile revenue and a greater capacity to generate the funds for that prize money investment. The two types of investment are inextricably linked, which clearly implies the need for a balanced and mutually understanding approach to key funding issues.

At a time when the future Governance and funding of Racing are at the top of so many agendas, it is extremely heartening to see the emergence of what appears to be a genuine desire on the part of both racecourses and owners to work together to help develop a new Governance and financial structure for our sport and to address the key issues arising from the OFT Inquiry. That these two key players should work together in this way is vital too for all those other Industry stakeholders who play such an important part in producing our high quality racing product. The fortunes of breeders, trainers, jockeys, stable staff, farriers, transporters and many others are, at the end of the day, crucially dependent on the ability of our racecourses and our owners to work together, with the help of a strong Governing and Regulatory authority, to improve the financial health and stability of the Industry from which they derive their livelihood. We must hope and pray that this particular marriage is consummated quickly and lasts and lasts.

For if this, and the other alliances I have referred to, are not successfully forged and maintained, the early chords of the funeral march will begin to be heard. How much better to look forward to the peal of the wedding bells, celebrating and consolidating the very real progress made in the last few years. Many of the trends, as an earlier speaker rightly pointed out, are very positive, and can be made even more so if the alliances I have mentioned are successful.

Now, alliances have to be built, to some degree, on passion, and passion is central to my final theme here this afternoon. The worries about the future of National Hunt Racing have been well aired and the subject of much media comment, for which RHT’s recent National Hunt Review, which is now to be the subject of discussion with BHB and many others, including the betting Industry, over the winter, has acted as a useful and timely catalyst.

When the Government asked BHB over three years ago to come up with a plan for the replacement of the Levy, it referred in its invitation to, and I quote, “the future funding of Racing as a National sport”. I suggest to you, Ladies and Gentlemen, that Racing in this country cannot be a truly National sport without National Hunt Racing, and that when we refer to the grass roots of Racing, as we do in so many contexts, it is the jumping fraternity who, perhaps more than any other, represent those roots in the green fields of England, Scotland and Wales. The passion shown by the National Hunt community must be reciprocated by those in positions of influence and authority, not only in Racing but also, I suggest, in the Betting Industry.

Bookmakers already demonstrate their strong support for National Hunt Racing by their sponsorship of individual races and indeed some race meetings in the jumping programme. Racing commends and thanks you for that. But in these times of great uncertainty, I make a strong plea to all of you in the Betting Industry to do what you can to reassure those who are understandably concerned about the future, that bookmakers continue to be supportive of National Hunt Racing and, on the back of that, will put their money where their mouth is.

In return, National Hunt Racing will, of course, have to play its part in ensuring that the product is attractive for all its customers, including punters and bookmakers. And I should emphasise that this is not in any sense to suggest that there are not issues in Flat Racing, both Turf and All Weather, that also need to be addressed. There are. But particular concerns have been expressed about National Hunt Racing and I thought it appropriate in this audience to urge you all to do what you can to bolster support for this vital part of our National Racing Programme.