Three recent interconnected events in the world of racing politics will have a profound effect on the future of our industry.
First, there was the signing of the Members’ Agreement between the horsemen, racecourses and BHA which has at last established a much-need united front for racing.
Second, there was the concept of Authorised Betting Partners (ABP), which sets out to establish a more viable relationship between racing and betting operators.
And third there was the failure of racing and the betting industry to find agreement on the 55th levy scheme, showing that racing is no longer prepared to accept any proposal that does not take account of British horserace betting on all digital platforms.
The fact that both Jockey Club Racecourses and ARC are now signed up to taking sponsorship only from those bookmakers who are ABP-accredited sends out an already strong message
The fact that both Jockey Club Racecourses and ARC are now signed up to taking sponsorship only from those bookmakers who are ABP-accredited sends out an already strong message. It would be even stronger if, as I hope, the large independent racecourses, particularly Ascot, York and Goodwood, also adopted this policy.
Accepting sponsorship is just the first in a number of significant benefits that will accrue to accredited bookmakers, and the intensely competitive nature of the betting industry will make those bookmakers left ‘outside of the tent’ feel decidedly uncomfortable.
The dramatic drop in levy payments to racing from over £105 million in 2004-05 to a forecast £53m in 2017-18 highlights the importance of establishing a racing right system to replace the levy. Until this happens, however, racing cannot afford to allow an estimated £30m a year to be lost as a result of most betting operators avoiding levy payments by directing bets through overseas platforms.
In recent years bookmakers making so-called voluntary payments in the form of lump sums as part-compensation for lost levy has proved to be another tough lesson for racing. As I highlighted in a recent editorial, this form of payment leaves racing vulnerable, as bookmakers invariably find ways of avoiding original commitments.
Whatever the options open to us before the establishment of a racing right, they must be based on watertight contracts that ensure a set percentage of the business taken on British horseracing is paid to racing. Lump sum payments are at the whim of the bookmakers. They require no audit and we have no idea whether they reflect the quantum of horserace betting.
An acceptable alternative that some betting operators have embraced is to pay the levy voluntarily on their digital business, or, as in the case of Betfair, have a commercial funding deal in place that sees them pay an equivalent amount.
So the determination of the next levy scheme is now the task of the Department for Culture, Media and Sport, though government officials must be privately hoping that a settlement can be found between racing and the betting industry before they get their teeth into the minutiae.
Although, of course, the Culture Secretary, John Whittingdale, has no jurisdiction over the offshore element of bets taken on British horseracing, his department are well aware the offshore question is crucial to their decision.
They must also understand that the £10m annual sum that bookmakers claim racing has been offered to reflect bets diverted overseas will not be realised and, in any case, £10m, when set against the £30m racing believes it should receive, represents an enormous gulf between the two sides.
As members of the department juggle with the figures in an attempt to find a compromise, they cannot fail to acknowledge the only way to prevent these periodical wrangles is to replace the dated and inadequate statutory levy with a system based on a racing right.