President’s blog

By Paul Dixon

July 2010

Time to get radical as prize-money plummets

Bookmakers and racecourses must be held to task as levy picture worsens

Racing’s funding crisis continues to deepen as Levy Board income diminishes. Minimum prize-money values for the second half of the year are forecast to decrease by at least 10%, while projections for 2011 suggest prize-money levels of most races will struggle to match those of ten years ago.

These figures will have a devastating effect on an industry that is already on its knees. Go behind the glamour and glitz of Royal Ascot and you find a very different racing world where trainers are going out of business, stable workers are losing jobs and the rural economy, in which racing plays such an important part, is feeling the cold winds of recession.

It’s time for owners to get radical. The first thing to do is to quickly gag anybody who tries to tell you that prize-money is not important because this is a leisure pursuit and that nobody should expect to have their hobby subsidized. How many more times? Prize-money drives the economic cycle that is racing. If my horse wins prize-money, I re-invest some or all of it in paying training fees and buying other horses. Levels of prize-money dictate the extent to which I do this. Of course, racing is my pleasure and passion but it is also an economic fact that what I get out dictates what I put back in.

That aside, £12billion is bet on British horseracing a year. It is shown on TV screens in 10,000 betting shops, on two dedicated racing channels, on terrestrial television and seen and bet on by nearly six million people a year on 60 racecourses.

As owners of the product that drives all this we not only deserve to have a reasonable return on our investment: it is also essential for the wellbeing of British horseracing and the rural economy. A recovery on training costs of 20% is not reasonable as the international comparisons bear witness.

French racing gets 8% of its betting turnover; we get 1% if we are lucky.

Much of our problems have to be laid at the door of the Levy Board. Not so much the Board itself but at the system that underpins it – outmoded in the modern world, exploited to the hilt by bookmakers and simply not fit for purpose.

To those who say we’re lucky to have the levy we should point out we’re much more unlucky not to have a pool betting monopoly which is enjoyed by virtually every other major racing country in the world.

Although we can’t blame the Levy Board for the downturn in betting and margins on horseracing, we can continue to ask why they have allowed the levy system to stagger on with all its imperfections.

We can wonder why the last government, while paying lip service to supporting us, has never appreciated racing’s worth to employment and to the rural economy and done nothing about modernising the levy so that it delivers a fair return to owners who keep the horseracing industry afloat.

We can only repeat our refrain to the new administration and hope that it will not be lost in the morass of bad economic news.

We can, incidentally, also continue to ask racecourses why their contributions to prize-money continues to diminish, in marked contrast to their media rights income which has now risen to over £60 million a year and will soon be challenging the levy as racing’s biggest source of funding.

So, yes, it is now time for owners and trainers to get radical. Whatever bookmakers might say, horseracing is still their core product. Of course, we have a diminishing market share as the betting industry has diversified but you only have to be in a betting shop on any Saturday afternoon to know where the passion of most punters continues to lie.

Ultimately, this gives owners a great deal of power. And we are fast approaching the time when we must use it.

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