MP says UK racing is facing ruin

From sportinglife.com


Horse racing in Britain will "fall into ruin" unless the Government soon improves the relationship between the industry and bookmakers, a Tory MP has warned.

Matthew Hancock raised concerns that the horseracing levy paid by betting firms to help maintain the sport has declined in recent years.

In a backbench-led Commons debate, he urged ministers to overhaul the industry's funding system as gambling companies increasingly move offshore.

"I think all sides agree that the levy is broken and needs radical reform," he said.

"The bookies think that the levy's broken, racing thinks it's broken, the Secretary of State (Jeremy Hunt) thinks it's broken.

"No one wants the annual spectacle of ministerial decision about the funding of racing - not least because it unnecessarily antagonises relationships, wastes time and money, and prevents a proper commercial relationship between racing and betting."

The horse racing levy is based on a percentage of the gross profits made by bookmakers on the sport.

Mr Hancock said that in the past two years, the levy had fallen from more than £100 million to £65 million, and prize money had fallen from £65 million to £34 million.

"Even before this precipitous decline, Britain ranked 38th in the world for prize money - miles behind Dubai and Hong Kong but also behind America, Italy, South Africa, Sweden, Australia..." he said.

The MP concluded: "I passionately believe in the future of racing in Britain.

"I ask you this - years from now, will we look back in wonderment at this sport of beauty and skill and speed that fell into ruin, or will we say that in the nick of time we gave this great sport that we love the future it deserves?"

Mr Hancock's motion calls on ministers to bring forward "proposals to improve the system of funding for racing and the relationship between racing and bookmakers before the end of 2011".

It notes that 100,000 people are employed in Britain's horseracing industry, which contributes £3.5 billion to the UK economy each year.

Labour former sports minister Gerry Sutcliffe said there should be a "commercial solution" between the racing industry and bookmakers.

"The industry can't afford to lose the money from the levy - and the levy has gone down in recent years - but it cannot just rely on that," he said.

He said time was "running out" as the betting industry was changing and more firms moved offshore.

"There's got to be a commercial relationship in place," he said.

Tory Laurence Robertson (Tewkesbury) said the prize money was "essential" to keep stable staff, jockeys and trainers in work.

"If you take them out, then the whole sport, of course, collapses," he said.

He told MPs: "I've thought very long and hard about this and I think what the minister probably ought to do is announce that the statutory levy will end in, let's say, three years' time.

"That gives racing the opportunity to forge new relationships, to develop new income streams, but it knows that at that point it is not going to be there any more.

"I think setting that date will concentrate the minds of people in racing so that they have to come up with other funding mechanisms."

Outside the chamber, the Bookmakers' Committee, the statutory body negotiating the levy on behalf of the betting industry, called for a "modern commercial arrangement".

Chairman Will Roseff said: "The facts simply don't support claims that British horseracing is in crisis or that the funding from the bookmakers has fallen.

"Attendances at meetings are up, not down. The extra money that bookmakers are paying to courses for live TV coverage of meetings more than compensates for any fall in revenue caused by a decline in betting on British horseracing.

"Any rise in the levy is unnecessary, unreasonable and would put the future of 400 betting shops and 2,000 jobs across the country at risk.

"Ultimately, we need to get rid of this 50-year-old subsidy and come to a modern commercial arrangement through which the betting industry can support British horseracing as it always has done."

Liberal Democrat Don Foster (Bath) said: "It is critically important that we now find a sustainable future for that link between the racing community and the gambling community.

"In doing that we have to remove the involvement of politicians from this.

"I entirely agree with the Secretary of State when he said 'Frankly the Government should never be the last resort in an essentially commercial negotiation'.

"A sustainable way forward would have to be one that doesn't involve politicians.

"But politicians are going to have to help to find a way forward."

Labour's Catherine McKinnell (Newcastle upon Tyne N) warned: "The mechanism through which British horse racing has been supported since the 1960s with the significant profits it affords to the betting industry, is rapidly diminishing in its returns."

This was leading to a reduction in prize money as the levy funded half of all prizes and this in turn could further threaten the industry.

Tory George Freeman, whose jockey father Arthur won the 1958 Grand National on Mr What, said: "Racing is not just an industry, it sits at the heart of what it is to be British."

But Mr Freeman (Mid Norfolk) warned: "The problem very simply is this: the racing industry as we have grown to know and love it is unsustainable.

"Its financing model is broken and it is incumbent on all of us who care about it as an industry and about our economy to tackle that."

Tourism and Heritage Minister John Penrose said the Government was considering how best to deal with the issue and therefore could not yet provide MPs with a detailed announcement.

But he said any solution had to offer a "level playing field" for bookmakers and betting exchanges, which he described as "fundamentally different business models".

He said there was a "symbiotic" relationship between betting and horse-racing and it was important that any legislation did not discriminate between racing and other sports.

Mr Penrose added: "We have to have a level playing field between people who are placing bets on domestic bookmakers and betting exchanges and remotely or overseas through operations that are based offshore and may be done through the internet as well.

"Clearly this is something we are a long way away from at the moment. There is a broader issue here too. It's also a question, I believe, of consumer protection.

"At the moment people who are putting bets on in Britain... are protected by the rule of the Gambling Commission.

"If you are putting a bet on equivalent sets of games which are regulated offshore, those protections may be very severely lower than they are for the UK or, indeed in some cases, could be zero or nothing at all.

"That clearly has implications and potential problems for problem gambling in future."

The motion put forward by Mr Hancock that the Government should "bring forward proposals to improve the system of funding for racing" before the end of the year was passed without any opposition.