Arc risks alienating owners with purses cut

"This precipitous act has further ramifications for prize-money, particularly at the lower levels"

By the time these words are in print one can reasonably hope that equine flu has become little more than a disconcerting memory, while the potential problems caused by Brexit are on the way to being solved, at least for racing and breeding.

One problem that is not going to go away, however, relates to the inevitable closure of betting shops as the new FOBTs legislation comes into effect, causing levy, racecourse media rights and prize-money to fall from an all-time high.

Ironically, it was not long ago that we were celebrating the government initiative to widen the scope of the horseracing levy by closing the overseas bookmaker loophole, this having led to an estimated £45 million annual boost for racing’s central funding.

But our elation was always going to be short-lived. Hot on the heels of the news that the new FOBTs legislation was to be implemented this spring – six months earlier than had first been anticipated – it was surprising to find ARC racecourses announce a reduction in their prize-money contributions by 16% from 2018 to 2019, especially given their wholehearted support of the industry-led Authorised Betting Partner policy.

The consequences of what now appears to be a precipitous act has further ramifications for prize-money, particularly at the lower levels. For when racing viewed the world as a happier place, a very sensible scheme was set up so that extra levy payments to racecourses for prize-money were linked to a racecourse contribution of £900 per applicable race.

Now, with those contributions seemingly under pressure, it remains to be seen what the outcome will be. Some racecourses have suggested the extra levy payments should be ‘unlocked’ anyway to mitigate the damage to prize-money, but where would that leave other racecourses who, despite the anticipated fall in their media rights payments, have commendably upheld their own contributions to prize-money?

The immediate effect of the ARC decision has not only seen prize-money decline, but also the suspension on their 16 racecourses of the much-vaulted appearance money scheme that has been paying prize-money down to eighth place.

It means that total prize-money for a Class 6 race on an ARC course now has £3,500 guaranteed (spread over the first four) against £6,569 (spread over the first eight) on most other racecourses. If nothing else, this wide prize-money disparity must surely have significant influence on the running plans of owners and trainers, especially now that ARC have also implemented a group-wide policy of no longer dividing races.

Although there is a general feeling that the levy is going to be hit by shop closures, we can see here the real impact will be felt by racecourses who have lived in a world of relative affluence in recent years, enjoying an abundance of money coming from betting shop pictures. The formula by which racecourses receive this media rights income may be complicated and shrouded in secrecy, though the simple truth is a decline in betting shop numbers means a fall in racecourse income.

The large betting companies have stated that 1,000 shops will close this year, though some suggest this figure has been exaggerated. ARC say the impact of shop closures on media rights income has already started to take effect and, facing a worsening situation, they simply could not continue to support their previous levels of executive contributions to prize-money. It has, incidentally, long been their contention that they do not receive their fair share of levy funding compared with the amount of income from betting their fixtures generate.

If predictions of 4,000 betting shop closures are realised, it would, indeed, leave British racing facing a catastrophe. It is for this reason we must stay close to the government, constantly reminding officials of the undertaking they gave us to look once more at further widening the scope of the levy system if the new FOBTs legislation impacted badly on racing.

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