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|Racing Right: new false dawn, or the key to a treasure
Osbornes Budget surprise of a Racing Right greeted by BHA ecstasy and
bookmaker dismay and its chance of success is in the
The announcement by
George Osborne in last weeks Budget that the government intends to
introduce a Racing Right to replace the Levy system received a predictably
ecstatic response from the ideas long-term supporters, including the
British Horseracing Authority and Matthew Hancock, the MP for Newmarket. It is
or will be the biggest step forward for racing in a
generation according to Hancock, while the BHAs chief executive,
Nick Rust, who arrived from Ladbrokes in mid-January, described it as a
welcome and tremendous boost. For at least two decades, possible
Levy replacements have trundled out of the hangar and along the runway at
regular intervals. Racing seems confident that this one is actually going to
Amid all the euphoria, it was easy to dismiss the suggestion of the
Association of British Bookmakers that the scheme is unworkable as
sour naysaying. There were probably those on terra firma muttering something
similar as the Wright brothers made their final checks. After so many years
when racing has scraped by on £80m or more via the Levy each year and
another £170m or so in media rights payments, the feeling seems to be
that the evil bookmakers have been cornered at last. Racing will finally get
its hands on the tens or is it hundreds? of millions that the big
firms have been bleeding from the sport for so many years.
And perhaps it is true. Maybe the
introduction of a Racing Right really will unlock a treasure chest. As the
sport wades knee-deep through cash and into a bright new dawn, it will all
seem, in hindsight, embarrassingly straightforward. Simply create a right to
accept bets, and give it to racing to sell to betting firms. Did it really take
30 years? Why on earth did nobody think of it before?
expectation is now sky-high following Wednesdays announcement. If this
idea goes the same way as all the other Levy replacement schemes and returns to
earth somewhat earlier than planned, it will do so with an almighty bump. So
what, realistically, are its chances?
A good place to start is to look
at the form. The Racing Right is at least Plan C when it comes to Levy
replacement. The sale of pre-race data was the original plan, but that hit a
brick wall in a European court in November 2004. The sale of picture rights was
floated as another possibility, until it became clear that live coverage of
racing is not as important and valuable as the betting it
stimulates. It is the icing, not the cake, and in any case, the racecourses own
the rights, not the governing body.
The Racing Right might be the life-changing winner
that the sport is praying for, but the form book suggests it is not the biggest
certainty to poke its nose through a bridle. And if the sport is banking on its
new Right eventually delivering a step change 50%, say? in the
total amount that the bookies pay to racing, a personal view would be that the
odds against that could be well into double figures.
What is all but
certain is that the Right will face legal challenges both at home and abroad.
It will give a combination of racings governing body [BHA],
racecourses and horsemen the ability to name their price for offering
bets on British racing, a product on which they have a monopoly. The
competition authorities seem certain to take a close interest in how they
The monopoly issue becomes more significant if racing
attempts to sell itself on an all-or-nothing basis, but might be overcome if it
were divided up into separate packages the big, important stuff and the
rest, for instance. In a week when Great British Racing lopped off nearly eight
weeks from the Flats turf season to create a jockeys championship
that runs from May to mid-October, that suddenly seems more feasible than it
did last month. It might also be possible to vest the Right with individual
tracks. That, though, could have significant and negative long-term
implications for some courses, not least the small-to-middling turf courses
with limited fixtures to sell.
Even if the Racing Right satisfies
British competition law, there is Europe to consider too. Racing will be handed
its monopoly by the government. Osbornes announcement was a cause for
celebration at the BHA offices in High Holborn but, across the EU, lawyers
specialising in state-aid legislation will see it as the moment to rise from
their coffins, adjust their capes and polish their big pointy teeth.
The chances are not entirely independent, but even if the Right is a
shade of odds-on to survive either challenge, it is probably odds-against to
emerge unscathed from both. So does racing really propose to raise and
distribute money using the Right, perhaps for several years, when a judge might
eventually insist that it must be handed back?
There is a further
problem with the Racing Right too, which could also mean that it will struggle
to deliver the long-term transformation in the sports finances that so
many seem to expect.
Even if it ultimately operates as intended,
bookmakers will still be passing on money to racing because they must, and not
because it is good for their long-term health. There will be no incentive for
bookmakers to promote racing to their customers quite the opposite, in
fact. There will be an added financial incentive to steer gamblers towards
sports like football, and above all cheap, risk-free gaming products like to
betting terminals (FOBTs).
If racing is to realise its full value from
the betting public, bookies need to be offering it as a product not because
they have to, but because they want to. Unfortunately, it is a difficult point
to accept after 50 years of bitter Levy battles, and for as long as racing
feels it has the bookies on the retreat, few of its generals will be inclined