Gambling

Written evidence submitted by the Racecourse Association Ltd (GA 85)

This response is submitted by the Racecourse Association (RCA), the trade association for 59 of Britain’s racecourses.

Summary:

 The Gambling Act 2005 has had a direct impact on Racecourse businesses due to the proliferation of offshore gambling operators who do not return a fair share of their profits from horseracing back to the sport.

 Racecourses and on course bookmakers will, from 1 September 2012, enter into commercial agreements.

Introduction

The Racecourse Association fully supports the more detailed submission that will be made to the Committee by the British Horseracing Authority on behalf of all the fellow constituent organisations in the sport.

This response adds several points that are specifically relevant to racecourses and how they have been impacted on by the Gambling Act.

Impact of the Act on Racecourses

The proliferation of offshore gambling operators is of particular significance to racecourses. Landbased betting operators pay a return of the profits they make from horseracing back to the sport, in a statutory mechanism called the Horseracing Betting Levy. This mechanism was devised before the introduction of the internet and, as such, offshore operators are not required to participate. In the years 2004-2008 payments to racing via the Levy averaged over £100m but have since declined rapidly to £91.6m in 2009, £76.5m in 2010 and £59.5m in 2011. Such a fall in Levy funding has had a hugely detrimental effect on racecourses in two regards. Firstly, in the racecourses ability to offer sustained levels of prize money and secondly, the abolishing of capital loans from the Horserace Betting Levy Board (HBLB). Many racecourses are being hampered by their inability to improve and upgrade their infrastructures and develop their businesses which has come as a direct result of a fall in Levy proceeds. While these points will have been fully expressed in the British Horseracing submission, it is important for us to reiterate them here.

The financial impact of the Act on the UK gambling industry – On Course Bookmakers

As a result of changes brought about by the Gambling Act to modernise the relationship between racecourses and On-course bookmakers, commercial arrangements are being introduced from 1 September 2012, applying to existing betting areas on racecourses. The RCA and racecourses recognise that On-course Bookmakers play an important role in the provision of raceday services and their presence adds hugely to the enjoyment of the day by racecourse visitors.

In 2009 DCMS facilitated discussions between the RCA and the Federation of Racecourse Bookmakers (FRB), which resulted in production of an outline framework to be used for discussions regarding future commercial arrangements. Negotiations then commenced at a local level between racecourses and representatives of the FRB.

These discussions are well advanced and have progressed most amongst the three main racecourse groups; Northern Racing, Arena Leisure and Jockey Club Racecourses.

Northern Racing have reached an agreement which has been recommended for acceptance to bookmakers by the FRB and contracts have been distributed to all bookmakers operating on Northern Racing courses. Arena Leisure has agreed contract terms with the FRB and will send contracts within the coming months. After lengthy negotiations, Jockey Club Racecourses (JCR) sent a draft contract to the FRB on Saturday 21 May and it is hoped to have the matter fully concluded by early summer. There is an outstanding issue relating to ‘data’ and JCR will facilitate a meeting between Racecourse Media Group (RMG) and the FRB to address this on behalf of all RMG racecourses.

The smaller racecourses will follow the lead set by the Groups and large independent Racecourses and in this regard, the RCA will hold a briefing for all courses on 13 July 2011 to publicise the group deals. We are working on the basis that racecourses would like to conclude arrangements by 1 September 2011. Ideally contracts should be signed by this date though this is likely to run over as we are in a busy racing period and the contract distribution and signature process is quite an administrative burden as each racecourse must send each bookmaker on their lists (many of which are extensive and run into 100s) a full contract for signature. Therefore, the RCA would estimate a target date for completion by the end of 2011.

July 2011

Prepared 12th September 2011