Horse racing continues to raise concerns around its finances and sustainability, and these concerns continue to be picked up by UK political stakeholders.
In a Westminster Hall debate this week, the Shadow Minister for Sport, Gambling and Civil Society, Louie French MP of the Conservative Party, discussed the situation facing racing and betting before MPs. An issue raised repeatedly by the industry has been fundraising, particularly the betting levy.
Due to the intrinsic relationship between racing and betting, with each as old as the other, UK racing is supported by the horse racing betting levy, whereby licenced operators make annual payments to support the sport. It is also very financially reliant on media rights and sponsorship payments.
“People who do visit a betting shop or a racecourse are helping to support the horse racing industry with the horse racing betting level levy, sponsorship and media rights, raising around £350m for the sport overall,” French remarked.
“However, from those conversations that I’ve already had as the Shadow Minister for gambling, I know that there is an increasing tension in how the levy operates, and we’ve heard about that already today.”
Racing has been having a tough time financially over recent years. The COVID-19 pandemic hit the sport’s finances hard and many racecourses have struggled with attendees.
The discourse around the Gambling Act review, particularly the prospect of affordability checks, have also worried racing stakeholders. This has led to a review of the betting levy, initiated this year, to ensure that racing’s finances are not unduly impacted by the Gambling Act review.
However, it is not just racing stakeholders that are concerned about finances. The betting industry too has expressed worries about the impact affordability could have on their own finances, on top of betting duty and other taxes – which are rumoured to be increased in next week’s budget.
In Parliament, French noted that bookmakers are paying 10% of gross profits from horse racing back into the sport via the levy, in addition to the 15% paid in betting duty to the exchequer.
Levy contributions, meanwhile, are increasing. The 2021/22 financial year saw a contribution of £97m, the 2022/23 financial year £99m, and this year it is expected that around £105m will be contributed.
This is despite betting interest in horse racing, although still significant, declining in recent years. Football overtook racing as the most bet on sport in 2019, according to the Betting and Gaming Council (BGC) trade body. There appears to be a growing financial disconnect between betting firm’s takings on the sport and the financial contribution it makes to it.
“This is causing great concern amongst not only racecourses but also the Betting and Gaming Council members,” French continued.
“I’ve even heard of reports of some or operators. already withdrawing offers such as paying extra places on races and best odds, guaranteed, and some members of a comment so far as not offering prices and horse racing meetings all together. This is not sustainable, or good after racing.”
Racing’s concerns are long-held and repeatedly aired. However, the government’s sporting focus at the moment seems to be on football, with Labour introducing its new version of the Football Governance Bill yesterday. Racing will have to continue the waiting game as it looks for a political solution to its financial struggles.
