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If this was an Auction, Mr. Dunlop would be admitting to running a Ring, and be liable to a criminal prosecution. Interesting legal position, when the other trainers have denied it.
But it isn’t an auction, and there’s no crime or even "interesting legal position"!
In which case, do you not think it odd that the other two trainers implicated denied having any such conversation with Dunlop? He is doubtless now regretting having said what he did.
Any even-handed outsider would take a look at this situation. Were any bets placed on the walk-over "winner" whilst these discussions were going on? I am absolutely sure that these eminent trainers are not in the business of race fixing, but they should take care about collusion as to who’s running and who’s not.
I’m sorry to say that I find it hard,
cjboy
, to sympathise with you about British prize money. I assume that you race horses for your pleasure, with some spare money you are lucky enough to have, rather than to make a living. I also assume that you are a British resident.
If these assumptions are correct I’d have thought that an afternoon out at (say) Wetherby was likely a fair way more pleasant, convenient and affordable a trip for the pleasure of seeing your horse run, than a long and tiresome journey to Lyon Parilly or Roscommon.
Of course I race for pleasure, but in the reasonable expectation that if I do well and pick a good horse, or even better breed a good horse, I will get a proportion of my not inconsiderable outlay back.
You follow racing, whether it be the betting or in any other way, also for your pleasure.
Your hobby will disappear unless mugs like me are prepared to subsidise it by running horses in the UK. I do that to some extent, but racing for £1500 at Wetherby? No thanks, I’ll be at Punchestown, Leoplardstown or Auteil.
Y’know what, there is an alternative should the Horsemen care to consider it.
Club together & purchase a racecourse.
Raise the funds for prize money however you like, disallow high street bookmakers from having pitches, give punters the facilities they want, do the whole thing the way it should be done. Break away from the BHA if you need to.
Make a model for the rest to follow & they most surely will.
Can’t be done? Well I don’t know the history but I’m assuming Northern Racing, Jockey Club Racecourses & Arena Leisure all started off with one, then they set about building a portfolio.
Great Leighs is still for sale, the course is still intact, go for it!
It’s also been mentioned that the prize money at the very bottom end barely covers costs. With that being the case, surely that should be the Horsemen’s focus. By targeting races of Class 4 & upwards (for horses that have probably already won a few quid) you’re just making it look like greed.
I’m planning a detailed blog post on this over the next week or two but I’d like to set some things straight here.
I am not against increased prize money in any way so long as it’s achieved without excessively damaging the current fabric of racing (some changes are inevitable).
Racing was my first love, and has remained so. I’ve had the good fortune to work in several areas of it: I have done the coalface stuff as a betting shop manager in my younger days. I was marketing manager at Aintree for 4 years so I know the racecourse side and the problems they face.
I spent 7 years with SiS, so I’m familiar with the broadcasting aspect. And I spent 5 years on the board of Tote Bookmakers as commercial director.
I’ve dabbled in journalism having published a few articles in the old Sporting Life. I mention all this to let you know I have a fair bit of experience of the varied points of view in the industry.
Most of the current problems racing faces stem from the BHA having no control of industry media rights. Soccer is a very valuable sport from a media rights viewpoint, not least because the rights are negotiated by the ruling bodies rather than individual clubs.
Racing’s media income will never reach soccer levels as it is miles below it in the popularity index. But racing could have a much healthier long-term future if the BHA had sole control of media rights. Its secret would be to
charge less for them
to keep the maximum number of off-course bookmakers in business.
As it stands, racecourses – as individual entities, or groups like Northern and Arena – are revelling in a free-for-all. Do you seriously believe Northern and Arena would be in this business if they could not negotiate their own media rights?
When I was at Aintree in the mid ‘90s, only 12 racecourses were making an operating profit. Without the Levy, 47 racecourses would have been in deep trouble and would probably have closed.
I suspect that quite a few more racecourses could now survive without the Levy, but I doubt it is more than 50% of the current 60.
Prior to the advent of SiS, in the old Extel days, off course bookmakers paid for the blower commentary and wall sheets from Jackson & Lowe; their running costs for feeding info to customers would be minimal compared with today.
Back then, a shop taking £1m a year was a jewel in the crown, Two weeks ago I spoke to the MD of a prominent Midlands chain of independents who sent me his figures for a shop taking £1m a year – he closed it shortly afterwards as it was making a loss.
A bookmaker setting up today needs to find £14,000 PA for SiS and another £7,000, approximately, for Turf Tv. An independent also needs to pay the Gambling Commission about £1,700 a year for an operating license (The multiples pay about £250 a shop due to the highly inequitable Gambling Commission fee structure).
On top of these costs, add the normal operating expenses for a retail business – a business, remember, that cannot raise its prices; a business whose ‘natural’ margins have been seriously eroded by activity on the exchanges.
I met a long-established independent bookmaker a couple of months back who asked me if I knew of anyone who would take the keys to his eleven shops – at no cost. Celtic Bookmakers – a 60 shop chain in Ireland recently went bust. Hundreds of independents are closing each year.
The elimination, in the Gambling Act, of the demand criteria (new license applicants within a quarter mile of an existing shop had to prove that there was unmet demand in the area), has left independents as shrews in full view of the hovering hawks that are the ‘majors’.
Next time you’re in a town centre, take a look at how many major bookmakers are now, literally, next door to each other. Economies of scale allow them to run at tiny margins, FOBTs being the engine that keeps them ticking over (47% of the betting industry’s profits last year came from FOBT machines) yes, 47%.
When Extel were the sole broadcasters, racing’s share of the betting market was above 80%. Today it is below 50% and falling. The further it falls, the more the bookmakers celebrate because the nearer they come to being able to dispense with the costs of buying picture rights from racecourses.
Howard Chisholm runs 49 shops in the North east of England. His is a family company of more than 50 years’ standing. (Buying a 50th shop would push him into the next level of the daft Gambling Commission fees structure).
Mr Chisholm has never subscribed to Turf Tv. His business has not suffered though he has had to increase his concessions to keep punters, but those concessions are nowhere near as expensive as paying AMRAC £350,000 per annum for pictures.
Mr Chisholm is most astute. His estate is one of the few owned by independents that will probably survive. But his policy should teach racing two significant lessons:
1 A well-run off-course bookmaking business can survive without paying for pictures from the ‘major’ racecourses.
2 The large corporations will not be blind to that fact.Bookmakers do not need live pictures from racecourses to survive; all they need is a level playing field. Given the choice, I have no doubts at all that every single company would rewind to 1987 and happily resume with audio-commentaries from Extel at a paltry price.
So, independents are steadily closing. The big boys are slowly but surely taking the place of the independents. The stronger the big bookmakers grow, the weaker racing’s position becomes. I’d be the last person to suggest that a cartel might eventually be formed, but if half a dozen companies control 99% of the country’s betting shops, racing’s negotiating position will be substantially weakened.
Coral broke ranks and signed for Turf Tv just before the deadline (a deadline for Turf Tv partners AMRAC too – who were in dire trouble but tempted Coral with an excellent deal). Coral’s rivals were forced to follow, but do not assume that a reverse of the situation cannot happen – Howard Chisholm has proved there is life, and profits, without Turf Tv.
Nor should racing, or bookmakers, forget the singular basket of eggs that hosts almost half bookmakers profits. Fixed Odds Betting Terminals (FOBTs) are by no means a stable income source. The government has its beady tax eye on them as does the problem-gambling lobby.
Two years ago I asked the CEO of one of the major chains what would happen if FOBTs were abolished; “We’d close 80% of our shops” was the answer.
Tuffers, and many others believe that racing needs to find a funding mechanism other than the Levy; media rights is not that mechanism. Media rights is the Levy in fancy dress – the bookies still pay the bills.
Grand plans for income from sports betting rights (SBR) on racing will simply not happen. Bookmakers will stop accepting bets on horse racing rather than pay for SBR for the sport because to do so would be an implicit admission that all the sports they bet on are also entitled to a payment.
Bookmakers’ net profit is currently around the 2% to 3% mark. Add the costs of SBR for all sports and wave goodbye to High St betting shops. And good luck with getting a payment from the offshore online guys.
Alan Morcombe, CEO of the Horsemen’s Group, did not cover himself in glory in his previous business venture with Alphameric. Global businessman and highly respected judge Joe Lewis tried to unseat Mr Morcombe more than once, before the Alphameric CEO slipped away quietly having used his own 1% shareholding in the company to engineer his skin-of the-teeth survival in JL’s final coup attempt.
Mr Morcombe is credited with setting up AMRAC and driving Turf Tv – in fact the project was the brainchild of Alphameric’s Development Director, the very able Phil Siers – now retail MD at rival SiS.
After speaking at a seminar at the Betting Show some time back, Mr Morcombe’s first comment to a group of others (I was one of them) was “I thought I was pretty good in there, what do you think?” Read into that what you will. (Take a look at the stock market price performance of Alphameric during his tenure, prior to the AMRAC deal).
His ‘leadership’ of the Horsemen will, I believe, end in disaster. This tariff idea is a typically ill-thought-out practical and PR disaster which was driven through without detailed consultation with racecourses, or, more importantly, any consideration for the potential fallout from such a scheme.
It’s already proved a patchwork of back-pedalling and individual interpretation which should be a considerable embarrassment to HG members, let alone racing.
I’m all for mavericks in business; but mavericks almost always need an experieved hand who can lasso their gung-ho, heads-down-and-charge ferocity.
In conclusion, like it or not, bookmakers pay to keep racing alive as we know it – through media rights or Levy. They will not accept a sports betting rights structure. Those owners with horses talented enough to win at the top tracks should celebrate the Horsemen’s policy. The remainder might want to consider mid to long-term arrangements for re-homing or slaughter.
Joe
Every other sport in the country survives without the support of bookmakers (other than through sponsorship) and racing needs to learn to do the same.
I agree that media rights are not the saviour of racing.
Racing in many ways is like a drowning man clinging to a liferaft which is slowly deflating. Too petrified to leave the security of the liferaft (the levy) and strike out for shore, racing’s only solution is to try to blow air back into the liferaft to re-inflate it (running more AW dross to boost the levy). Racing knows that it can’t keep the liferaft inflated indefinitely but clings to the hope that something will come along to save it (media rights etc) before the liferaft finally sinks.
The brave solution is to leave the liferaft and strike out for shore. Racing might perish but there is no hope for survival unless it makes one last effort to save itself.
The link between racing and bookmakers needs to be broken. One solution is to convert to a Pari Mutuel type system. I don’t claim to know what legislative changes will be needed to allow that but I suspect the government will be much more interested in listening to racing on that score once it has offloaded the Tote.
Racecourses as businesses need to develop further income streams just like any other business. Racing purists dislike the after racing pop concerts but they draw in the crowds and the centre of a racecourse would be a perfect venue for some really big concerts.
Speaking of the centre of the racecourse, is there any area of land so underused as the centre of a racecourse? There must be opportunities to put it to good use. Some have golf courses in the middle but many are just left as empty scrub.
Maybe we need to introduce trotting in this country (not my cup of tea but very popular elsewhere in the world)?
Maybe racecourses could set up their own training centres on course (as they do in the US) as a way of generating more income and putting the course to good use on non-racedays?
There is no silver bullet. There’s just hard graft and innovation. Those that embrace that will survive and those that don’t will not.
Tuffers, every other sport in the country doesn’t take place 7 days a week throughout the year.
Other than concerts, there’s little more racing can do utilise the land. Aintree covers 270 acres: it has a golf course, equestrian centre, museum,and a reasonable conference and banqueting business. But I believe that 93% of its income is earned over the GN meeting.
Just 6 miles north of the city centre, Aintree struggles to make much money from its supporting niches, as do a few other ‘City/Town-based’ courses like Musselburgh, Nottingham, Chester, Hamilton, York.
These courses have a huge catchment to draw from and, believe it or not, some decent brains and marketing budgets, yet they still make a relatively paltry amount from non-racing activities. So what chance do the rural courses have?
The trouble with tariffs (apart from the fact that they put huge pressure on the smaller courses) is that the Horsemen’s members will start budgeting for them and once the media rights cash dries up there will be an almighty crash.
I admire your optimism in believing that with hard work and application racecourses will survive without bookmaker-generated income; the reality is that it simply will not happen.
Racing’s only potentially successful strategy is to develop the market – bring in new customers and encourage betting on the sport. In the 1960s there were almost 17,000 betting shops in Britain. The number today is half that – racing has lost 50% of its key product (betting) distribution channel over the years.
The media rights costs it now demands, mean a further narrowing of that channel or driving its product online where levy can be avoided. One of Racing’s main aims should be to make it as cheap and easy as possible to run a UK betting shop, because that’s the only guaranteed place it will get a return.
If racing truly believes bookmakers are raking in cash and paying far too little back, a real radical move would be to set up their own bookmaking division and start opening hundreds of shops.
Now that would be an interesting strategy.
Just 6 miles north of the city centre, Aintree struggles to make much money from its supporting niches, as do a few other ‘City/Town-based’ courses like Musselburgh, Nottingham, Chester, Hamilton, York.
Is this fact or supposition?
My local track York has some function or other going on within the cavernous stands most days and weeks of the year with many weekends seeing ‘public’ events such as Stamp and Coin Fairs, and other specialist retail extravaganzas
Now I’ve no idea what the racecourse makes from these and the numerous smaller events but it must amount to a significant if not large source of income over the course of a year surely?
‘How to win friends and influence people’ round here tends to involve the hiring of a room-with-lunch at York Racecourse
Drone, I haven’t seen York’s accounts but I’d be surprised if their non-racing business contributes much more than 10% to annual profits.
Perhaps someone on the forum can give us a more accurate figure? If not, I will try to find out as a matter of interest.
Tuffers, every other sport in the country doesn’t take place 7 days a week throughout the year.
I don’t see how that makes a difference. It just means racing has more opportunities to generate income from its activities.
Other than concerts, there’s little more racing can do utilise the land.
Well that’s your opinion but I have to disagree with your assessment. The idea that the course interior can be used for no other purpose whatsoever is ludicrous.
These courses have a huge catchment to draw from and, believe it or not, some decent brains and marketing budgets, yet they still make a relatively paltry amount from non-racing activities. So what chance do the rural courses have?
I think the fact that they make so little from non racing activities shows that the brains aren’t good enough.
The trouble with tariffs (apart from the fact that they put huge pressure on the smaller courses) is that the Horsemen’s members will start budgeting for them and once the media rights cash dries up there will be an almighty crash.
The trouble with not having tariffs is that you will end up with lots of races and no horses to run in them.
I admire your optimism in believing that with hard work and application racecourses will survive without bookmaker-generated income; the reality is that it simply will not happen.
Your opinion rather than fact of course. I disagree fundamentally with your opinion based as it is on the belief that income from bookmakers is the only way racing can survive.
Racing’s only potentially successful strategy is to develop the market – bring in new customers and encourage betting on the sport. In the 1960s there were almost 17,000 betting shops in Britain. The number today is half that – racing has lost 50% of its key product (betting) distribution channel over the years.
I agree that the market needs to be developed but I don’t see how the number of betting shops is relevant when some of the strategies open to racing include managing on course betting by the racecourses themselves.
The media rights costs it now demands, mean a further narrowing of that channel or driving its product online where levy can be avoided. One of Racing’s main aims should be to make it as cheap and easy as possible to run a UK betting shop, because that’s the only guaranteed place it will get a return.
I completely disagree. As I’ve said before, any strategy based on reliance on income from bookmakers is doomed to fail.
If racing truly believes bookmakers are raking in cash and paying far too little back, a real radical move would be to set up their own bookmaking division and start opening hundreds of shops.
Now that would be an interesting strategy.
Not necessary. On course betting should be the priority followed by the establishment of a nationwide pool betting operation. The failure to secure ownership of the Tote by a racing industry body is an absolute travesty but that shouldn’t stop racing attempting to run its own Pari Mutuel style operation.
Tuffers, every other sport in the country doesn’t take place 7 days a week throughout the year.
I don’t see how that makes a difference. It just means racing has more opportunities to generate income from its activities.
People free to go racing Monday to Friday tend not to have much disposable income
Other than concerts, there’s little more racing can do utilise the land.
Well that’s your opinion but I have to disagree with your assessment. The idea that the course interior can be used for no other purpose whatsoever is ludicrous.
Fair point – I should have said profitably to utilise the land
These courses have a huge catchment to draw from and, believe it or not, some decent brains and marketing budgets, yet they still make a relatively paltry amount from non-racing activities. So what chance do the rural courses have?
I think the fact that they make so little from non racing activities shows that the brains aren’t good enough.
Well almost all of them offer conference/banqueting/weddings/exhibitions: a few have golf courses, some have caravan sites. What would you add to the mix?
The trouble with tariffs (apart from the fact that they put huge pressure on the smaller courses) is that the Horsemen’s members will start budgeting for them and once the media rights cash dries up there will be an almighty crash.
The trouble with not having tariffs is that you will end up with lots of races and no horses to run in them.
And the trouble with having tariffs is that you will end up with lots of horses and no races to run them in
I admire your optimism in believing that with hard work and application racecourses will survive without bookmaker-generated income; the reality is that it simply will not happen.
Your opinion rather than fact of course. I disagree fundamentally with your opinion based as it is on the belief that income from bookmakers is the only way racing can survive.
It is my opinion but there is plenty of evidence to support it: racing might survive without it but not in its current structure
Racing’s only potentially successful strategy is to develop the market – bring in new customers and encourage betting on the sport. In the 1960s there were almost 17,000 betting shops in Britain. The number today is half that – racing has lost 50% of its key product (betting) distribution channel over the years.
I agree that the market needs to be developed but I don’t see how the number of betting shops is relevant when some of the strategies open to racing include managing on course betting by the racecourses themselves.
On course betting is a tiny fraction of off-course and, bar the festivals,insignificant in comparison. If 20,000 betting shops were open selling racing’s betting product to customers, surely that makes more commercial sense than having 10,000 open?
The media rights costs it now demands, mean a further narrowing of that channel or driving its product online where levy can be avoided. One of Racing’s main aims should be to make it as cheap and easy as possible to run a UK betting shop, because that’s the only guaranteed place it will get a return.
I completely disagree. As I’ve said before, any strategy based on reliance on income from bookmakers is doomed to fail.
How then do you explain your enthusiasm for the tariffs strategy? The money ‘raised’ by tariffs comes mainly from bookmakers’ media rights payments
If racing truly believes bookmakers are raking in cash and paying far too little back, a real radical move would be to set up their own bookmaking division and start opening hundreds of shops.
Now that would be an interesting strategy.
Not necessary. On course betting should be the priority followed by the establishment of a nationwide pool betting operation. The failure to secure ownership of the Tote by a racing industry body is an absolute travesty but that shouldn’t stop racing attempting to run its own Pari Mutuel style operation.
Racing already has its on-course and nationwide pool betting operation, and has had for decades – the Tote. Pool betting in its current format holds little appeal for UK punters compared with fixed odds. How will it suddenly transform the fortunes of racing if run ‘directly’ by racing?
People free to go racing Monday to Friday tend not to have much disposable income
As opposed to people free to go into betting shops from Monday to Friday?
Fair point – I should have said profitably to utilise the land
A racecourse should be (to use an awful but apposite modern phrase) a ‘destination’. There should always be something going on there. Other sports and activities should have clubs based at the track using its bars and other facilities 7 days a week.
The actual use of the inside of the track in and of itself may not be massively profitable but once the punters are there they should be spending money on food and drink.
Well almost all of them offer conference/banqueting/weddings/exhibitions: a few have golf courses, some have caravan sites. What would you add to the mix?
Drive-in movies, paintballing, motorcross/bmx track, team-building exercises eg high-wire courses, clay pigeon shooting, shooting ranges, driving ranges, horse training centres, polo grounds (Chester already thought of that one), sports pitches generally (football, rugby, cricket, hockey), athletics track, cycle track, private airfield and that’s just five minutes thinking about it. No doubt there are many other possibilities I haven’t thought of.
And the trouble with having tariffs is that you will end up with lots of horses and no races to run them in
The horse population is already in decline. I can see no evidence for an increase in the horse population in the current environment. In fact, all the evidence points towards it falling further. Courses that don’t offer tariff levels of prizemoney will fail not because they are being ‘boycotted’ but because given a choice, of course owners will choose the courses offering the best return.
It is my opinion but there is plenty of evidence to support it: racing might survive without it but not in its current structure
Well I certainly wouldn’t disagree that racing can’t survive with its current structure.
On course betting is a tiny fraction of off-course and, bar the festivals,insignificant in comparison. If 20,000 betting shops were open selling racing’s betting product to customers, surely that makes more commercial sense than having 10,000 open?
But to whom are betting shops selling the product? People who spend their weekdays in betting shops. Is that really racing’s target audience?
How then do you explain your enthusiasm for the tariffs strategy? The money ‘raised’ by tariffs comes mainly from bookmakers’ media rights payments
Well currently, of course, it comes from racecourses current income streams. That doesn’t mean that those income streams cannot change.
Racing already has its on-course and nationwide pool betting operation, and has had for decades – the Tote. Pool betting in its current format holds little appeal for UK punters compared with fixed odds. How will it suddenly transform the fortunes of racing if run ‘directly’ by racing
Excluding on-course fixed odds betting; reducing the take to make it more attractive for serious gamblers; pool betting ‘lottery’ tickets (buy one in the newsagent for the day’s televised races).
The Tote has been appallingly run for decades so I don’t see its failure to capture the public’s imagination as a failure of the product per se.
Steeps you claim;
47% of the Betting Industy’s profit last year came from FOTBs
Have you got a source for this, please.
Also when you say
Racing’s share of Betting has fallen from the days of Extel (circa 20-25 years ago) from 80% to 50%
What are the total figures (size of total betting market say 1985 and 2011) you are taking those %’s from?
The comprehensive list of courses which have increased prizemoney this month so far is now:
Thirsk
Wolverhampton
Folkestone
Southwell
Beverley
Newbury
Haydock
Doncaster
Leicester
Windsor
Bath
Sandown
Musselburgh
Warwick
Lingfield
Newmarket
FontwellAdd to that list, Ffos Las which has added a grand to a race on the 25th.
Southwell has added a total of £1,750 spread over three races on the 28th.
The comprehensive list of courses which have increased prizemoney this month so far is now:
Thirsk
Wolverhampton
Folkestone
Southwell
Beverley
Newbury
Haydock
Doncaster
Leicester
Windsor
Bath
Sandown
Musselburgh
Warwick
Lingfield
Newmarket
FontwellAdd to that list, Ffos Las which has added a grand to a race on the 25th.
Southwell has added a total of £1,750 spread over three races on the 28th.
Good to see Southwell adding prize money – IIRC they contributed less than £1,000 outside of the levy board payments ot prize money in 2010
Steeps you claim;
47% of the Betting Industy’s profit last year came from FOTBs
Have you got a source for this, please.
I think it was in the January or February edition of Betting Business, the monthly industry mag. – And I should, of course have said FOBT and not FOTB
Also when you say
Racing’s share of Betting has fallen from the days of Extel (circa 20-25 years ago) from 80% to 50%
What are the total figures (size of total betting market say 1985 and 2011) you are taking those %’s from?
I don’t know offhand (it was above 80% and is now below 50%) – I could find out with some research but it wouldn’t alter the point of the market-share loss. No matter how much the market has grown, a progressive loss of share will kill your business in the end.
Tuffers, I’ve enjoyed the debate and, for my part, will agree to disagree.
The proof of the pudding will eventually out,and,if we are still around, we shall see.
Good luck
Joe
Tuffers, I’ve enjoyed the debate and, for my part, will agree to disagree.
The proof of the pudding will eventually out,and,if we are still around, we shall see.
Good luck
Joe
No problem. I appreciate there are strong arguments on both sides. Sadly, racing is so divided between its various vested interests that achieving a consensus on the way forward will be impossible. Even if you disagree with the particular approach of the Horsemen’s Group, I think it is probably common ground that only unilateral action by the various groups will actually precipitate change. It may be change for the worse, of course, but that old cliche "if you keep doing what you’ve always done, you’ll keep getting what you’ve always got" is one that the industry as a whole should ponder.
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