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Every now and again, forum heavyweights describe the Levy as an anachronism which should be dismantled and an alternative source of funding sought.
Yet BHA head honchoes like Paul Roy and Nic Coward show no sign of seeking an alternative funding model despite the industry and it’s funders being further apart than ever before.
If you were given the opportunity to present to the BHA an alternative funding model which increases prize money and protects core costs (admin, salaries, breeding, training and security), what would you present?
I’ve come up with a couple of workable ideas but I’m interested in the thoughts of other members.
Cheers, Max.
Ok I’m banging on a bit now…
Tote Exchange with a 5% win takeout – An alternative to the scourge of laying of racehorses with fair percentages for punters.
Two national lottery type scratch card 16 runner narrow band handicaps televised on Saturday afternoons – 2 quid a ticket, you scratch the first 5 home you win bigtime. Prizes for matching 4-3-2-1. Imagine the thrill for the housewives and the massive untapped market racing could gain access to with this.
A levy on the breeding industry. A percentage of a stallions annual income returned to the sport which enables these breeding empires to generate hundreds of millions of pounds over a successful sire’s breeding career. How much of the 10 miilion quid Sea The Stars has already earned in fees will go back to Newmarket, Sandown, York or Epsom?
Legally binding contracts between the ROA and racecourses ensuring a fair percentage of media money goes directly to prizemoney.
I was going to start a topic yesterday after reading Paul Roy’s comments in the RP. Some of his guff I found absolutely astonishing.
The usual suspects were identified as being the root of racing’s problems: punters and bookmakers. I’m absolutely sick and tired of this. As a punter I know I’m not supposed to stick up for bookmakers but I’ve yet to hear a cogent response to the following question:
Why should bookmakers pay more money to racing?
If there’s less money to go round….then, well, there’s less money to go round. So instead of accepting that prize-money will fall or the fixture list will be reduced what we’ll do is attack punters and bookmakers. Yes, that makes perfect sense. After all, we can’t ask owners to put more money into the game can we? Nooooooooooo, that just wouldn’t be how we do things dear boy.
A levy on the breeding industry. A percentage of a stallions annual income returned to the sport which enables these breeding empires to generate hundreds of millions of pounds over a successful sire’s breeding career. How much of the 10 miilion quid Sea The Stars has already earned in fees will go back to Newmarket, Sandown, York or Epsom?
A very interesting point, especially how much must also be made by the sales companies on each purchase.
This is a more general thing do the BHA actually care in any-way for the British breeding industry? I don’t want any extra horses produced, but I sit and watch Racing at Woodbine and they have a stack of restricted races for Ontario and Canadian breds. And we fortunately have none and just enable whoever, whenever to swoop and take all the money.
I think the Levy shouldn’t fund any prize money, it should subsidise training fees on a sliding scale depending on how the horse ran over a season, how much the owner paid out in training fees etc etc.
I’m not saying it’s a good idea, it’s just a thought I had.
Incidentally, Haydock Park was sold out Saturday last for it’s racing/Simply Red event. I wonder how much of that went towards race prize money & how much went to the ginger crooner. In fact I don’t wonder, I’m pretty sure I know.
Wouldn’t disagree about the tote playing a bigger part etc but as well as that, why don’t the entries for each race go up dramatically and go directly to the prize money? I think the ancients referred to it as ‘stakes’ racing.
At the moment there’s a serious lack of incentive for jockeys in particular, with most of their official earnings coming from flat fees in most races.
If you’re paying thousands of pounds a month to keep a horse in training why are you only throwing a handful of loose change into the pot every time it races? It beggars belief.
Wouldn’t disagree about the tote playing a bigger part etc but as well as that, why don’t the entries for each race go up dramatically and go directly to the prize money? I think the ancients referred to it as ‘stakes’ racing.
At the moment there’s a serious lack of incentive for jockeys in particular, with most of their official earnings coming from flat fees in most races.
If you’re paying thousands of pounds a month to keep a horse in training why are you only throwing a handful of loose change into the pot every time it races? It beggars belief.
Another good point. What does it cost to enter a horse in Class 5 (for example) these days?
Cav, I noted the weariness at the beginning of your excellent post, but I have seen plenty of other long term TRF members call for a scrapping of the Levy without offering an alternative – I’d like to see the ideas. We’ve got a whole week till Glorious Goodwood and some fairly tepid stuff on offer.
If we can come up with some decent alternatives as a group, I thought we could send them to Paul Roy, take some direct action.
This is probably the most important question in racing, one which would require considerable research and consultation to answer, if it can be answered at all.
And at the end of that process there is no evidence that anyone in authority would listen to what you had to say, or that you would be recognised for your contribution if they did.
As a result, my stance is that the Levy is not working but I do not know what it should be replaced with. There are people on committees being paid to come up with something more constructive. Sorry.
A properly run Tote would be a help. The current mechanism for the Tote to pay money to racing is opaque to say the least. Something more directly related to turnover ought to be possible.
For example, the Placepot pool was over £70k at Ffos Llas this afternoon and over £80k at Yarmouth. Where does the profit from that all go? Why not take 6% of the pool (1% for each race involved in the bet) and add it directly to the prize money for that race. That would be an additional £9,000 just in one afternoon.
It would require the current supine management to get tough with the bookies that have Tote Direct terminals, maybe cutting their commission from 20% to 15%, but there’s no way the big chains would throw out the terminals, as even at 15% it’s money for old rope.
This simple proposal alone could produce an extra £5M per annum in prize money.
AP
The Tote is a slumbering giant that hasn’t been utilised to maximum advantage since the legalising of off-course bookmaking sent it to sleep. Those in charge have seemed content to let it play second fiddle to the bookmaking leviathan for these past 50 years
Long been an advocate for a Tote Exchange with a flat commission rate that undercuts the base-rate on the existing exchanges, say 3%; I’d move all my betting there without batting an eyelid
Whether this would bolster racing’s parlous finances I wouldn’t know
Fact is that racing wouldn’t have mushroomed to its current volume had the bookmaking levy not been available. Any business whose growth is dependent on one income source leaves itself terribly vulnerable should that source diminish; and an annual fixture list of 5000+ races a year that is almost wholly dependent on the once mighty income stream from the levy will in all likelihood be unable to find another source of income to adequately replace it.
So I too have no idea how racing can continue in its current obese guise in the face of declining levy
It probably can’t and and it probably shouldn’t
We are having to ‘downsize’ so ‘we will have to let you go’ in euphemistic business-speak
In racing terms: cut the fixture list, reduce the horse population, dish out the P45s and then consider how the new slimline race programme should be financed
happy ever after
Should there even be a levy at all – in any form?
Those in charge of racing seem to drone on about "the bookmakers don’t pay enough back to Racing." They don’t seem to like the principle of bookmakers having the control they have within the sport. But as soon as it matters it’s grovelling time – "we need the money, we must have the money." That is how it works.
There shouldn’t be a levy for the betting industry to pay back money into racing. Racing, or the BHA, seem to live in a fantasy world. Symbiotic relationship is how they to refer racing’s relationship with betting. I wonder what football has then? What did FIFA get for the World Cup out of bookmakers profits? Did they get their 10%? I know the answer to that and so does everyone else. And until every sport receives it’s 10%, racing is no different. All or nothing in my world. Every sport gets it’s 10% or no sport gets it.
http://www.hblb.org.uk/documents/news/R … 202010.pdf
I would give them nothing based on that alone. All sorts of confused and demented arguments taking no real responsibility for the errors "they" have made in the sport.
Owners costs rise so the betting industry has to cover it because their profits are up?
The betting industry needs a healthy racing industry but we must stop them making money out of FOBT’s, because that might damage the healthy racing industry they need.
This quote really got me – Page 7
We have already highlighted the £150m increase in net owners’ expenditure on training costs since 2002. The expansion of the fixture list has been an important factor. However, for this methodology we have only considered the most direct cost, namely transport costs, incurred by owners to bring their horses to these additional fixtures.
Totally crazy.
What are the alternatives to the levy? Racing being more self-sufficient and funding itself via the money making model it should have been using called the Tote. Plus media rights and sponsorship being maximised. If racing can’t fund itself out of those areas, does it really have an industry worth saving? Corporate bookmakers can survive without racing – is it not time racing showed it can survive without corporate bookmakers?
Bang on the money, Jose.
We have a big handouts culture in this country, and racing has spent far too long relying on, and expecting to receive, gifts and cross-subsidies from other people and businesses.
Thanks for the responses, chaps. Excellent stuff.
Personally, I’m a big fan of the Tote Monopoly/BHA Exchange idea but how realistic are either of the ideas?
Figures suggest that one of the three online betting exchanges (with all the software in place),is cherry ripe for a buyout by some of the rich panjandrums at the BHA, with its City-based owners, and connections to prosperous racing sponsors. Yet nothing happens except more interminable levy talk.
If I was one of those nutters who harass celebrities, I’d be on the phone to Paul Roy every day. "Buy XXX betting exchange as a job lot, Mr Roy, and create a non-profit making foundation for horse racing in which we can all share. Have terminals in Totesport offices and on the racecourse. You KNOW it makes sense."
Pru, I see your point, but I can’t stand to see Chandler, Topping and all the other Pharisees in the Temple laughing at the sport’s expense anymore – and for the majority of us, TRF is our only voice.
I wasn’t asked my opinion by R4C and as such, I’m more of a Weed than a Bill or Ben and that’s frustrating.
The figures don’t make sense to any rational being.
£12.9 billion bet on horses last year. This week saw £800,000 turned over on a crappy Yarmouth maiden on a dismal Tuesday worth just over £2,500 to winning connections – and that’s from just ONE outlet.
No racing infrastructure in the world has that imbalance between financial activity surrounding the event and reward for the participants. It gets more bizarre – and embarrassing – by the day.
This is a country where the population’s gambling instinct is amongst the keenest in the world.
Even socially, the sport is very much in the consciousness of the people. Did you see that RUK/Turf TV panoramic shot at Chester from the top bend two weeks ago? I was dumbstruck. Awesome, as the kids say. I’ve never seen so many people in one place. They’d attract 80,000 every summer Saturday if it was bigger.
This isn’t a dead sport – its not even dying. Somehow, we’ve got to get that point across to the powers.
(I’ve got a practical idea which works with bookmakers, online bookmakers and private sector exchanges, but I’m still working on it. It’ll be on Sunday (ish).Cheers)
£12.9 billion bet on horses last year. This week saw £800,000 turned over on a crappy Yarmouth maiden on a dismal Tuesday worth just over £2,500 to winning connections – and that’s from just ONE outlet.
No racing infrastructure in the world has that imbalance between financial activity surrounding the event and reward for the participants. It gets more bizarre – and embarrassing – by the day
Shameful, when you think about. No leadership, no unity, no new ideas, no big picture, no plan, no customer focus or awareness.
And such potential…
Slightly ironic that the original justification for the Levy was to compensate the courses for the drop in attendances that was expected after shops were legalised in 1961.
As someone that has been going racing since the early 60’s, I can confirm that the numbers have been on the rise, especially at the big meetings. If the Levy had been restricted to that purpose alone, it could have been abandoned in the mid 80’s.
But like so many tax revenues, the way the money is used has been allowed to spread to things that were never intended by the legislators – think Lottery, Road Fund, National Insurance etc.
Over the years the courses have passed the costs of stalls, cameras, security, and building works (interest free loans) onto the Levy. Head office has expanded like bindweed, with millions now spent on ‘integrity’, keeping legions of ex coppers in comfort in their old age. The Levy has even been plundered to make up the deficit in the pension funds at the BHA (and it’s predecessors).
It’s those costs that make the Levy hard to replace. It might be possible to cover the prize money element by other means – media rights, Tote, sponsorship, bigger entry fees – but nobody wants to sponsor the integrity services at an annual cost of £25M!
How did we get to a state where 25% of the Levy (a percentage that seems sure to rise again this year) is spent on a department that, on the evidence presented on TRF, is a total failure.
AP
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