Horseracing Industry

Lord Risby Excerpts

Thursday 17th November 2022 Grand Committee

Asked by

[Lord Risby]

To ask His Majesty’s Government what plans they have to support the horse racing industry in the United Kingdom.

[Lord Risby (Con)]

My Lords, I welcome the opportunity to introduce this timely debate. First, I must declare that I have for some years been a government-appointed director of the Horserace Betting Levy Board, the body that collects the levy from betting operators on their profits from horserace betting and distributes it to the sport and its wider grass roots. It has seen its reputation grow because it has been skilfully chaired and managed by a most effective executive team.

The levy board operates at arm’s length from government. This allows it to respond flexibly to the demands of horseracing while having direct bookmaker representation on the board. Maintaining this independence and responsiveness is crucial. The levy board contributes some £19 million to the sport’s regulation per year, about 80% of the total, and around £2 million a year to equine veterinary research and education. Additionally, the Great British Bonus is 66% funded by the levy board and serves to encourage, with considerable success, the breeding and ownership of British-bred fillies, and in addition to this there is a commitment to give £66 million next year to prize money.

As a Member of Parliament for 18 years, I represented the town of Newmarket, the world’s leading racing and breeding centre. Today’s debate provides an opportunity for us to discuss how we can take this great British success story forward, and how the racing industry and government can support each another in their policy priorities.

I unreservedly applaud the considerable support which the Government provided during the Covid-19 pandemic. The shutdown of racing for 11 weeks and the subsequent continuation of racing behind closed doors for a year put considerable financial strain on the industry, with more than £400 million in lost revenues. Racing and government worked closely on protocols for safe resumption, then the Government supported racing with a critical £21.5 million loan to the levy board through the sports winter survival package and, indeed, £28 million in cash flow and hardship funding. This helped to continue funding critical prize money, the very lifeblood of the racing industry, and other important initiatives, including training and education, integrity and horse welfare.

Horseracing is the second biggest sport in the UK by several measures, second only to football. More than 5 million people attend some 1,400 fixtures annually across our 59 racecourses. Four of the top 10 highest-attended sports events held annually in the UK are major horseracing festivals. It is the most broadcast sport on free-to-air television in the UK through the excellent coverage provided by ITV Racing. Racing provides a substantial contribution to the UK economy. It generates more than £4.1 billion of economic activity, raising more than £300 million in taxation annually for the Exchequer.

The industry provides some 80,000 jobs directly or indirectly and sits at the heart of many rural communities. The Racing Together programme highlights that more than 130 organisations utilise horseracing to support fundraising, well-being and training in local communities, with more than 1,500 hours donated by the racing industry to support charitable causes annually.

British racing also demonstrates international leadership on a range of issues, including integrity monitoring to intercept, disrupt and prosecute corrupt activity, working closely with international counterparts; significant efforts to advance diversity in the industry; and equine welfare initiatives further to raise standards across the lifetime of the racehorse through the independently chaired Horse Welfare Board’s A Life Well Lived strategy. The industry has also proudly supported over £40 million in veterinary research and education funding since 2000.

Yet, I firmly believe that this is an asset which the Government can do so much more to cultivate—a source of continuing frustration. I urge the Government to go further than they have in harnessing horseracing as an asset for their diplomatic and trading objectives. Furthermore, they should capitalise on thoroughbred horseracing and breeding’s role as a rural employer as part of their levelling-up agenda. I know that this is something that the British Horseracing Authority and all in British racing are keen to support them on.

However, if British racing is to really survive it needs to maintain its position at the international pinnacle. I am afraid it is clear that this is coming under remorselessly increasing pressure. Owing to a range of factors, British racing faces gaping challenges in achieving competitive levels of prize money. Quite simply, prize money acts as the lifeblood of the industry. It not only helps to sustain owners’ critical investment in the industry but supports many hundreds of training businesses and the livelihoods of thousands.

On the measure of prize money per race, British racing is well behind other major competitor jurisdictions, including Ireland, France, Australia, the United States, Hong Kong and Japan. These competitor jurisdictions continue to really drive up prize money increases, offering significant incentives for British owners to relocate abroad. Such financial pressures, compounded by additional complexities around thoroughbred movement following Brexit, are starting to have an active impact on owner and high net worth investor decisions to invest in British racing. The decisions of only a few significant owners to relocate to other jurisdictions would permanently damage Britain’s racing leadership position. Although there was record turnover at the key Tattersalls October sales this year, there is increasing evidence that a growing proportion of the top lots are leaving the UK. This exodus of equine talent, driven by international funding disparities, sees British racing starting to fall in this global race.

I am pleased to say that the industry is trying to respond to these challenges. I am delighted that British racing leaders agreed on a new governance structure this week for the sport to deliver unity and focused strategic direction. The racing industry needs the Government to step up as a partner to realise its potential, as has happened in other jurisdictions.

I highlight the forthcoming gambling review White Paper, although it has been repeatedly delayed, as critical. Indeed, it is vital that gambling regulation protects people from experiencing gambling-related harm, yet it is also key that it recognises the unique relationship between racing and betting. Any blanket, disproportionate measures could have profound consequences for British racing. I therefore hope we will see a balanced White Paper in the coming weeks.

I also reference that the Government are required by statute to review the rate of the horserace betting levy, which is currently set at 10% of betting operators’ gross profit on British racing, by no later than 2024. It encapsulates the symbiotic relationship between the two industries. It would not be appropriate for me to comment further on this given my position at the levy board, but I know that this is a point on which the racing industry has made repeated representations, including for a levy based fully or in part on a percentage of turnover rather than profits. However, it is hugely valued that bookmakers contribute some 45% of racing income.

Continuing efforts are being led to reduce complexities around thoroughbred movement post Brexit. I would be interested in hearing from my noble friend the progress of these discussions between the industry and our Government, and whether the future imports system can recognise our high standards of animal health. I therefore conclude by urging the Government, across their various departments, to engage proactively with similar vigour as demonstrated in the Covid-19 pandemic to grasp the many opportunities which exist and set up British racing to thrive through the 21st century.