Horse Racing

Scott Benton Excerpts

Thursday 23rd September 2021 Commons Chamber

[Matt Hancock]

I certainly do not want to see another lockdown, and I know that the right hon. Gentleman does not, because he was unenthusiastic about the ones that we had in the past. I do not want to get into the vaccine passport issue, but I agree strongly with what he said at the start, which is that we must tackle problem gambling. I bow to no one in my desire to tackle problem gambling, which I addressed when I was in the Department for Digital, Culture, Media and Sport. At the same time, however, many people enjoy a flutter, and a day at the races is an enjoyable experience that is enhanced for many people by gambling in a completely responsible and controlled way. The symbiosis between horse racing and gambling is important, and I would argue that gambling—especially gambling in person at a racecourse—is a much safer proposition than some of the modern electronic and online offers.

I want to come back to the point about the risk, because we are at a moment of peril—

[Scott Benton (Blackpool South) (Con)]

I thank my right hon. Friend for allowing me to intervene, and I draw the attention of the House to my entry in the Register of Members’ Financial Interests. He will be aware of the recent increase in the number of drone pilots that have been spotted at horse race meetings. This practice creates opportunities to bet via the black market during live races. Indeed, recent reports have suggested that the amount betted online via the black market has doubled in recent years to £2.6 billion. This is a practice that the horse racing authorities are working to address. Will my right hon. Friend urge the Government to assist them in trying to stamp out the use of drones at horse race meetings?

[Matt Hancock]

Yes I will, and I can see the Ministers discussing exactly that question right now on the Front Bench. This is another issue that needs to be resolved. It is another loophole in how the sport operates.

Races are put on to allow people to bet on them—they are not only put on for that reason, but it is one of them—and it is therefore important that some of the funding should come back from the gambling to the racing, without which we could not have the gambling in the first place. It is a symbiotic relationship, and that is why there is a place for the Government in ensuring that it is all arranged properly. The problem at the moment is that while gambling revenues have increased during the pandemic, particularly from online gambling, the amount that is going into horse-racing is not sustainable. The risk is that horse racing will increasingly move overseas and that we will lose all these great benefits. That is why we must act.

This is not just about the statistics. This is real. The decisions of only a few significant investors to relocate their investment to other jurisdictions would significantly and permanently damage British racing’s leadership position. We have seen countries around the world, including Ireland, France and Australia, stepping up to back their racing industries more, and if we do not follow suit we will be overtaken as the home of racing. We must not let this happen. Just recently, Shadwell, a major multi-million pound racing and breeding operation, announced that it would be undertaking a review of its activities, with operations in the UK, Ireland and the USA to contract. The extent of any contraction in the UK would have serious implications for jobs, for the economy and, I believe, for our place in the world. This is not just about statistics. It is real. There is an urgency for action, and I know the new Minister is a man of action and ready to act.

In this country, we are in the fortunate position that our recovery is the strongest in the G7. I come not to ask for public funds—although I do not rule that out for the future—but to ask for policy, to ensure that racing gets its fair share from the industries it supports, notably through fixing loopholes in the horse race betting levy. So the Government have a decision to make: step up, save the horse racing industry and reap the rewards of prosperity, jobs, prestige and trade, or step back and lock the stable door after the horse has bolted. Racing is of course part-funded by the levy, which represents the value of horse racing to the gambling industry. The levy provides for the infrastructure of racing and, in part, for the prize money that attracts investors who are crucial to the sport. We must ensure that the levy meets the costs of the racing industry in providing a competitive, compelling betting product from which the bookies benefit. It is failing to do that now. At the time of the last review in 2017, the Department for Digital, Culture, Media and Sport confirmed that the levy would be reviewed by 2024, but earlier if necessary, in order to be

“responsive to future changes in the market”

and to ensure that the yield is meeting the levy’s statutory purposes.

It is clear that the levy’s yield has never met the level of costs envisaged in 2017. There will be an estimated £160 million shortfall in industry revenues between now and 2024. Given the pandemic, an early review is required to ensure the levy is providing an appropriate return both to meet its statutory objectives and to support an internationally competitive British racing industry.

Two changes are needed, and this is what I am asking for. First, the levy should be based on a percentage of turnover, not a percentage of profit. This would result in less volatile yields and remove unhealthy perverse incentives in the sport.

Secondly, and most urgently, the levy should apply to all horse racing globally that is bet on by British customers. Betting customers in Britain can safely enjoy and benefit from horse racing in a wide variety of countries, and British participants often compete in these international events, driving interest and UK betting turnover. However, British racing does not receive a return from betting activity on these races.

An extension of the levy to cover racing overseas would see the levy apply to all thoroughbred races held worldwide, rather than solely races run in Great Britain. This is how it works elsewhere, such as in France and Ireland. This second reform can be quickly and easily enacted and would generate around £20 million annually for British racing. Closing this overseas levy loophole is fair, right, good economics and based on historical and international precedent.

I close by inviting the Under-Secretaries of State for Digital, Culture, Media and Sport, my hon. Friends the Members for Croydon South (Chris Philp) and for Mid Worcestershire (Nigel Huddleston), to Newmarket to see racing in action, from behind the scenes and from the grandstand, so they can see for themselves the huge value of this remarkable sport. I invite them to meet the British Horseracing Authority so that we can work together on the detailed evidence and proposals that have been developed.

I pay tribute to the Government for their support for racing throughout the pandemic. I know the Minister has heard this heartfelt plea on behalf of a sport that so many love, and I will not be letting this drop, so I look forward very much to working with him to ensure British racing can thrive in the years ahead.