On 17 November 2022, the House of Lords is scheduled to debate the following topical question for short debate:

Lord Risby (Conservative) to ask His Majesty’s Government what plans they have to support the horseracing industry in the United Kingdom.

1. Background

In written evidence to the House of Commons Digital, Culture, Media and Sport Committee in 2020, the British Horseracing Authority (BHA) set out figures on the size of the horseracing industry and its contribution to the economy. The BHA is the regulatory authority for horse racing in the UK. It claimed:

British racing is the UK’s second largest sport behind football in respect of attendances, employment and revenues generated annually. In 2019, 5.62 million people attended over 1,500 individual race meetings held across England, Scotland and Wales. Our largest events are not only highlights in the increasingly competitive international racing calendar, but also the UK sporting and social calendar. British racing’s cultural significance is demonstrated by the fact that ours is the only sport which has two annual nationwide events—the Grand National and The Derby—included on the group A list of full live coverage protected events for free to air broadcast. The sport’s popularity has also once again been recently demonstrated with ITV Racing’s coverage of the 2,000 Guineas at Newmarket on 6 June attracting an audience of 1.5 million viewers.

This translates into a significant economic benefit for the UK, with our industry generating £4.1 billion in direct, indirect and associated expenditure annually for the British economy. Much of this is focused in rural areas with over 20,000 people directly employed across our 59 licensed racecourses, hundreds of training yards and thousands of breeding operations—all of which play a key role in the life of the many hundreds of rural communities they operate in.

However, the BHA said that the Covid-19 pandemic had caused financial loss for the industry, estimating lost revenues for racecourses, trainers, breeders and jockeys in excess of £100mn. It also estimated future impacts from the pandemic, including reduced prize money and a general contraction in the industry and in the sale of horses.

The BHA’s latest statistics indicated that average fixture attendance had reduced from around 3,900 in 2019 to around 1,800 in 2021. The statistics also showed a reduction in average prize money, with this reducing from around £15,700 in 2019 to around £14,100 in 2021.

Although racing in 2021 may have been affected by the pandemic, the issues of falling attendances and the levels of prize money have been raised for some time. For example, the Racing Post noted back in 2020 that attendances had been reducing since 2015. It also reported on the issue of prize money, stating that it compared unfavourably with other countries and that this may impact UK horse racing’s competitiveness. Indeed, there have been reports of some British trainers targeting other markets, such as Saudi Arabia, due to the higher prizes on offer.

In addition, concerns have been raised about the possible impact any gambling reforms may have on the sector. The government committed to reform gambling legislation in December 2020, with proposals expected to be outlined in a white paper. These could include affordability checks, stake limits, more regulation of gambling advertising and a levy to pay for the prevention and treatment of gambling-related harm. However, the proposals have yet to be published.

There have also been reports of Brexit impacting the movement or export of horses. However, in August 2022, the Thoroughbred Industries Brexit Steering Group explained that a change was being made to customs arrangements to simplify the movement of horses into Britain for racing and breeding.

2. Support and funding for the industry

In November 2021, Chris Philp, then minister for tech and the digital economy, set out how the industry had accessed government support given in response to the problems caused by the pandemic:

I am pleased to tell the House that racecourses are accessing £21 million from the sport survival package. They have also had £28 million in cash-flow and hardship funding, in addition to which the Horserace Betting Levy Board provided £97 million in 2019/20 to support the sport.

The Horserace Betting Levy Board (HBLB) provides money to the industry obtained through a statutory levy on horseracing betting income. It was set up by the Betting Levy Act 1961 and carries out its duties under the Betting, Gaming and Lotteries Act 1963.

Under this legislation, it applies its funds to “one or more” of the following areas:

  • the improvement of horseracing
  • the improvement of breeds of horses
  • the advancement or encouragement of veterinary science or veterinary education

It states that “usually around 90% of levy income is applied to the improvement of horseracing each year, although this is at the board’s discretion”. It explained that most of this money went into prize money and towards raceday costs, but that some does get used on other areas of racing, such as industry recruitment and horse welfare:

This expenditure is directed principally to prize money, with other payments made directly to racecourses as a contribution towards raceday services costs, such as for regulation and integrity.

In addition, HBLB makes a significant contribution to non-fixture related areas, in 2022 likely to total circa £7-8mn. This includes the industry recruitment, training and retention strategy, betting industry partnership, retraining of racehorses, Point to Pointing, Racing to School and the Horse Welfare Board.

The HBLB’s latest annual report shows that levy income was down in the 2020/21 financial year, reducing from £98mn to £82mn. However, the HBLB put the fall down to the impact of the coronavirus pandemic on that year’s racing, and estimated the levy yield at £97mn for the 2021/22 financial year.

Some have called for further reforms to the levy, arguing that it is not achieving the amounts expected. For example, there have been proposals to extend it to cover bets on international racing and virtual racing. However, the levy is not currently due to be reviewed until 2024. The levy was last reviewed, and adjusted, in 2017, when it was extended to cover overseas bookmakers, when offering bets on racing in Great Britain, and when a fixed rate of 10% was set on the profits of leviable operator bets. Further information can be found in the House of Commons Library briefing on the levy.

Calls to reform or review the levy were also debated in the House of Commons on 23 September 2021. The then minister, Chris Philp, stressed that the government was open to all evidence on reforms of the levy, or the need to review it earlier than 2024. However, Mr Philp did believe that extending it to bets on international races went beyond its “originally constructed purpose”. Its initial purpose was to protect the sport from loss of profit when placing bets on racing offsite (for example, betting at an external bookmakers rather than at the racecourse) was first allowed.

Regarding potential gambling reforms, Chris Philp stated in February 2022 that the government has been having “extensive conversations” with the racing industry and would fully consider their impact. He stated:

I assure him that proper impact assessments will be done. We know that horse-racing is a vital sport for the people who work in the industry. It supports many jobs, it provides leisure activities for many people, and it is a significant source of national pride and prestige. Nothing in the Gambling Act review, I hope, will do anything to undermine the financial condition of that great sport or its place at the heart of our national life.

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Cover image by Mike Kotsch on Unsplash