Thursday 28th March 2019
The Horserace Betting Levy Board has agreed an expenditure budget of £99.3m for 2019, a significant increase on the £85.3m budgeted for 2018.
The Board had already agreed and announced, in autumn 2018, the allocation of £85m of expenditure for 2019, the most substantial item of which was just over £58m to prize money.
At its meeting yesterday, the Board reached agreement on the allocation of the remaining items. Details of these allocations will be published in due course following further communication with interested parties. Among these grants, the Board has increased funding for a number of key areas, including veterinary research, equine welfare, racing staff recruitment, training and education and for the breeding industry, as well as its contribution towards racecourses’ regulatory costs and support for various initiatives to market and promote the sport.
As part of this week’s agreement, the Board has approved the allocation of a further £6.5m to prize money for the 12-month period starting on 1st April 2019. This decision took account of representations on behalf of Racing by the British Horseracing Authority, Racecourse Association and Horsemen’s Group.
The Board received a submission from Racing which set out that all racecourses were expecting to see a reduction in media rights income in 2019. While racecourses would absorb the majority of any loss, cumulative racecourse contributions to prize money were forecast to fall by £6.5m in 2019 compared to 2018.
The purpose of the one-off additional grant to prize money by the Board is to provide stability in the total prize money sum offered by British Racing to participants in 2019, in an environment of greater uncertainty regarding media rights income to the sport, principally from the retail betting sector.
A mechanism will be put in place so that, should racecourse contributions fall by less than £6.5m, a downward adjustment will be made to the amount that the Board grants to prize money in 2020.
Levy Board Chairman Paul Lee said:
“We are very pleased to be in a position to offer additional support to several important areas of the sport, including for equine welfare and research and towards the further development of Racing’s highly dedicated workforce.
“This increase in expenditure has been possible due to our additional income from the 2017 extension of the Levy to bookmakers outside Britain but also because, since 2017, the Board has carefully sought to increase its reserves rather than expending all of that extra income.
“As far as the additional contribution to prize money is concerned, the Board was very clear with Racing that the £6.5m is a one-off grant. It is intended to provide increased certainty to the recipients of prize money and breathing space for the sport while the scale and effects of licensed betting office closures become known during this year.
“Racing’s organisations have begun work on a plan as to how the sport will respond to the changing financial position and the Levy Board and its executive have been asked to play a role in this process. The Board considered it very important that there should now be a wide-ranging, longer term plan that commanded the support of the sport as a whole.
“In agreeing the £6.5m, the Board strongly encouraged the continued liaison between representatives of horsemen and racecourses as they discuss the creation of new, contractual prize money agreements. An environment of openness and transparency will be of great benefit to Racing and Betting as both industries confront the financial challenges ahead. The Levy Board will do what it can to provide assistance.
“An increase in expenditure of some £15m compared to 2018 means that the Board will run a budget deficit of some £10m in the year ahead on existing income forecasts, causing the Board’s reserves to fall to around £40m in March 2020. However, any significant contraction in the retail betting estate before then will see Levy income, and reserves, fall further. It will therefore be necessary for the Board to be cautious about making future commitments and a full review of expenditure for 2020 will take place in the months ahead.”
For further information, please contact Levy Board Chief Executive Alan Delmonte on 07931 701536
The £6.5m prize money expenditure will be allocated as follows:
Lower Race Incentive Fund: The ‘unlocking’ threshold will be reduced by £500 (to £400) and the current £400 Lower RIF payment by HBLB will increase to £900. Assuming all racecourses unlock, this will require c.£4.1m of additional funding over 12 months.
General prize money boost: Each Levy Board Criteria fixture will receive a one-off increase of £500. The cost of this will be c.£750,000 over 12 months.
Upper Race Incentive Fund: This will see c.£1.65m added to the Upper RIF fund with each race payment being scaled up by the same percentage as the fund.