Friday 1st October 2021
The Horserace Betting Levy Board (HBLB) has agreed fixture-related funding of up to £90m for Racing’s 2022 fixture list of which up to £70m is for prize money, £10m more than allocated in 2018 and 2019.
These sums do not include the additional grants for prize money and towards regulation and integrity already announced at https://www.hblb.org.uk/release/682 following HBLB taking a £21.5m loan from Government’s Sport Winter Survival Package. Taking these into account, HBLB is likely to contribute up to £75m in prize money in 2022 versus around £60m in recent pre-Covid years.
These over and above normal contributions have been agreed in recognition of the sport’s continuing recovery from the effects of Covid-19. They have been made possible by the Board having carefully husbanded reserves over a period of time, which will continue to be drawn upon, and by betting activity since the resumption of racing in June 2020 being comparable to the pre-Covid period.
The Board has made these extensive allocations in recognition that investment by HBLB at this level is unlikely to be possible in 2023 but in the expectation that racecourse revenues, and the consequent ability of racecourses to contribute to prize money, will have recovered further by then.
In 2021, including the additional grants arising from the Sport Winter Survival Package loan, HBLB expects to contribute around £81m to prize money,
Of the 2022 prize money allocation of £67.2m, £55.8m is via a newly-developed ratecard mechanism, £6.9m for the Appearance Money Scheme, £3.5m for the Great British Bonus, a Divided Races Fund of £0.8m and an additional fund of £0.2m to support prize money at racecourses most affected by the new ratecard mechanism. There is also a £2.8m contingency that will be used to reward racecourse payments to prize money should these prove to be significantly above estimated levels. Funding contributions will be tracked through the year as HBLB and Racing manage these new mechanisms in practice.
The ratecard allocation to prize money is intended to split funding 60% to Flat racing and 40% to Jumping in accordance with the turnover generated by each code in recent pre-Covid years.
The remainder of the fixture-related funding has been allocated in Raceday Services Grants towards regulation and integrity (£18.6m) and a scheme that is a modification of HBLB’s Fixture Incentive payments to racecourses (£1.9m).
The £55.8m in the new “ratecard-plus” system builds upon the ratecard concept that has been in place since the resumption of racing fixtures in June 2020 after the Covid outbreak. Pre-Covid, once each racecourse’s prize money grant allocation from HBLB was calculated, it was paid to each racecourse in effect as a single sum and left to the racecourse to determine how to distribute it across the race programme.
Under the new system, what a racecourse receives from HBLB for each race will be linked directly to the racecourse’s contribution to that race. Every race class and type will have its own calculation formula, which have been developed by BHA in consultation with its constituents and will be published in due course. Each one will see HBLB pay a proportion of the Minimum Value and then a percentage of prize money contributed by the racecourse above that sum, up to a specified level.
The Appearance Money Scheme has been allocated £6.9m in order to continue supporting lower classes of races. Changes to the scheme have been proposed by Racing and agreed by HBLB which will increase the payments made to horses finishing in the first six, funded through the removal of payments to 7th and 8th place. All runners in the eligible chases set out in the scheme rules will continue to receive payment, as now.
The Great British Bonus Scheme will continue to receive £3.5m. It is a prize scheme aimed principally at the breeders and owners of British-bred Flat and Jump horses that race successfully in Great Britain. The winning connections of each horse can win up to £20,000 per eligible race.
Divided Races will be allocated £0.8m, while a Relief Fund of £0.2m has been created in order to support any prize money allocations to racecourses impacted by the changes to the ratecard for 2022.
Raceday Service Grants will continue to operate at their existing per fixture level of £12,571 with a total budget of £18.6m. A sum of £1.9m has been allocated for additional prize money for certain January to March Jump fixtures and early season Flat Turf fixtures, which is a variation on the Board’s long-standing Fixture Incentive Fund which saw HBLB make a cash payment to racecourses as an encouragement to stage these fixtures.
Overall, even assuming none of the £2.8m contingency is used and excluding the extra grants arising from the loan from the Sport Winter Survival Package, HBLB’s support for fixtures is up by 10% on the 2020 pre-Covid budget of £80m.
Paul Darling, Chairman of HBLB, said: “The Board recognised the importance of maintaining its higher than usual allocations to prize money in 2022 to support the ongoing recovery of the sport from the effects of the Covid period. This adds to the substantial extra grants that we have made in 2020 and 2021. In addition, by the end of 2021 the Board’s contribution to Covid-related regulatory costs is likely to have reached £3.7m.
“We are pleased to have modernised and developed our funding arrangements with regard to both prize money and the fixture incentive fund. Moving to a race-by-race basis for allocating all prize money gives the Board, and indeed all of Racing and Betting, more transparency as to where Levy funding is being allocated. The additional payments that incentivise racecourse executive contribution are intended to encourage a return of total prize money in 2022 towards pre-Covid levels.
“It must be recognised throughout the sport that although drawing again on our reserves makes it possible to continue with higher funding in 2022, the position in 2023 will be different. The Board is required to make the first repayment to Government of the Sport Winter Survival Package loan that was taken this year. That will be the first call on expenditure in 2023 and in the seven subsequent years.”
For further information, please contact HBLB Chief Executive Alan Delmonte on 07931 701536