Latest thoughts on the racing industry from Geoff Banks – £47.5 million and change

OK, so £47.5 million is what the big four betting operators have guaranteed Racing. And of course it heralds a new era of cooperation between bookmakers and Racing. We’re all friends now eh? Let’s give due credit for the £8 million offered by Betfair – money they didn’t have to offer the Levy by statute. The Leaders In Racing conferences with keynote speakers led by Andy Hornby of Coral, was livened up with a call for Racing to support FOBT’s. In doing so Racing gets to keep more shops open, with the potential for more business on UK horse racing. We’re all very encouraged by this new era of cooperation between the new Racing, headed up by Paul Bittar, and the representatives of the largest betting organisations funding it. Top marks for heralding in a new era and spirit of bonhomie between the parties.


Now I’m a bookie, and by nature an independent. I pay my taxes and Levy at the going rate, and my data is an open book. So you’ll take what I say with a pinch of salt perhaps, because such independent organisations as my own are rivals in business to the majors. But hold on a minute, this ‘guarantee’ is significantly lower than Racing has achieved from the Horse Race Levy for many a year. Outstanding?

Let’s forget the Levy Board’s estimates. They can’t predict results and nor can the Bookies. Nor can they in any way determine how much of Ladbrokes or Corals is lost by attrition offshore. The Levy over the last 6 years has fluctuated between a low of £60m and a high of £115m

What’s the crowing about a deal which falls £9 million underneath the lowest we’ve ever achieved? In fact, why bother even considering it? If you want Bookmakers to cooperate with Racing, shut them out of racetracks and TV companies and the like. And turn to the Government for support. Don’t worry, they’ll come quietly. Steepledowns won’t fill the book.

The multiples are popping champagne corks, and drinking to Bittar and Lee. That’s not meant as a joke. Now, were I them, I’d take all my top losers to Gibraltar because I’d know my duty bill would be topped out at £450,000, and my Levy capped at 10m. The extra £4.5 between the parties per year is in effect the same bribe to Racing that Betfair volunteered. The new way, if they won’t pay the going rate, let them pay what’s comfortable. Racing is now ‘off the back’ of the big six, because the deal is struck. No beating down the doors of Westminster to complain. And of course for four years, they can hive off as much racing business as they like offshore and pay £11 million each. Lovely biscuits.

Paul Bittar, is he the saviour of British Racing or a second hand car salesman whose business plan is to take the lowest funding level? I care little about the stories of meetings over months and coffee time buddying up if this is the end product. Bookmakers and exchanges can pay more because their offshore duties, tax and now levy are all so low. But of course they sponsor races. Fine.
Because it’s wrong. Because it’s the lowest level achieved for many a year. Because I know the Bookmakers and Exchanges can afford to pay a lot more. Their cost base in particular with regards to duty and tax, is so low in the offshore states that house their empires.

Why would Racing go into battle against the bookmakers for with two racecourse Supremos? I don’t believe Racetracks should be negotiating on behalf of racing with their most important sponsors.

No the BHA should have been going into bat with someone like me quite frankly. Not that I’m looking for the job, I’m making a point. There’s this incredible snobbishness which I find so counter productive to the good of the sport. The BHA is flush with racetrack people, Data analysts, solicitors, owners, even trainers. Yet so many decisions hinge on the betting product which underpins the finances. Not least of all, finding the right fixture levels and putting on the best balanced programme. Betting isn’t the dirty side of Racing, it is for most folk, very much what its all about. Finance is a critical part of any business, why does the BHA ignore it? I’ve heard the call for ‘Punter’ representation for many a year at High Holborn. A valid point to be fair.

As an expert in betting pointed out to me yesterday, the Fixture List has 90% of the same meetings for as long as we can remember and within each meeting are the very same races. The beginners chase at Sandown yesterday won by Hinterland always has small fields! Sandown in January had a meeting where four of the races worth a combined £50,000 had fewer than 8 runners each, but it’s been similar for many years. If the course had looked at their data they’d have changed the races, conditions, age group, distances, even a card with six handicaps. Isn’t it the role of race planning at the BHA to look at these issues? I’m assuming we’ll end up with the same ‘Super Saturday’ next year.

My final point is the timing. We’re less than a year before point of consumption comes into play. At the moment, you can buy a cup of coffee made in the High Street, served by British staff, and sit peering out of the window at a red bus. In the meantime, the tax for that transaction is paid in Holland. I don’t believe for a second point of consumption, if it gets through Parliament, represents the Holy Grail. Everything else is circumvented, so will this be. Gibraltar won’t fall into the Mediterranean any time soon. Result for Racing? More, not less custom offshore. More dependency on a ‘guarantee’ of £51 million. If I was King Ralph of William Hill, I’d cheerfully move more of my best offshore.

Some key statistics:

1464 fixtures

January to March – 21% of all races, spread evenly between both codes, contained an odds on favourite.
June, July, and August – 15% of all races involved an odds on chance. A third of which were shorter than 1-2
In July and August, 42% of racing had less than 8 runner fields and only 2.6% of handicaps contained 16 or more runners and 8% of all handicaps had either 3 or 4 runners! 41% of ALL handicaps in those months – less than 8 runners!

The effect of odds-on chances? In August, 35% of races returned an SP of 2% a runner or worse. In September, 30% of all races returned the same. Attractive? In June, July, August and September, there were only 4 days not containing an odds-on favourite.

Let’s look at the Chief Executive’s arguments on fixture levels. He says 1464 is the right level for Racing. This argument backed up by such as Andy Hornby of Coral. He argued that to put on a third meeting daily midweek increased his turnover by 30%. We’re talking about shop turnover here. In the same speech he then muddles the word ‘profit’ into the same argument at the same level. In other words he argued a third meeting every day would represent 30% more for the Levy.

That’s a distortion of the facts. To argue that turnover equals profit directly simply isn’t true. It might be true in the case of Waitrose, because turnover is more directly linked to profit. It’s a mistake King Ralph would not make, but then he never ran Boots. But I can assure you folks, in Racing the same is most certainly not the case. If you put on low field sizes, with odds on chances riddling the events, there are a Levy minefield. There are bad races. Punters simply do not like wagering in races containing odds on favourites.

Levy income is directly related to quality, competitiveness and field sizes. Punters don’t groan at 7/1 the field – they embrace it. Hornby wants Racing every ten minutes, because it adds to the vibrancy of his arcades. He wants a customer to walk in at lunch (when nobody wants to go Racing by the way) and sit on his machines generating £900 a month whilst the Racing provides the buzz.

So here’s Bittar’s thesis. Get into bed with the largest organisations. Openly support their machines and provide fixture levels they demand. In doing so he keeps the shops actually in business and increases the pot. Even going so far as to introduce racing on Good Friday in support of the LBOs. The argument for which will prove to be a sham in less than a year. ARC will be fortunate to pull in a million in sponsorship. I don’t doubt they can afford the gamble, given many of their races run for £1940.

There are 28 betting shops in Newmarket. Shops are literally yards apart. Do we need that many to service Racing in one little town? So what if we lose a few arcades? Racing isn’t the focus. Perhaps we should be about making it exactly that, with measures to improve field sizes and margins in the sport? I have argued for a substantial cut in the level of fixtures. Racing has become boring too much of the time. I rarely pass a shop every day without sticking my head in. I haven’t had a bet in an LBO since I was a lad, but I like to see what’s going on. For large parts of the programme they’re empty. British Racing is littered with fun festivals and events and cracking racing. But let’s cut the programme by just 100 fixtures and monitor the real effect. Hardly a slash and burn is it?

So let’s look at integrity. For many of you I appreciate this is a new subject. Certainly if you buy the Racing Post every day, you’re unlikely to find any exposes on this important area. And if the leading trade paper ignores the subject, it’s hardly at the forefront of most people’s minds, especially if you don’t bet.

Does integrity matter? The sport is underpinned by bettors. What is hugely underestimated, and certainly not understood, is the damage caused to customers’ confidence when they see something drift from 6’s to 16’s or greater and run down the park. It’s treated with derision in the shops. I tell you plainly, this is not happen-chance most of the time, although just enough drifters win to cause doubt. Equally its utterly routine to watch a horse backed fro 12/1 to 9/4 hose up in spite of its recent form.

Condoned? Trawl through the list of enquiries taking place at the BHA and you’ll find a glaring hole. Non-triers. It’s like the subject simply doesn’t exist. Oh sure, we get the odd case running through, and the sentences are generally harsh. It’s the spin. British Racing will react with vigour if you break the rules.

If it’s the regulators role to police the sport, then Bittar is failing in his duty of care to the image of this sport by not grasping the nettle. Heralding from a state notorious for calling out jockeys and trainers in this department, he must wince at how weak we are by comparison. Look at Hong Kong; they are red hot on integrity and employ 240 people to look after a programme that races 6 days a month.

We’ve got a handful of poeple. They take holidays don’t they? Can they cope with 7 day, 5 night programme servicing 1464 fixtures? Not for a second. Without Betfair tipping the wink to them from time to time, they couldn’t turn over an egg. Staffing levels are so poor with budgets cut so it’s an impossible task.

On arrival in the UK Paul Bittar said in an interview, ‘If you have low funded Racing, you will have a problem with the integrity.’ That’s an entirely accurate statement. So what’s he done about it? In the recent round of negotiations first with Betfair and then with the bookmakers, did he argue on behalf of the sport for a substantial increase in funding to support the fixture levels they demand? Is that not part and parcel of the deal?

Let me throw at you a few names: Plantetoid, Khewatim, Brown Pete, Am I Blue. All horses with similar profiles, exceptionally poor performances in lead up races, heavily gambled upon, but with historical form that suggested they were well capable of winning the races. Check the reports into enquiries at the BHA and see if any of these horses are named. Was there an enquiry? What did it turn up? Or was it all just a big happy surprise? Customer confidence demands the regulator takes measured steps to ensure any unusual gambles are fully investigated to ensure all is tickety boo. Sky News seem more interested than the BHA in Am I Blue. It was referred to High Holborn, then quietly dropped. Was the backbone knocked out of the regulators with their failures over the Top Cees case?

Jockey changes, withdrawing horses, horses drifting substantially, shoring up morning odds on Betfair with amounts as low as £51 have all been part and parcel of such gambles. Horses laid in running as the tapes go up at far greater odds than their SP. Isn’t the BHA failing in not investigating any strange movements in the market? We need far more draconian rules and most certainly no recourse to the Courts to second guess decisions. If you run them under our rules, accept them warts and all.

I recognise many of the problems outlined above were in place well before the arrival of the World’s Greatest Australian. Fixture levels for example have remained a constant since 2003. The major independants whose business focus on Racing, have so far been excluded from any discussion on fixtures, planning or Levy. It’s all about the casino operators. I’m uncomfortable with getting into bed with large organisations if the result in so doing is to sell the whole product well short of its value. Signing for a record low level isn’t laudable, it’s a sell out.

Bittar, contrary to popular folklore, strikes me as being like having a Scottish Chancellor. Everyone thinks its refreshing.

I’m not impressed. You make up your own mind.