Charlie Parker: Clarity much needed as core funding takes a hit

British racing is facing increasing uncertainty around its core funding while its ability to properly plan, budget and secure the strategic initiatives that are available is increasingly becoming more and more difficult. The return to the levy for the quarter ended June 24 was supposedly hit hard by a significant reduction in betting turnover, likely due to myriad issues, including poor weather, the European football tournament cornering the betting market, and of course the political uncertainty and ongoing attacks via affordability restrictions.

If we add in the withdrawal of the agreed levy reform due to the surprise election call, we just do not have clarity as to the funding of fixtures in 2025. We also do not know how the various projects that are underway at present, covering equine welfare, industry people, continued development of the premier concept, and consumer insight work amongst many others, will be factored into next year’s budget.

The BHA is primarily funded by owners and racecourses, with most of the racecourse funding coming from raceday service grants, which come from the Levy Board. Therefore, the funding of the regulator is reliant on us as owners and the Levy Board, which recently welcomed Anne Lambert as Interim Chair. The call on levy funds is increasing year on year, which is why the uncertainty around income and expenditure, not to mention its reserves policy, makes planning for the future so difficult.

We know that the racecourses have significant leeway when they make their decisions around levels of executive contributions to prize-money, so whilst there are no prize-money agreements in place – having lapsed in 2018 and in effect suspended at the onset of Covid – we as owners are faced with increasing uncertainty as to what we will or will not be running for in 2025.

The yearling sales season is continuing, albeit in a stuttering fashion thus far, yet owners, trainers and syndicate managers are expected to invest heavily whilst not having any real clarity of the key metric when balancing their investment decisions.

You may think it was ever thus, however things have changed. Formerly the levy had a guarantee built in meaning even if results went against the bookies, there was a minimum funding requirement. We were also promised the seven-year review, which should have concluded by April 2024, a period which obviously saw the real value of the levy return eroded by very high inflation rates, and as stated above there are no longer prize-money agreements in place to secure a portion of the media rights monies paid to the racecourses.

Against this backdrop, the industry has a real opportunity to secure significant new investment as the appetite for global sports investment continues to grow. There are only limited resources and man hours available, and the balancing act between trying to fix the issues described above and aiming for the big prize is causing problems.

The industry must focus on the three main targets – whilst always being conscious of the increasing dangers around affordability checks and other pernicious moves by the Gambling Commission – namely to get the levy review back on the political table, solve the prize-money agreements once and for all, and of course secure the big prize.

These are the top three priorities on the ‘to do list’ for the incoming new team of industry leaders. The good news is that a lot of work has been done on all of these issues and the industry has worked collaboratively across a number of fronts, not least since the governance changes of almost two years ago. Surely it is not beyond us to push through on all three fronts and create a bright and exciting future.

One thing that must not hold the industry back is the roll out of the new Racing Digital project. So much of what can be achieved is reliant upon data and systems; the BHA recognised this, hence the move to Racing Digital, a joint-venture with Weatherbys. There have been delays, especially in the new streamlined owners’ charges piece, and this platform must now deliver so that the industry can move forward.