FOBT crackdown cuts prize-money at 16 British racecourses
Prize-money across 16 British horse racing tracks is set to fall by 16% in 2019, owners expecting 1,000 betting shops will close due to the UK government's crackdown on FOBTs.
Arena Racing Company (ARC) has said it will reduce its contribution to prize-money at its racecourses by £3m, a fall of 16% to a total of £15.3m, as it prepares for predicted consequences of the reduction in maximum stakes for FOBTs.
Their move has received the backing of the Racecourse Association, and is likely to be mirrored by other racecourse owners, before the new betting legislation comes into play next April
ARC 'Simply Cannot Continue'
From April next year, minimum betting stakes on FOBTs (Fixed Odds Betting Terminals) in betting shops will be slashed from £100 to £2, in the government and betting industry's bid to address gambling addiction.
While ARC recognises the need for this, it also estimates that the changes will result in 1,000 betting shop closures by December 2019, and a knock-on reduction of £40-60m in crucial media rights payments to racecourses.
“The well-publicised impact of betting shop closures on racecourses’ media rights income has already started to take effect, and will only increase in the months and years to come," ARC chief executive Martin Cruddace said in a company statement.
"As a result of this, ARC simply cannot continue to support our current levels of executive contribution to prize money and unlock all qualifying races, as was the case throughout 2018."
Cruddace added: “We fully understand the importance of prize money across the industry, and do not take such a decision lightly."
3,406 Races Affected
ARC's £3m worth of extra executive contribution was to be used to 'unlock' extra price-money for qualifying races across the lower level of its programme from February 11.
This initiative was out of the 2017 funding review between the British Horseracing Authory, Racecourse Association and Horsemen's Group, and meant that racecourses who made an extra executive contribution of £900 above minimum race values for certain races would trigger appearance money and race incentive fund grants.
A total of 3,406 races run at ARC racecourses will qualify for this initiative in 2019, and Cruddace stressed that every effort would be made to ensure stakeholders are not impacted by the cuts announced on Monday.
“We are working with the whole industry to review funding and the allocation of the substantial, and hard won increased Levy income to support the prize money levels for grassroots racing that we have, until now, been able to provide," he said.
"It is therefore hoped, contingent on the support of our colleagues at the BHA and Horsemen’s Group, that owners and trainers who are kind enough to run their horses at our racecourses do not then see an appreciable difference.
The Racecourse Association's chair Maggie Carver backed Cruddace, giving rise to speculation that ARC is only the first racecourse group to re-evaluate its outgoings.
“These are challenging financial times for Britain’s racecourses as the media rights landscape, in particular, has fundamentally shifted in recent months, so we can understand ARC’s decision," said Carver.
"The RCA and its members will continue to work with Horsemen and the BHA to try to mitigate the situation as the funding environment evolves.”
ARC's 16 racecourses spread the length and breadth of England and Wales, eight standing in the North and Midlands, and eight in the South and Wales.They include four of Britain's six all-weather Flat racing tracks, as well as Group 1 course Doncaster, and Chepstow, home of jump racing's Welsh Grand National.
ARC owns more than a quarter of of Britain's racecourses, Jockey Club Racecourses being the second-biggest owner with 14 courses, including Cheltenham, home of the Cheltenham Festival, and Aintree, venue for the Grand National. The remaining 29 tracks are independently owned, but are also facing financial challenges in 2019.
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