Horse Racing

In spite of that great work, however, we still have a significant problem as we come out of the pandemic. Prize money—which is the lifeblood of the industry, enabling owners to generate a return on their investment—has fallen by 20% from 2019 levels. Sales of horses have fallen by over 20%, and more than 60% of major breeding operations are reporting declines in turnover. If we do not take action now, we will be overtaken by countries around the world as the global hub of racing, and we must not let that happen.

“responsive to future changes in the market”

and to ensure that the yield is meeting the levy’s statutory purposes.

It is clear that the levy’s yield has never met the level of costs envisaged in 2017. There will be an estimated £160 million shortfall in industry revenues between now and 2024. Given the pandemic, an early review is required to ensure the levy is providing an appropriate return both to meet its statutory objectives and to support an internationally competitive British racing industry.

Two changes are needed, and this is what I am asking for. First, the levy should be based on a percentage of turnover, not a percentage of profit. This would result in less volatile yields and remove unhealthy perverse incentives in the sport.

Secondly, and most urgently, the levy should apply to all horse racing globally that is bet on by British customers. Betting customers in Britain can safely enjoy and benefit from horse racing in a wide variety of countries, and British participants often compete in these international events, driving interest and UK betting turnover. However, British racing does not receive a return from betting activity on these races.

An extension of the levy to cover racing overseas would see the levy apply to all thoroughbred races held worldwide, rather than solely races run in Great Britain. This is how it works elsewhere, such as in France and Ireland. This second reform can be quickly and easily enacted and would generate around £20 million annually for British racing. Closing this overseas levy loophole is fair, right, good economics and based on historical and international precedent.

I close by inviting the Under-Secretaries of State for Digital, Culture, Media and Sport, my hon. Friends the Members for Croydon South (Chris Philp) and for Mid Worcestershire (Nigel Huddleston), to Newmarket to see racing in action, from behind the scenes and from the grandstand, so they can see for themselves the huge value of this remarkable sport. I invite them to meet the British Horseracing Authority so that we can work together on the detailed evidence and proposals that have been developed.

I pay tribute to the Government for their support for racing throughout the pandemic. I know the Minister has heard this heartfelt plea on behalf of a sport that so many love, and I will not be letting this drop, so I look forward very much to working with him to ensure British racing can thrive in the years ahead.

The horse-race betting levy, the topic of my right hon. Friend’s speech, was of course introduced more than 50 years ago, in the 1960s, when the betting industry was somewhat deregulated and placing bets away from racecourses was permitted. At the time, there were fears that people would leave the racecourses and bet on the high street, and the levy was introduced to try to mitigate that risk. Thankfully, over those past 50 or 60 years racing has proved enduringly popular, despite the concerns articulated back in the 1960s. Nothing better illustrates its enduring popularity than the vibrancy of its recovery as we have returned to normal after covid and restrictions on flagship meetings were removed. I understand that attendance at the recent Qatar Goodwood festival this year was close to the figures in 2019, which is fantastic news. Racing was the first sport to return, behind closed doors, after the first national lockdown—I wonder whether my right hon. Friend’s hand may have been behind that move, in some way, in June last year. I am pleased that horse racing has continued without interruption since then. The fact that it has been able to return so swiftly is thanks in no small part to the British Horseracing Authority to incorporate covid measures into the already meticulous protocols.

Given that time is pressing, let me address directly some of the requests my right hon. Friend made in his excellent speech. On a review of the horserace betting levy, it was of course reviewed relatively recently in 2017, when my right hon. Friend was a Minister in the Department, albeit not directly responsible for this policy area. In that review, the Government fixed the levy at 10% of bookmakers’ gross profits, to avoid annual negotiations, and based the levy on gross gambling yield—in effect, the gross profit—rather than turnover, so that there was a certain amount of risk-sharing between the gambling industry and the horse racing industry. One could conceive of circumstances in which, for some reason—unexpected events—the gambling yield might go down. That would clearly affect both parts of the sector, which are symbiotic, rather than falling wholly on the shoulders of the gambling industry, which is why the levy was originally constructed in that way.

A review is due to take place in three years’ time, in 2024. I am of course willing to listen to detailed representations if there is a case for looking at it again sooner. I think that the measures that I have set out addressed the issues in respect of covid, but if there are particular reasons why a review ought to be considered sooner, I would be happy to look at detailed representations from either my right hon. Friend or the industry, and I would consider them carefully. Having been appointed only a week ago, almost to the hour, I do not want to race to make any commitments in this policy area, but I will of course listen carefully.