The future of horseracing

Background

There has been much recent discussion, within the horseracing industry, as to the future of the sport in Great Britain. The British Horseracing Authority (BHA) is the governing body and regulator of thoroughbred racing in Great Britain. It has begun work on developing an industry strategy that will create a “long-term plan” for the sport.

Recently, industry stakeholders have highlighted the following areas as being of particular importance to horseracing’s future: the relationship between gambling and horseracing, staff shortages and animal welfare.

The economic impact of horseracing in the UK is considerable. According to a study by the BHA (PDF), submitted to the Government during its Gambling Act review, the racing industry has “direct revenues in excess of £1.47 billion and makes a total annual contribution to the UK economy (including induced effects) of £4.1 billion.” A different study commissioned by the Department for Culture, Media and Sport (PDF), and published in 2016, said that the industry was worth approximately £1.1 billion, and contributed £3.45 billion a year to the UK economy. In 2020, the BHA said that horseracing was the UK’s “second largest sport behind football in respect of attendances, employment and revenues generated annually” (PDF).

Attendance statistics from the Horserace Betting Levy Board (PDF) showed that 4.8 million people attended racing events in 2022. The BHA’s fixture list (PDF) contained a total of 1,488 race days in 2023; the total fixture list comprises 1,468 fixtures in 2024.

Industry plans

The British Horseracing Authority is leading various workstreams to develop an industry strategy for British horseracing. This strategy will focus on ten areas: the racing product, horse welfare, people, integrity, owners, betting, product presentation, fans, investors, and corporate social responsibility. So far, this process has led to the introduction of a package of measures (announced in October 2022) to improve “the competitiveness of races on the Flat and over Jumps in 2023.” These measures focus on race volume, race planning and other tactical interventions.

Another component of this strategy was the introduction of changes to the 2024 fixture list, to be trialled over a two year period, to 2026. The Horseracing Betting Levy Board also announced that it has budgeted to contribute £70.5 million to prize money for racing fixtures in 2024. An increase of £3.2 million on the figure initially budgeted for the previous year.

Further reading

• BHA, Fixture List Headlines Summary (PDF), 10 October 2023
• BHA, British horseracing’s industry strategy (accessed 18 October 2023)

Gambling and horseracing

Gambling and horseracing have a long and interdependent relationship. A long-standing element of this is the Horserace Betting Levy. This is due to be reviewed in 2024, and industry stakeholders have called for changes to the levy framework.

More recently, the publication of the gambling white paper in April 2023 has led to a broader discussion around the possible impact of these proposals on the industry.

Gambling white paper

The Gambling Act 2005 regulates gambling in Great Britain. The Government published a Gambling Act review on 8 December 2020. Its purpose was to examine whether the 2005 Act provided the right “balance of regulation” in the digital age. There were around 16,000 responses to the review, and the Government’s response, in the form of the white paper, was published on 27 April 2023.

In a statement to the House of Commons, Lucy Frazer, the Secretary of State for Culture, Media and Sport (DCMS), observed that smartphones had “transformed” gambling and that the temptation to gamble was “everywhere”. The Minister said the white paper would update gambling rules and regulations to “protect the most vulnerable while also allowing everyone else to enjoy gambling without harm”. It sets out proposals for change in six areas:

• online gambling
• marketing, advertising, and sponsorship
• the Gambling Commission’s powers and resources
• dispute resolution and consumer redress
• children and young adults
• land-based gambling (eg casinos and the availability of gaming machines)

The white paper’s proposals for reform of online gambling (PDF) included new obligations on operators to perform financial risk checks “if a customer’s gambling is likely to be unaffordable and harmful”. The document stated that this would target three types of risk: “binge gambling, significant unaffordable losses over time, and financially vulnerable customers”.

The Gambling Commission ran a consultation on these possible changes. It launched on 26 July 2023 and ran until 18 October 2023. The consultation document provides the following summary of the proposed changes:

Financial vulnerability checks: The first is putting in place a standard approach to a light touch check to identify customers who may be particularly financially vulnerable (a financial vulnerability check). These are unintrusive checks, using publicly available data at moderate levels of spend. Some larger operators already conduct such checks for all customers at registration, and others do so at some point in the customer journey. We propose these are conducted at £125 net loss within a rolling 30 day period or £500 within a rolling 365 day period, which we estimate will reach approximately 20% of customer accounts and identify vulnerability such as where a customer is subject to bankruptcy orders or has a history of unpaid debts. At these moderate levels of spend (in the highest 20% of customer accounts), we consider light touch checks for financial vulnerabilities is necessary, suitable and proportionate.

Financial risk assessments: The second is an enhanced financial risk assessment at unusually high loss levels where the risks are greater. These assessments are proposed to be informed primarily by credit reference data. We propose them to apply where there are losses greater than £1,000 within a rolling 24 hours or £2,000 within 90 days. We also propose that the triggers for enhanced assessments should be lower for those aged 18 to 24.

The thresholds for these checks will be confirmed by the Gambling Commission following an analysis of the responses to the consultation document. Any risk checks would be introduced through changes to the Commission’s Licence Conditions and Codes of Practice.

Responding to the white paper, the BHA welcomed its publication, but said that the structure of the affordability checks could be “critical” for the horseracing industry. It warned the government that “sweeping blanket checks on affordability are not appropriate” and any new measures should be “proportionate and targeted”.

In the white paper, the Government estimated that its online financial risk protections would reduce online horseracing betting gross gambling yields by 6% - 11%. This, alongside other effects, would lead to an estimated “reduction of between 0.5% and 1% of total racing industry income”. This equates, according to DCMS, to a reduction of £ 5-8 million in the Horserace Betting Levy.

The Government also said that it was “keen to ensure that measures such as financial risk checks do not adversely affect the sector”. The possible effects of the changes set out in the white paper would be taken into account during a review of the Horserace Betting Levy.

Further reading

• House of Commons Library, Gambling white paper: A reading list, 2 June 2023
• Department for Culture, Media and Sport, High Stakes: Gambling Reform for the Digital Age (PDF), April 2023

Gambling in Northern Ireland

Gambling is a devolved matter in Northern Ireland. Gambling (other than the National Lottery) is regulated by under the Betting, Gaming, Lotteries and Amusements (NI) Order 1985 as amended by the Betting, Gaming, Lotteries and Amusements (Amendment) Act (Northern Ireland) 2022.

In May 2021, then Communities Minister Deirdre Hargey announced a two-phased approach to changing gambling laws in Northern Ireland. Phase one, introduced through the 2022 Act, addressed a “a number of anomalies in the 1985 Order”. This included making gambling contract enforceable in law and removing some of the restrictions on promotional prize competitions.

The second phase will include a “completely new regulatory framework which will regulate online gambling, including gaming machines.” The Northern Ireland Assembly dissolved in March 2022 and any further legislative changes “will be for an incoming Minister and Executive”.

Further reading

• Department for Communities, Consultation on Regulation of Gambling in Northern Ireland, 16 December 2019
• Department for Communities, Betting, gaming, lotteries and amusements (accessed 24 October 2023)

Horserace Betting Levy

The Horserace Betting Levy is paid by bookmakers with annual gross profits on British horseracing in excess of £500,000, at a rate of 10%. The Government last introduced changes to the levy in 2017. The Horserace Betting Regulations 2017 extended the levy to all gambling operators (including overseas operators) offering bets on horseracing in Great Britain. It also established a fixed rate (10%) at which the levy is calculated.

The Betting Levy Act 1961 first introduced a statutory levy on the proceeds of horserace betting. This was to offset the decline in raceday revenue after the legalisation of bookmakers’ off course operations. The current legislative framework is provided by the Betting, Gaming and Lotteries Act 1963 (as amended). The levy is collected by the Horserace Betting Levy Board, and distributed, under section 24(1) of the 1963 Act, in the following ways:

• Supporting breeds of horses.
• The advancement or encouragement of veterinary science and
• The improvement of horseracing.

According to the Horserace Betting Levy Board’s Annual Report and Accounts 2021/2022 (PDF), the levy yield for 2021-2022 was £97.6 million. This was an increase of around £15.6 million on the previous year.

Stakeholders within the horseracing industry have previously called on the Government to introduce further changes to the levy. Industry figures, for instance the BHA, have suggested that changes to the levy are necessary in order to “remain competitive with other racing nations.”

On 14 September 2023, speaking for the Government during a debate in the House of Lords, Lord Harlech provided a summary of prize money at British races, the BHA’s current position on the levy and the Government’s review process:

Mechanisms for funding racing in other jurisdictions are not directly comparable with Great Britain. For example, France has a state monopoly and in Ireland there is a general tax and a grant to racing. The Horserace Betting Levy Board has made additional contributions to prize money, supported by a £21.5 million loan via the sport survival package. It should be noted that prize money in Great Britain is spread across a greater number of fixtures and the British Horseracing Authority is trialling changes to the fixture list from 2024 aimed at growing the sport.

I turn to the Government’s review of the levy. The British Horseracing Authority has presented its case that there is a significant gap in funding, meaning that it is unable to compete with jurisdictions such as Ireland and France. It has also submitted suggestions on how to close this gap. We are considering these proposals as we undertake our review, which is due in April 2024. I cannot pre-empt its outcome, but I reassure all noble Lords that the decision will be firmly based on evidence and that the suggestion made by many noble Lords that the scope of the levy should be amended to include racing outside Great Britain is being considered as part of the review.

Further reading

• Horseracing Betting Levy Board, Three-Year Business Plan: April 2022- March 2025 (accessed 18 October 2023)
• House of Lords Library, Horseracing industry: Support and funding, 14 November 2022
• House of Commons Library, The Horserace Betting Levy, 10 July 2019

Staff shortages

A 2021 academic article by Juckes et al., published in the Comparative Exercise Physiology journal, conducted focus groups to understand staff shortages in the UK horseracing industry. The authors said that: “The British Horseracing Industry has been described as having a labour shortage since the 1970s”. They pointed to longstanding anecdotal evidence of problems with “staffing retention, career progression and job satisfaction”.

On 3 October 2023, the BHA said that “the racing and breeding industries currently face a shortage of around 2,000 employees”. Similarly, one of the strategic objectives of the National Trainers Federation, the body that represents “trainers interests”, is to enable trainers “to employ sufficient numbers of skilled staff”. Its 2022 Annual Report (PDF) described the “the far-reaching ramifications of a staff shortage”, and called on the sport to take a “collective responsibility for resolving the problem”.

Some industry stakeholders have suggested that these shortages have increased post-Brexit. For instance, the BHA, the National Trainers Association and the Thoroughbred Breeders Association have called on the Government to add specific industry roles to the Shortage Occupation List.

The Migration Advisory Committee, an advisory non-departmental public body that advises the Home Office on migration issues, published its review of the Shortage Occupation List in October 2023. According to the Home Office, a shortage occupation is a “skilled job where there is a shortage of workers in the UK”. Individuals with jobs on the shortage list may be able to apply for a skilled worker visa.

The October 2023 review recommended that racing grooms, stallion handlers, stud grooms, stud hands, stud handlers and work riders be added to the list. The report noted the “clear evidence of shortage for the listed job titles”. The Home Office has yet to release its response.

Further reading

• Migration Advisory Committee, Review of the shortage occupation list 2023, 3 October 2023
• Juckes et al., Racing to a Staffing Solution: An investigation into the current staffing crisis within the UK horseracing industry, Comparative Exercise Physiology, Vol 17 No 1, 11 January 2021

Animal welfare

The effect of racing on horses has been a controversial issue amongst animal safety groups. During the summer of 2023, prominent horse races were subject to protests from the Animal Rising group.

There is division amongst UK animal welfare organisations as to how to engage with horseracing. The NSPCA, for example, has said that it would rather “work alongside the industry to do all we can to better the welfare of the racehorses”, than “campaign from the outside to bring about the end of one of the UK's biggest spectator sports”. It is in regular dialogue with the horseracing industry and has recently called for smaller fields in races, and changes to how the whip is used. Whereas groups like Animal Aid have said that jump racing should be banned. In response to the death of Hill Sixteen at the 2023 Grand National, the organisation said: “Another innocent horse has their life taken from them in the name of entertainment and gambling."

The BHA, in its Equine welfare in British horseracing factsheet (PDF), has said that it “demands the highest standards of welfare from all licensed jockeys, trainers and racecourses”, and works to do “everything possible to minimise…risk” in the sport.

On 23 October 2023, in response to a written question, the Department for Environment, Food and Rural Affairs offered the following summary of the actions it had taken around horse safety:

The British Horseracing Authority (BHA) is British racing's governing and regulatory body and is responsible for the safety of racehorses at British racecourses. The BHA works alongside the RSPCA and World Horse Welfare to make horseracing as safe as possible. Officials from Defra engage with these organisations on such matters.

Further reading

• Horse Welfare Board, A life well lived: A new strategic plan for the welfare of horses bred for racing, 2020-2024 (PDF), February 2020.
• World Horse Welfare, Statement on BBC Panorama programme – The Dark Side of Horse Racing, 20 July 2021
• British Horseracing Authority, Horse welfare in British racing (accessed 18 October 2023)
• The Conversation, The horseracing industry is ignoring what science says aboutwhipping, 15 September 2022
• House of Lords Library, Horseracing industry: Government support and recent developments, 6 September 2023