Arc to slash prize-money over concerns about impact of FOBT curbs

Arena Racing Company (Arc) is to reduce its contribution to prize-money by £3 million in 2019, the first evidence of racecourses tightening their belts as a result of the government's crackdown on FOBTs.

The money would have been used to 'unlock' extra prize-money from levy funds for the lower levels of the programme book, but Arc hopes that cash – which would amount to around £4.5m – will still be made available to them to mitigate the impact on owners, trainers, jockeys and stable staff.

The changes, which come into effect on February 11 and will affect 3,406 races, mean Arc's total commitment to prize-money for 2019 will be £15.3m, down 16 per cent from 2018, having been £11.3m in 2015. Arc said further reductions could not be ruled out.

Arc chief executive Martin Cruddace said it was not a decision they had taken lightly but that the racecourse group, which operates 16 tracks and is due to stage 570 meetings in 2019, "simply cannot continue" to maintain its current levels of contributions to prize-money.

After the uplift in racing's income from the government's levy reforms, British racing agreed a new scheme for this year's fixture list in which racecourses who made an extra executive contribution of £900 above minimum race values towards the prize-money for certain categories of races would trigger appearance money and race incentive fund grants.

However, the government's decision to reduce FOBT stakes to £2 from £100 is expected to result in a major reduction in the number of British betting shops and, as a result, a cut in media rights payments to racecourses estimated to be between £40-60m.

It is understood Arc is budgeting for 1,000 betting shops to have closed by this time next year.

Arc chief executive Martin Cruddace say shop closures 'will only increase in the months and years to come'

Cruddace said: "At the time of the 2017 funding review it was agreed that the race incentive fund and appearance money scheme, paid for by these levy increases, should be unlocked alongside further direct investment from racecourses.

"Today, however, 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.

"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."

Arc has long complained that it does not receive its fair share of levy funding compared with the amount of income from the betting its fixtures generate, while Cruddace also reminded the industry that the group had led on the authorised betting partner policy – at a cost in sponsorship income believed to be around £2m – which had helped make the case for levy reform to government.

The Arc chief executive, who said he "completely" accepted the government's rationale for cutting FOBT stakes, hoped other racing stakeholders would ensure racing's grassroots continued to receive financial support.

"We fully understand the importance of prize-money across the industry and do not take such a decision lightly," said Cruddace.

Maggie Carver (second right): 'These are challenging financial times for Britain’s racecourses'Credit: Dan Abraham (racingfotos.com)

"It is for this reason that 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.

"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."

Other racecourse groups and individual tracks are likely to consider making the same decision as Arc, who also appeared to receive the backing of Racecourse Association chair Maggie Carver.

She said: "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.

"The RCA and its members will continue to work with horsemen and theBHA to try to mitigate the situation as the funding environment evolves."

BHA head of media Robin Mounsey said: “Fixture list policy including the way in which fixtures are funded is a 'tripartite' matter, which means that the industry’s approach is agreed by the BHA, Racecourse Association and Horsemen’s Group.

“In 2017 those member bodies agreed the existing policy, which has seen significant extra funding from the levy – unlocked by increased racecourse contributions – being targeted at the middle and lower tiers of the sport, with the intention of providing significantly improved returns to those operating at grassroots levels.

“The sport’s stakeholders are working together to understand the likely financial implications of the change in legislation coming into place from April, with the aim of developing a strategy that delivers the best outcome for the sport and limits the impact on all parties within it. This includes ongoing discussions with government, which has publicly promised to help mitigate the impact on racing.”

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