Julie Harrington: racing's lifeline reserves should not be used to fill the gaps left by new measures

Racing cannot be left to rely on “lifeline” Levy Board reserves to fill gaps in funding created by measures proposed by the government, BHA chief executive Julie Harrington said on Thursday as the sport began to absorb the detail contained in the white paper.

The government's long-awaited gambling review, published on Thursday, included estimates from the Department for Culture, Media and Sport (DCMS) of the likely drop in income for racing as a result of the financial risk checks coming into force, with an upper figure of £14.9 million quoted in the document.

The figure represents approximately one per cent of racing’s annual income – with levy yield, media rights income and sponsorship all contained within the estimate. The white paper also said that the review into the levy process, which the government had previously committed to starting by next year, was under way.

In the expectation of a drop in funding to racing as a result of the proposals prior to any new levy process coming in, the white paper points to £29m being held in the Levy Board’s reserves which “could be used to mitigate any funding gap while levy changes are introduced”.

However, Harrington, who said the BHA was “a little concerned” figures for the drop in racing’s income suggested by DCMS were “a bit of an underestimation”, said calling on levy reserves as a stop-gap was not an appropriate use of the funds.

Harrington said: “The reserves of the Levy Board were really a lifeline for the sport during Covid and it showed they are there for a reason.

"There will be a lot of discussion and dialogue between the Levy Board and DCMS about the right level of reserves for the Levy Board to ensure there is protection there for the sport in the event of things like Equine Influenza or any other breaks to the sport.

“The language [in the paper] is around 'could [the £29m] be an interim [measure] while we work around a more strategic solution to make sure racing is getting the right return to protect its long-term future'. It’s encouraging that long-term protection of racing’s future is there for consideration, I’m just not sure that using the levy’s reserves while we do that is a great idea.

“I would suggest it’s a reason to get the long-term solution worked on quickly and also for us to remind our colleagues at DCMS and the Gambling Commission how those reserves were a lifeline for all those people in the rural economy who didn’t need to be furloughed and so on during Covid. That is what the reserves are for.”

Levy Board reserves were vital in keeping racing going during the height of the pandemicCredit: Edward Whitaker

Harrington said the BHA was “really pleased that government has listened to the representations we have made so far” and that efforts made to separate sports betting from casino games had been effective.

“There is some good language in there accepting there is a difference between sports and evidence of faster losses in casino-based games,” she said. “It may not be the headlines, but the language below really does differentiate that so it’s clear that has landed.”

The publication of the white paper was “welcomed” by gambling operators Flutter Entertainment, Entain and Kindred Group, which said it would provide greater clarity to bookmakers.

Analysts at Goodbody said “today’s outcome is largely a positive one for the sector” following the white paper’s release. However, affordability checks at the higher levels of a £1,000 loss in 24 hours or a £2,000 loss over a 90-day period were criticised by Regulus Partners, which said they had the potential to push more punters into unregulated markets.

“We do not believe that the second tier of affordability checks will be proportionate or effective; they will simply fuel multiple account use and black market activity,” analyst Paul Leyland said.

Greater powers would be handed to the Gambling Commission to shut down and disrupt black market operators as part of new legislation, according to the white paper. Nevertheless, an increase in the use of black market betting sites was also cited by Gamstop, the betting self-exclusion scheme.

Gamstop chief executive Fiona Palmer said: “We are particularly concerned about the targeting of vulnerable individuals by illegal sites not registered with Gamstop. More than 365,000 people have excluded themselves from online gambling and it is worrying that they are being deliberately targeted when they are at their most vulnerable.”

Read more here:

'Frictionless' affordability checks raise more questions than answers 

BHA concern over financial risk checks as government reveals white paper 

What they say: 'We will continue to make our case that sweeping blanket checks on affordability are not appropriate' 

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