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Sunday, 16 December, 2018

Arc boss warns racing is heading back to the dark days over rights row

RMG chief executive Richard FitzGerald: "surprised Arc was shocked"
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Racing is heading back to the “dark days” and the sport will be the loser.

That was the stark warning from Arena Racing Chairman David Thorpe yesterday after the decision by the Racecourse Media Group and SIS to walk away from their international rights joint venture in GBI Racing.

However, RMG chief executive Richard FitzGerald, in a bid to douse the flames, reiterated that the door was open for the rival group to join it in part of the new deal with SIS.

The deal between RMG and SIS, which emerged on Tuesday night, is an extension of their five-year betting shop media rights deal that results in RMG’s stable of 37 racecourses moving to SIS from TurfTV in April.

It encompasses international pool betting and fixed-odds rights, including retail and online, and means RMG will control the pool betting service globally for racing content from the RMG courses, Ireland and Chelmsford.

SIS will control the fixed-odds betting service for RMG and SIS content, which includes Irish racecourses, Chelmsford, international, greyhound and virtual racing.

GBI Racing is a joint venture between Racing UK and At The Races, in which Arc is a major shareholder. It distributes British and Irish racing to overseas betting operators but will cease operating at the end of the year, the news of which shocked Arc's leadership.  

FitzGerald said RMG had undertaken a review of the fixed-odds side of its business while at the same time speaking to Arc about renewing the GBI agreement, adding: "So I'm surprised they were shocked, given discussions had been ongoing for a while."

He added: "Through that review of fixed odds and looking at the offer that had come in from Arc for GBI, it was deemed unattractive in the round and we couldn't conclude a deal."

It is understood from sources outside RMG that Arc made an offer that would ensure GBI’s income from fixed odds betting would be protected and that expressed anxiety that the sport showed a united front.

David Thorpe: Arc chairman said the move took the sport back to the "dark days" and that British racing would be the loser

FitzGerald did offer an olive branch to Arc and ATR. He said: "As part of the discussion we were very clear we wanted to leave open the door for the ATR courses to come into this pool betting service on similar commercial terms to both our racecourses and Ireland.

"We think it's important. Hopefully some of the emotion will disappear at some point and we can have that conversation."

However, RMG's betting shop deal with SIS caused friction with Arc and this new deal has reignited those tensions.

Thorpe said on Wednesday: "This takes us back to the dark days, undermines our relationship with bookmakers and puts at risk the cooperation and unity we worked hard to build in the RCA, the Tote and over fixtures and marketing. The losers, sadly, will be British racing."

FitzGerald and SIS product director Paul Witten denied the deal had anything to do with the ongoing review of fixed odds betting terminals.

Widespread betting shop closures caused by a dramatic cut in FOBT stakes would hit SIS, but Witten said: "FOBTs would be a blow depending on what happens, and there's all sorts of speculation, but our business is much more diverse than just domestic retail business.

"We have a very strong international business, partly GBI-driven, partly outside that, and we've also got a strong digital business, so we're already diverse. This will obviously help us in diversification but from my perspective it wasn't a reaction to potential betting shop closures."

ATR chief executive Matthew Imi: "I can assure you that from our side competition will be fierce"

ATR chief executive Matthew Imi also expressed surprise at the end of GBI.

He described GBI as a "real success story for our sport", with growth in total annual revenues to British tracks having more than doubled since it was founded in 2010.

"The rationale behind GBI's formation eight years ago remains as strong now as it was then," he added.

Imi added: "The obvious consequence of RMG's actions is that it now turns the clock back and once again pits UK racecourses against each other in the international space. I can assure you that from our side competition will be fierce."

Despite Thorpe's warnings, the Racecourse Association said it did not believe there would be any repercussions from the deal, while BHA head of media Robin Mounsey said: "The BHA isn't involved in commercial matters relating to the sale of media rights internationally."

Nigel Roddis, managing director of the racecourse pool betting project British Racing Bet, in which the RMG and Arc courses are leading players, said it was business as usual.

He added: "Ultimately we still remain the nominated pool provider for those tracks that are part of our partnership. We're fully focused on working with all our racecourse partners as we continue to work towards our launch in July."


THE ROW EXPLAINED

What is GBI Racing?
GBI is a joint venture company between Racing UK, whose parent company is Racecourse Media Group, and At The Races launched in 2010 to distribute British and Irish racing to overseas retail betting outlets and online operators with a mission to "protect and maximise the value of UK and Irish horseracing media rights in the international betting market".

Why has a row broken out over GBI?
The agreement was up for renewal at the end of the year, but RMG has instead chosen to end the arrangement and set up an alternative service with SIS. Arena Racing Company, which is a major shareholder in ATR, claims it had no warning, something RMG disputes.

Do the two sides have history?
Yes. Arc was furious when RMG signed a betting shop media rights deal with SIS three years ago and this week's developments have reignited the tensions between the two sides.

Why is this important to the rest of British racing?
After years of in-fighting the sport has developed an impressively unified front in recent years. A battle between the two major racecourse powerbrokers could end that harmony as Britain's racecourses are an integral part of the three-way governance system for British racing, along with the BHA and the Horsemen's Group.


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