The British Horseracing Authority (BHA) is in the process of appointing a new chair and chief executive. This is happening while a growing dispute between Flutter Entertainment, the parent company of several gambling brands, and Arena Racing Company (Arc), which operates 16 British tracks. This disagreement escalated when Sky Bet and Paddy Power, both under Flutter, decided not to offer early prices for a meeting at Lingfield, effectively boycotting the card until minutes before each race.
This move was a response to a column by Ian Brown, Flutter’s CEO UK and Ireland, in the Racing Post. Brown highlighted that Flutter alone contributed over £140m to racing in 2023, across the levy, sponsorship, marketing spend, and media rights. He also questioned where the rest of the money from streaming rights, paid by several big operators, was going.
The percentage of turnover that Flutter pays for streaming rights is confidential. However, it is clear that Martin Cruddace, Arc’s chief executive, secured a larger slice of turnover for his tracks in the latest contract negotiations than his counterparts at Racecourse Media Group. This has led to suspicions from the Thoroughbred Group, representing owners, trainers, jockeys, and stable staff, that Arc tracks are profiting significantly while offering little to the performers.
Ideally, the Thoroughbred Group and the tracks should cooperate to ensure that the return to racing from betting is maximised and sensibly distributed. However, the current friction between the racecourses and the participants benefits the gambling firms.
Flutter’s attempt to renegotiate its media rights contract seems odd and suggests a possible oversight in the negotiations with Arc. This comes at a time when potential changes to the taxation of online gambling are being considered. The former chancellor Jeremy Hunt proposed a consultation on replacing the current three-tier structure for duty on betting and gaming with a flat rate for all forms of gambling.
A flat rate for both betting and gaming could be a significant long-term issue for the sport’s funding model. It would increase the attractiveness of gaming products for operators and give Flutter and other big operators a reason to reduce their racing offerings and media rights payments.
The publication of the first Gambling Survey for Great Britain by the Gambling Commission has raised concerns in racing. The survey shows that gaming products, especially online ones, are significantly more dangerous than betting and lotteries. There is no doubt an urgent need for the new leaders of the BHA to address the growing influence of gaming in the industry.
SiGMA East Europe Summit powered by Soft2Bet, will take place in Budapest from 2-4 September 2024
