The British Horseracing Authority admitted on Tuesday that it has reduced the scope of its new authorised betting partner (ABP) initiative, which was launched in October to target offshore betting firms that make no direct contribution to the sport from their racing profits. As a result, businesses which are “affiliated” to online betting firms will be allowed to maintain high-profile racing sponsorships at leading tracks including Cheltenham, even if they actively steer punters towards non-ABP bookmakers.
The BHA unveiled its plan to award ABP status to betting firms that “have agreed a fair and mutually sustainable funding relationship with the sport” on 20 October. So far only three – Betfair, Bet365 and 32Red.com – have agreed to pay a percentage of their gross profits on offshore UK racing business back to racing.
It was also announced on 20 October that Jockey Club Racecourses (JCR) and Arena Racing Company (ARC), the sport’s two biggest racecourse operators, would not accept new race sponsorships, or renew existing sponsorships, with non-ABP betting businesses, whose refusal to make a direct contribution to racing from their offshore profits has been estimated to cost the sport at least £30m per year.
A press release issued by the BHA at the time included a background Q&A which made it clear that “this announcement includes affiliate websites who will be deemed non-authorised betting partners if they direct customers to operators who do not pay Levy on their digital businesses”. This section of the Q&A has since been deleted from the archived press release on the BHA’s website but the original document, published on 20 October, remains online on the Jockey Club’s website, underlining the BHA’s subsequent U-turn.
Will Lambe, the BHA’s director of corporate affairs, said on Tuesday the change was a result of evolution in the ABP policy, and a decision to focus on individual operators in the immediate future, rather than affiliates. “We continue to work on the detail of the authorised betting partner model,” Lambe said, “with, for example, a kite mark being launched imminently, and are encouraged by those companies that are already on board and also the expressions of interest from a range of other betting operators.
“The policy will evolve but our current focus is the discussions taking place with betting operators, rather than affiliate websites.”
The most obvious beneficiary of what the BHA describes as the evolution of its strategy is the Racing Post, the trade newspaper, which sponsors races including the Arkle Trophy at the Cheltenham Festival and the Group One Trophy at Doncaster. The Racing Post redirects punters to the offshore operations of Ladbrokes and William Hill, neither of which currently has ABP status, both from its website and via its app for smartphones and tablets.
OLBG.com, an online punters’ forum that also refers users to offshore betting sites, sponsors another event at the Cheltenham Festival, the Grade One Mares’ Hurdle, and half a dozen more valuable hurdle races for mares during the National Hunt season. Had the BHA’s plan extended to affiliates, as was originally stated, these and similar sponsorship deals would have been under threat.
BetFred’s long-standing association with the Cheltenham Gold Cup was an early casualty of the new initiative after Fred Done, the firm’s founder, made it clear that he opposed the ABP scheme. Timico, a communications business founded by the leading racehorse owner Tim Radford, stepped in to pick up the sponsorship a few days later.
Other established sponsorships that could also be terminated are the Ladbrokes World Hurdle at Cheltenham, the Coral-Eclipse Stakes at Sandown and the William Hill King George VI Chase at Kempton, the highlight of the Christmas programme.
The BHA believes that racing is entitled to tens of millions of pounds each year as its share of the profits from offshore betting. Offshore turnover is outside the reach of the statutory Levy system, which return 10.75% of the gross profits from racing bets in high-street betting shops to the sport. The latest Levy scheme in 2014-15 yielded £60.1m, down from £70.1m in 2013-14, and the decline is expected to continue as more betting turnover moves online.
Steve Harman, the BHA’s chairman, recently suggested that racing will lose £110m over the next three years as a result of money “leaking” through offshore operators, putting 12,000 jobs in the industry at risk.
