Racing’s new leaders will need to attack poisonous gaming betting | British Horseracing Authority

The understated yet potentially important dispute between Flutter Entertainment, the parent company behind betting brands such as Paddy Power, Sky Bet, and Betfair, and Arena Racing Company (Arc), which manages 16 racetracks in Britain, reignited last week when Sky Bet and Paddy Power made “a commercial decision” to withhold early pricing for the Lingfield meet scheduled for Wednesday afternoon.

This move to effectively boycott the racing card until moments before the start was seen as somewhat of a delayed reaction to a guest column penned by Ian Brown, CEO of Flutter UK and Ireland, in the previous day’s Racing Post .

In Brown’s column, he made several intriguing points, one being that Flutter contributed over £140 million to racing in 2023, covering the levy, sponsorship, marketing expenses, and media rights. He also indicated that the amount Flutter pays for online streaming rights can often rival the total prize money available. Given that Flutter is just one of several leading operators involved in buying streaming rights, Brown expressed concerns over the distribution of funds, asking, “Where does the rest of the money go?”

Brown certainly isn’t alone in pondering this.

The exact percentage of turnover Flutter is paying for streaming rights remains closely guarded. However, it has become evident over the past year that Martin Cruddace, CEO of Arc, managed to negotiate a considerably larger share of turnover for his racetracks compared to his counterparts at Racecourse Media Group, which represents major tracks under the Jockey Club Racecourses brand and key independent venues like Goodwood and York.

Cruddace’s role necessitates maximizing his company’s revenue, and since Flutter was seemingly willing to sign the agreement, there’s a strong argument to be made that they missed their chance to negotiate more favorably. We often find it difficult to renegotiate contracts for mobile phone plans or cable subscriptions under comparable circumstances, making it reasonable to expect that a multimillion-pound media rights contract is equally rigid.

However, Brown’s remarks act as a signal to the Thoroughbred Group, representing owners, trainers, jockeys, and stable staff, who believe that Arc tracks are enjoying substantial profits while providing minimal returns to the individuals putting on the races.

Ideally, the Thoroughbred Group and the tracks would collaborate to ensure that returns from betting are maximized and sensibly shared. After all, gamblers are the sport’s customers, and bookies retain a commission for facilitating the transaction. Any actions that increase tension and mistrust between racecourses and participants serve as a negligible victory for gambling firms.

Simultaneously, the timing and nature of Flutter’s likely futile effort to renegotiate its media rights agreement seem somewhat peculiar, suggesting their executives may have overpaid in negotiations with Arc—a concern shareholders might reflect on before bonuses are distributed at year-end.

However, this situation makes some sense considering potential future reforms to online gambling taxation. This went mostly unnoticed while attention was diverted to potential effects of “affordability checks” on punters, but last November, former Chancellor Jeremy Hunt suggested a review aimed at replacing the current tiered duty structure with a flat rate applicable to all gambling forms.

The current general betting duty rate on various forms of betting, including racing and sports, stands at 15%, while gaming profits (from online slots and casino games) incur a 21% duty. This differential acknowledges that betting profits are less predictable and harder to obtain, incentivizing firms to earn through betting rather than merely using it as a loss leader to push customers toward gaming options.

Establishing a flat rate for both betting and gaming—potentially around the current 21% rate for gaming—could pose a significant long-term challenge for the sport’s funding model, arguably exceeding the impacts of affordability checks. This change would likely enhance the appeal of gaming options for operators and provide Flutter and other significant players with incentive to diminish their racing offerings and cut back on media rights expenditures.

Despite the likelihood of this being overshadowed by a significant Labour victory in the elections, if the Treasury identifies it as a viable source of funds for essential public services, it will resurface eventually. Should that occur, the Betting and Gaming Council, the industry’s primary lobbying body, may not mount an effective resistance, as major gambling firms often prioritize revenue from gaming over betting.

Last week, there was considerable concern in the racing community regarding the release of the first Gambling Survey for Great Britain by the Gambling Commission, which many feared would spark demands for stricter regulations and more rigorous affordability checks for all gamblers. To a degree, that concern was validated.

However, the details from the survey unmistakably reveal that gaming products—particularly online gaming options—are considerably more hazardous compared to betting and lotteries. Notably, the commission highlighted that individuals who gambled on online slots were more than six times as likely to have a PGSCI (Problem Gambling Severity Index) score of 8 or more, which indicates an experience of problem gambling.

This is not an argument for equalizing gaming duties; rather, it may warrant a stronger differential—raising gaming duty to 25% could be a beneficial start. Yet, this is not a stance the BGC or the broader industry is likely to support anytime soon.

Presently, the British Horseracing Authority is on the lookout for both a new chairman and a new CEO. Someone who can advocate effectively for both racing and betting while actively challenging the detrimental rise of gaming would be a timely appointment.

Kyprios can lift Cup for O’Brien

Although Auguste Rodin did not achieve the distinction of becoming the sixth horse to win seven Group One races for Aidan O’Brien after a disappointing outing in the King George at Ascot on Saturday, Kyprios (3.35) has a strong chance to join the ranks of Yeats, Highland Reel, Magical, Minding, and Rock Of Gibraltar in this accolade when he competes in the Goodwood Cup on Tuesday.

The dual Gold Cup winner possesses both the stamina and finishing speed necessary to excel, having secured five of his six Group One victories by a margin of a length or less.

The only exception was an impressive 20-length triumph at Longchamp in October 2022. While Gregory aims to rebound over this shorter distance following a disappointing performance in the Gold Cup, Kyprios’s competitors will essentially be running for second place if the favorite performs at his usual level.

Goodwood 1.50 A number of these contenders recently participated in a strong edition of the John Smith’s Cup at York, including Enfjaar, the victorious horse and likely favorite. However, his position in stall 13 is less than ideal, which is why Dual Identity, who faced difficulties during the race at Knavesmire, appears more favorable from stall three at a price of around 16-1.

Goodwood 2.25 It is challenging to dismiss any of the eight runners in this juvenile Group Two, but An Outlaw’s Grace performed well at the same level last time and is expected to improve with the increase to seven furlongs.

Goodwood 3.00 The visual impression of English Oak’s victory in the handicap at the Royal meeting was substantiated by a compelling time, making him appear overvalued at approximately 7-2 as he steps up to Group Two competition.