"Once the right number is established, then will be the time to get into the issue of what parts of the betting world will be contributing what proportion – the very different businesses of small independent, majors, exchanges, online and other remote operators. They will have differences of opinion between them, undoubtedly. Heated differences. But whatever those difficult issues are, and however they are resolved, does not, and will not, and cannot, alter the amount that is due to racing."
There are lots of things you could say about it, despite the fact that it's only one paragraph; but I shall limit myself to three comments.
The first is, perhaps, peripheral. But I can't read it without finding that what springs to mind is the observation made to me by one of racing's CEO's at Cheltenham last year: I remember him telling me that "Nic's rhetoric is Churchillian. We sit in meetings with him and you can see people hanging on his every word. But the trouble is, when you see it written down afterwards, you realise you can't actually work out what it means."
The second is more fundamental: it's curious to me that they don't yet know what the number should be. If they've spent the last three years saying that the levy is all wrong and racing needs to get a proper return, how is it possible that they are only just working out what number they think a proper return is?
And the third, most fundamental of all, is this: it's pretty clear, as was commented to me afterwards by someone who is part of the Horseman's Group, that the paragraph is a "shot across Betfair's bows", in that it flags the idea that not all operators should pay on the same basis as other operators. But surely, if the object of the exercise is to make sure that people pay commensurate to the amount that they benefit from racing, then what screams out as the solution is that everyone should be paying a percentage of their profits. Someone who only makes £100 pays £10; and someone who makes £100million pays £10million. What could be more consistent and proportionate than that?
Of course, if 10% of the overall profit figure doesn't get racing to the "right number" that we're about to have established, then what needs to change is the rate of the levy. As we've been saying since about 2004: if 10% across the industry isn't the right number, then change it; but you have to do that across the board, consistent across operators. And you also have to accept, as you make the product more and more expensive for the operators, that you risk accelerating the loss of market share to other sports.
Ultimately, that is a risk that Racing is going to have to take, if it wants to go down the route of hitting a pre-determined number; because the quest for that number can only be achieved by deciding what it is, and then working out what percentage of operators' profits is required to hit it.
Of course, the BHA will argue that the percentage will be determined by how many people are in the net, and therefore by what makes you a bookmaker; and we'll be back to the same old unsubstantiated arguments about bookmakers avoiding levy or punters who make money on Betfair being relevant (but not those who make money anywhere else). Flagging this appears to have been the purpose of this paragraph in the speech.
So, at an AGM to take us into a new decade, where Racing for Change was the principle topic, the Chairman wanted to underline the concerns that exchanges raise for integrity and margins; and the Chief Executive wanted to signal his plans to levy Betfair differently.
Who says Racing's not stuck in a groove?
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