York boss warns of 'huge pressure' on racecourses as reality bites on the true cost to racing of affordability checks

Fears that the impact of affordability checks on racing's finances may have been significantly underestimated when the UK government published its white paper into a review of the 2005 Gambling Act in April are leading racecourses to face difficult decisions when it comes to prize-money in 2024.

York chief executive William Derby warned of "huge pressure" on racecourse executives across Britain, and reiterated his concern that the white paper in its current form would have a major detrimental effect on the money flowing into the sport.

A Racing Post investigation published this week questioned the calculations employed in the Department for Culture, Media and Sport's impact assessment on racing's finances, concluding the cost to the sport could be three times the figure quoted.

The range of lost revenue to the sport in the first year of implementation provided alongside the white paper ranged from £8.6 million to £14.9m.

But gross gambling yield on horse racing is extremely reliant on high-staking punters and those over the age of 55, two groups that are likely to be disproportionately affected by the more intrusive levels of affordability checks proposed by the government and the Gambling Commission.

In addition, a change in the way media streaming rights are are distributed to the courses, moving from a per-stream calculation to a turnover model, means the checks could have a much greater impact than originally estimated.

"We are hugely concerned about the impact of affordability and the impact of the white paper as written, on the funding and the finances of racing, and how that affects huge income streams for the sport in general," said Derby.

"As we've said in the past we pass 100 per cent of our betting-related media rights revenue to prize-money, so if that figure is impacted by affordability then, like with every racecourse, that puts huge pressure on what we can afford to invest in prize-money and back into the sport.

"We will be looking towards 2024 in terms of seeing what the forecasts are for returns from levy and media rights in doing our calculations for prize-money."

York passes "100 per cent of betting-related media rights revenue to prize-money"Credit: Edward Whitaker

Derby was full of praise for racing's united effort in presenting a single clear message to the government.

He added: "I think everyone in the sport is aware of the impact on betting on racing and the impact that would have on the health of the sport; on prize-money and on the distribution of the income streams throughout the sport.

"It's a huge concern and we have been been very supportive of the racing industry, with the BHA taking the lead, lobbying on this. We've lobbied on a local level about the impact of the white paper to our local MPs of all political parties and they have been very supportive.

"We think the white paper poses a huge amount of threat to the sport going forward."

Derby said the effects of affordability checks being carried out by betting operators in advance of the changes proposed by the government and the Gambling Commission are already showing up in worrying financial figures.

Derby said: "We're aware that the Levy Board and the media rights companies saw a reduction in activity during July and August – I haven't seen the September figures yet – so racing is feeling the effects of affordability, the cost of living crisis etc on the activity and engagement in the sport, and that's a worrying trend we all need to be cognisant of."

The Gambling Commission's public consultation on a wide range of questions surrounding affordability checks closes in under a fortnight.

To complete the Gambling Commission's consultation on affordability checks, visit racingpost.com/consultation and follow the instructions.

The Racing Post also wants to hear from you: What has been your experience of affordability checks since the white paper was published at the end of April, and what do you think of the government's proposals? Have affordability checks affected your betting behaviour?

It's a chance for your voice to be heard. Email the Racing Post at editor@racingpost.com with the subject 'Affordability checks' to share your experiences, your thoughts about the government's proposals, and your contact details.

The Affordability Files:

Part one: 'By the time our punters get to the third race on the opening day of the Cheltenham Festival, we'll be asking them for their P60s' 

Part two: 'The elephant in the room' - are frictionless affordability checks a flight of fantasy? 

Part three: how the white paper miscalculated the impact of affordability checks on racing 

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