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Wed, 21 October 2020

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Closing betting shops won’t help the fight against Covid, but it will hurt horseracing and the economy at the worst possible time

Closing betting shops won’t help the fight against Covid, but it will hurt horseracing and the economy at the worst possible time

Credit: PA Images

Michael Dugher, Chief Executive, BGC and Nick Rust, Chief Executive, British Horseracing Authority | Betting And Gaming Council

5 min read Partner content

The Government must let betting shops go about their business safely for the sake of the economy and the future of great British horseracing.

This week SAGE, the committee of scientific experts advising the Government on how to tackle Covid, acknowledged that High Street retail has a “very minimal impact” on the virus’s reproduction rate.

So it was somewhat surprising when it emerged that the Government was including betting shops in the list of businesses being forced to close in so-called ‘Tier 3’ regions where the resurgence of the virus is most severe.

At the outset, we want to make it clear that both the betting industry and British horseracing acknowledge the huge pressure that ministers are under at this time of national crisis. 

Both our industries have played their part by championing the highest possible anti-Covid measures in betting shops and at racecourses and training yards, and we will continue to do so until this virus is defeated.

Nevertheless, it is also incumbent upon us to point out where we think the Government could better use evidence and science, rather than optics, to make its decisions and for it to be aware of the significant financial consequences of them.

The first part of the country to enter Tier 3 was the Liverpool City Region, where 350 betting shops employing 1,700 people have been ordered to close their doors. Between the betting levy and the media rights payments that shops pay for the right to show live racing, they generate £12.5m a year for racing.  

At a time when the sport is already suffering financially as a result of the ban on spectators, choking off this income stream is disastrous.

Next up was Lancashire, which has 196 shops employing 975 people and contributes £6.6m a year to the sport. Greater Manchester, which has 430 shops and 2,100 staff, has also been lined up for Tier 3. Their annual contribution to the racing industry is around £13m.

In total, well over £200m a year flows directly from the betting industry to horseracing. At a time when the sport is already suffering financially as a result of the ban on spectators, choking off this income stream is disastrous.

As the Treasury tries to deal with the economic consequences of the pandemic, it’s also worth remembering that the betting and gaming industry employs 100,000 people and pays over £3bn a year in tax.

British Racing, meanwhile, as a £4.1 bn industry generates over £300m a year directly in taxation, employs 17,400 FTE workers and supports tens of thousands more jobs in the wider rural economy. With the Government needing all the money it can get, these are not insignificant amounts.

The closure of betting shops is even more baffling when you consider that they are now being lumped in with hospitality and leisure businesses, alongside the likes of pubs and gyms.

The clue is in the name: betting shops are shops. And just like other types of retail, they should be allowed to remain open, while of course continuing to observe the necessary anti-Covid measures.

At the Betting and Gaming Council, we will continue to make the case for betting shops and casinos, which also observe strict anti-Covid guidelines and have offered to give up selling alcohol, to be excluded from the Tier 3 restrictions.

While the evidence that they contribute to the spread of the virus is negligible, the proof that they are major contributors to the economy is overwhelming.

The British Horseracing Authority is under no illusions as to what’s at stake.

For the sake of our industry’s long-term future, it is absolutely vital that the Government listens. Apart from two successful test meetings at Doncaster and Warwick, spectators have not been allowed to watch racing in the flesh since March.

With the industry facing a further six months without spectators, that is potentially £300m in lost revenues.

That means the ‘Behind Closed Doors’ model for horseracing is being sustained by revenues generated – directly and indirectly – from betting activity on British racing. If income from betting to racing is also jeopardised by the closure of betting shops, it puts further significant pressure on the emergency business model the industry has been forced to adopt.

There has always been a symbiotic relationship between betting and racing. We need each other.

Without the return of spectators by next spring, and with the pressures facing income from betting, the threat of significant contraction in British racing and undermining of its world-leading international position is real. 

Inevitably, this will mean the supply chains and jobs which British racing supports across the wider rural economy will also suffer, further damaging the Treasury’s ability to bounce back from the impact of the pandemic.

Our plea to the Government is simple: Take an evidence-led approach to the crisis, rather than one that too often looks like it is being made up as we go along and where ‘optics’ trump the science.

Don’t punish betting shops – or casinos - for a rise in Covid cases which they have not contributed to. Instead, let them go about their business safely for the sake of the economy and the future of great British horseracing.

Michael Dugher is Chief Executive of the Betting Gaming Council, and Nick Rust is Chief Executive of the British Horseracing Authority

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