Paddock politics: why racing gets a leg up

From the Cheltenham super-spreader festival, to the heroic hosting of vaccination centres, to fellow-jockeys Hancock and Harding overseeing Track and Trace, the connections between the worlds of horse racing and politics run deep. Let’s take a look at the runners and riders:

Sport of Kings

Horse racing is a hugely valuable industry with estimates putting the economic value at almost £4bn per annum. That value is derived from a range of activity: the breeding, sale and owning of horses, the prize money to be made by runners, the hospitality trade around racecourses and, of course, the gambling.

Money and influence drips from this sport and where there’s influence, there are breaks to be had if you are moving in the right circles. Look at the Jockey Club, which was worth £216m in 2019 and whose leadership boasts quite a pedigree, including alumni of Britain’s best banking jobs and members of minor aristocratic families, as well as political connections such as Baroness Dido Harding (of Test and Trace infamy), and the late Rose Paterson (wife of MP Owen). Jockey Club Racecourses (JCR) runs 15 major racecourses, as well as the National Stud and a range of ancillary racing enterprises. This makes it a powerful voice in the industry.

Cheltenham Festival

Last March, despite misgivings that mass gatherings were by then extremely ill-advised, the 2020 event went ahead, boasting that it was offering the “highest” hygiene standards. The festival’s 250,000 visitors are estimated to spend £100m annually in local hotels, bars, clubs and restaurants, so you can see why there might have been pressure to let it go ahead. But pictures from the trackside showed there was none of the social distancing to which we are now accustomed and, anecdotally, case after case of Covid-19 in the weeks that followed all had the common factor of the festival. Irish trainer Noel Meade, celebrity attendees such as comedian Lee Mack, racecourse bar staff and racing journalists all reported the virus. Mass gatherings were banned a few days later.

 A fact check by the Racing Post refuted claims that the meet had any responsibility for a spike in cases. We can’t really judge that claim, given that there was no Track and Trace in place at that point, not even the current overpriced carthorse of a system.

Cheltenham Festival will run again in March 2021 but without a live audience – that is unless something changes between now and then (watch this space…!)

Cheltenham Festival 2020 in Numbers:

TicketsMore than 250,000 over 4 days, including the usual large Irish contingent who usually make up around 30 per cent of ticket sales
Covid-19 casesAfter the festival, the Gloucestershire NHS Trust had recorded 125 coronavirus deaths, twice as many as nearby Trusts in Bristol, Bath and Swindon
Prize money£4.6m across 28 races. The big prizes are the Queen Mother Champion Chase (£400,000) and the Gold Cup (£625,000)
Bets placedPrevious years have seen around £390m placed on the festival’s races (on and off track)

Business’s Best Mate

Horse racing is right up there with golf as the home of soft power. Corporate packages are big business for racecourses and provide an elegant opportunity to dress up, have a flutter and develop useful relationships.

In fact, in the 2019-21 session’s register of MPs’ interests, 17 MPs declared hospitality at racecourses, mostly provided by the Jockey Club, track operators or the betting industry. Football clubs also provide similar VIP tickets, but not in the same quantities. Beneficiaries of a day at the races included cabinet ministers Liz Truss, Priti Patel and Therèse Coffey, but most notable are the relationships between Philip Davies and Laurence Robertson and the industry they often speak out for in Parliament. These two have been wined and dined over recent years by a range of donors including William Hill and GVC Holdings ‒ the parent company of betting brands such as Coral, Ladbrokes and FoxyBingo.

GVC recently rebranded as Entain PLC, headquartered in the Isle of Man, and alongside this bland portmanteau of a name they offer equally bland platitudes about looking forward to “reaching new audiences” while offering “player protection.” Lobbying plays an important role in establishing whose definition of the balance between the two concepts holds sway. Lucky for GVC that Phillip Davies was not too busy with his duties as an MP to spend 124 hours advising them on responsible gambling through Autumn 2020, earning himself over £50,000 in the process.

Political Animals

MPs seem to spend quite a bit of time talking about all things equine. There are All-Party Parliamentary Groups (APPG) on Horse Welfare, Racing and Bloodstock as well as Gambling-Related Harm. And our friends Philip Davies and Laurence Robertson are former and current chair respectively of the Racing and Bloodstock group. Do chairs of other APPGs receive as much hospitality to get insights into their interest areas? Robertson (in whose Tewkesbury constituency Cheltenham racecourse is located) spent each day of the 2020 Festival with a different corporate host.

The equine business often dominates its local area. Newmarket MP Matt Hancock has received donations from numerous horsey people, including regular gifts from Tattersalls, the racehorse auctioneers, as well as local horse owners and breeders who have given to his constituency office and his 2019 leadership campaign. Hancock’s office must be a thoroughbred of a workplace, as it was sponsored to the tune of £60,000 by generous donors and yet he still needed to claim for over £16,500 of office costs.  

Lucrative Sponsorship

Cheltenham Festival’s race sponsors broadly fall into four categories: a long list of gambling firms – SkyBet, UniBet, Racing Post, Coral, Betway, Paddy Power; high-end finance; construction, such as arch Brexiteers JCB, plus some booze companies thrown in for Ladies Day and St Patrick’s Day.

The UK’s biggest race is of course the Grand National, held at Aintree in April. It’s a veritable goldmine for the bookies, since for many people it’s the one socially acceptable opportunity to have a flutter. Since 2017 the race has been sponsored by health firm Randox, who also partner ‘Glorious’ Goodwood and support one of the final day’s races at Cheltenham Festival. And this is where it gets interesting, because Randox is advised by former Northern Ireland minister Owen Paterson MP (who has links to the Jockey Club and is one of those regular recipients of freebie tickets), and Randox is the government’s main partner for Covid-19 testing, with an astonishing near-half a billion pounds in contracts to date, awarded in haste and bypassing procurement norms.

Unless you were an occupational health manager, you wouldn’t perhaps have been particularly interested in, or aware of, Randox’s services, which seem a little niche for a racing audience ‒ but this positioning of the company in the playground of power-brokers has certainly paid off. Randox celebrated processing its 10 millionth coronavirus test in mid-February and you might wonder what further opportunities may be still to come, given talk of rapid testing to permit access to events in future.

In early January it was reported that a number of racecourses would be offering their venues as mass vaccination centres. As large hospitality centres they are amongst many potential venues, but of the list of 106 centres, seven are race courses, compared with just ten football stadia, although there’s one of those in almost every town across the UK.

What an opportunity to showcase companies’ wares and to boost racing’s image! Racing itself has still been going ahead – necessitating closure of the vaccination effort for those days. There may be nothing to see on vaccination days outside, but, once inside, the spacious conference suites and the need for room dividers provide a perfect place for an unmissable display of logos and branding.

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Gambler’s Flutter

An innocent little flutter and horse racing go hand in hand, but gambling is both the lifeblood and the poison running through the industry. In 2019, £227m was bet on horses at the track and £4bn “off course.” This represents a drop of 20 per cent in 10 years. (Nowadays more money is made via football betting, so it’s not all bad news for the bookies). Gross gambling yield in the UK (inclusive of the National Lottery) increased from roughly £8.4bn in 2011 to approximately £14.4 bn in 2018 and betting represents the largest proportion of this figure. 

However, the gambling industry is constantly looking for ways to innovate their business. New products such as online betting accounts and Fixed Odds Betting Terminals are easy and addictive, and have unleashed a pandemic of problem gambling, putting pressure on the bookies to help us “gamble responsibly” as their advertising counsels. In 2020 the Betting and Gaming Council came into being ‒ a super-lobby created by the Remote Gambling Association and the Association of British Bookmakers joining together to better represent the industry. The Council is advised by Laurence Robertson (him again) for a fee of £2000 per month for ten hours of his wisdom. Their CEO is Michael Dugher, a former Labour MP who became CEO of UK Music after losing his seat, then quit two years later for this job. The revolving door in action! The spider’s web of links between the gambling industry and the gambling addiction charities are for another article.

For decades the government has had its own horse in the world of turf accountancy in the form of the Tote. The state bookmaker was set up in 1928 by Churchill in an attempt to neutralise the problem of the unscrupulous trackside business practices familiar to readers of Brighton Rock. The Tote was privatised in 2011 and sold to BetFred, which has grown to become a formidable betting brand over the subsequent decade. That sale was overseen by then-Junior Sport Minister (and current anti-corruption champion) John Penrose, husband of Dido Harding. More recently the Tote was sold on again to Alizeti Capital in 2019. Alizeti have provided hospitality at Ascot to Esther McVey MP – wife of Phillip Davies MP (remember him?) – and are advised by Helen Grant, MP for Maidstone.

The Jenrick Connection

In 2019 Elmbridge Council turned down an application by the Jockey Club to develop part of the Sandown Park racecourse. This would include a luxury hotel and over 300 dwellings to fund an upgrade of facilities, plus a few community bonuses thrown in for good measure, in the form of a nursery and a new walking route from Esher station.  Despite these sweeteners, the local community was far from impressed by the prospect of so much inappropriate housing being added to a relatively small town. The decision was appealed by the Jockey Club and will now rest with the Secretary of State for Housing Robert Jenrick, once he has digested the report by planning inspector (David Prentis, whose recommendation on Westferry Printworks was famously overruled by Jenrick in 2020).

The Jockey Club’s finances are smarting from the refusal of a similar development proposal at Kempton Park. A less ambitious plan is now under consideration. Building housing around a sports facility has become something of a go-to method of financing an upgrade. Arsenal’s Emirates Stadium was partly funded by house building, including converting the iconic art deco East and West Stands into highly desirable apartments.
Here in Devon, Exeter City Football Club relinquished land behind their stadium which the council sold to a housing developer to part-fund improvements to St James’ Park.

With many friends, sponsors and patrons in the construction industry it’s no wonder racing is taking a similar path.


Opportunities and Threats

Times are not easy for horse racing as an industry. Without decent prize money, you can’t attract the best horses to racing events. TV rights deals, entry fees and sponsorship of races and events all contribute to the fund. But the bulk of the prize money comes from gambling, via the Horserace Betting Levy Board (HBLB), a statutory body which levies 10 per cent on all bookmakers’ revenues over £500,000. HBLB invests the levy back into the sport: a small amount in equine research and the running of the HBLB, and the bulk into prize money – in 2019 a purse of £60m.  

In its annual report, the HBLB listed a pandemic resulting in cancelled racing amongst their risks, though the potential financial impact was not considered to be as major as difficulties in forecasting revenues or the consequences of regulatory changes, both risks linked to campaigns against the prevalence of FOBTs. Perhaps the Covid-19 experience has shown that assessment underestimated the financial damage done by 12 months without racegoers.

There is growing disquiet amongst some owners about the level of prize money in UK racing. Compare Gold Cup’s £625k prize pot to the prestigious Prix de L’Arc de Triomphe at €5m (£4.3m) or the new kid on the block, the Saudi Cup, with a prize fund of $20m (£14.37m). (As an aside, the winner of the inaugural race was trained by John Gosden, one of Matt Hancock’s donors).

Photo by Gene Devine on Unsplash

For some years now the major bookies have been offering virtual horse races to fill the gaps between live racing. These operate as a lottery with both line-up and winner computer-generated, so there’s no studying the form, but for the punter simply interested in the bet it’s an alternative product without the costs of the real races. Could it provide a threat to live racing events?

Meanwhile horse racing is one of thousands of industries negatively affected by Brexit and the shortcomings of the new UK-EU trade agreement. Previously racehorses benefited from freedom of movement under the Tripartite Agreement. Given that the three major racing venues are UK, Ireland and France, movement across borders is vital to the UK’s position and participation in the industry. There is doubtless much pressure from influential voices to resolve this problem fully.

So there’s the form and the starting line-up, and with a field like that, is it any wonder the going is pretty good for horse racing. The industry has its challenges, but it also has powerful friends and deep pockets. Cheltenham may not get its break but the Grand National is scheduled for 10 April. Place your bets on any forward movement on the current lockdown roadmap.