BHB Chairman, Peter Savill insisted at a press conference today (1st Nov 1999) that because the bookmakers’ final offer apparently failed to match the Levy Board’s own assessment of what the bookmakers should have paid for the levy, the matter should have been referred to the Home Secretary for determination.

Mr Savill said the decision to impose a settlement on racing last Friday appeared to have been unduly influenced by the Home Office’s desire to avoid a referral. He added: “”There are clear indications that the three government-appointed members thought that the betting industry should have paid more.””

Mr Savill called on the Levy Board Chairman to answer five questions publicly:

1. What was the figure that the three government-appointed members decided in September could and should be paid by the bookmakers for the levy?

2. Why did the Levy Board Chairman not honour his public promise to advise the parties to the negotiation what that figure was?

3. Why did the Levy Board accept a lower figure than the three government-appointed members had agreed should be paid?

4. Why did the Levy Board not refer the matter to the Home Secretary if the offer was less than the three government-appointed members believed should be paid?

5. Why did the Levy Board Chairman make no attempt to get the betting industry and the racing industry to sit round the negotiating table together to agree the figure that he was looking for?

The full text of the BHB Chairman’s statement is as follows:

BHB Press Conference on the Levy

Monday 1st November 1999

Introduction by BHB Chairman, Peter Savill
The decision of the three government-appointed members of the Levy Board on Friday to accept an offer from the Bookmakers’ Committee which, by their own admission, was less than all three of them would have liked is, quite simply, unacceptable to Racing.
It is now more than two years since we began work on the Financial Plan. It argued coherently that Racing needed £105 million per year in additional funding and that £80 million per year should come from an increased percentage of betting turnover. The Financial Plan highlighted three inescapable facts:

1. That British Racing gets only 1.1% of betting turnover back into the sport compared to 4.4%-15% in other major countries.
2. That betting office overhead is a major cause of the problem, with the British betting industry taking out 15% of turnover compared to 5%-10% in other major countries.
3. That the Levy system favours the betting industry, leaving the racing industry to look to the Levy Board to ensure that the betting industry pays a fair price for the product.

We took our arguments to the Government throughout 1998. They asked us many questions all of which we answered. But just when we thought we were going to find out whether they accepted our arguments, they passed the buck to the Levy Board on the grounds that to pass judgement on the Financial Plan could be seen as interfering in the upcoming levy negotiations.
So for the last year we have been laying before the three government-appointed members of the Levy Board the merits of our case. We’ve gone to great effort and expense to produce in depth analyses of the impact of prize money on the industry, on the needs of marketing and the problems of the British breeding industry – three areas that account for over 90% of the funding shortfall.
There is an inference in an article in the media this morning that the BHB was unwilling to negotiate a settlement at any figure lower than £80 million. This is untrue. We have consistently maintained, with justification, that £80 million represents the true needs of the racing industry, but I made it clear to the Chairman of the Levy Board on a number of occasions that we fully accepted that this sum could not be achieved through the Levy this year – and that we were willing to negotiate a settlement that was fair and reasonable.
We were promised an open and transparent debate and a negotiation which would focus on analysing the needs of racing and the capacity of the bookies to pay. On 17th August on Channel Four at York Robert Hughes, Chairman of the Levy Board said – and I quote: “”Literally as we speak, Rodney Brack and the directors of the Levy Board are looking at an objective analysis of what the bookmakers can and should pay for the levy. I’m not in a position, in all honesty, to tell you yet. But mark my words, when we’ve done that analysis, it will be open for everyone to see it – the bookmakers, Peter Savill, everyone else – and that is the figure we will be proposing””. They apparently reached their decision by early September.
I wonder what the figure was …. it will be interesting to find out. Was it indeed £4.7 million plus £1.4 million if turnover goes up by 2% plus £1.9 million for marketing for one year only with strings attached? I doubt it somehow. It was a much higher figure.
Let’s analyse the settlement the three government-appointed members of the Levy Board imposed on racing last Friday and see what the implications of their decision are for the future finances of racing:

1. They decided racing only needs an increase from 1.1% of betting turnover to 1.2%.
2. They decided owners should lose 76% of their investment in keep and training costs instead of 78%.
3. They decided we have enough stable staff and that they are perfectly adequately paid.
4. They decided racing only needs to spend another £1.9 million on marketing a year when Michael Humphreys & Partners, a leading sports marketing company, estimate the figure at an additional £30.63 million over the next three years.
5. They decided breeders prizes should be maybe an extra few thousand a year when we have shown that unless we inject around £10 million a year our breeding industry will suffer a further serious decline.

And what do they think of the betting industry’s capacity to pay? Their very own survey confirmed what we have been saying for a long time. That betting industry profits have risen from a claimed £100 million in 1995 to around £350 million in 1998, a rise of almost £250 million since the last levy deal. So how much of that £250 million do the Levy Board think they should pay to the industry that brings 88% of their daily punters into the shop? A meagre £6.6 million.
Make no mistake. The decision by the three government-appointed members last week was outrageous. What happened to all the promises and the rhetoric about transparency?
Read the Levy Board Chairman’s statements last Friday. In the official Levy Board statement he said: “”Nobody’s interests would have been served if the matter had been referred to the Home Secretary for determination. The Home Office had already made it plain that they viewed such an outcome with dismay …. and this was a factor in our deliberations””.
To the Racing Post he said : “”Most people will think it’s not enough and I admit it’s not as much as the three independent members would have liked but we were very keen not to go to the Home Secretary””.
Well if it’s not as much as the three government appointed members would have liked, it is therefore presumably not as much as they thought the bookmakers should have paid. And if it’s not as much as they thought they should have paid, they surely had an obligation to refer it to the Home Secretary with a firm recommendation of what they thought they should pay.
The BHB is also very unhappy with the way in which the imposed settlement was conducted, and I have today written to Mike O’Brien at the Home Office to ask for an urgent meeting to discuss this and other matters pertaining to the Levy.
The Levy Board has much to answer for and I have written to its Chairman asking him to answer the following questions publicly:

1. What was the figure that the three government-appointed members decided in September could and should be paid by the bookmakers for the levy?
2. Why did the Levy Board Chairman not honour his public promise to advise the parties to the negotiation what that figure was?
3. Why did the Levy Board accept a lower figure than the three government appointed members had agreed should be paid?
4. Why did the Levy Board not refer the matter to the Home Secretary if the offer was less than the three government appointed members believed should be paid?
5. Why did the Levy Board Chairman make no attempt to get the betting industry and the racing industry to sit round the negotiating table together to agree the figure that he was looking for?

I feel deeply sorry for the racing industry which was depending on the Levy Board Chairman to protect it from abuse of the betting industry’s monopoly position and from the flawed process which puts the power in bookmaking hands.
The Racing industry, the public and the Government are entitled to insist on the transparent open and accountable system which the Chairman of the Levy Board promised.
We insist on a body such as the Levy Board being accountable and will not sit back and allow it to act as an autocratic and non inclusive quango.
The BHB today agreed unanimously to call on government to replace the levy with a more commercial mechanism within the next two years. Not only is the structure of the levy system unfair but its implementation clearly also leaves much to be desired. We have no wish to subject ourselves each year to this charade and its funeral is unlikely to be well attended.
We must continue to encourage government to remove itself from our industry as quickly as possible so that we can free ourselves from the shackles of the Levy. There’s no point sitting in the doctor’s waiting room if the doctor never attends his surgery.