Horserace Betting Levy Board

The Horserace Betting Levy Board (HBLB) has budgeted to contribute £66m to prize money in 2023, below the comparable £70m initially budgeted for 2022 but £7m more than for each of the pre-Covid years of 2018 and 2019.

The Board has previously signalled that in 2023 it would need to scale back its significantly higher contributions of 2021 and 2022, in part because next year it will repay its first instalment of the Government’s £21.5m Sport Survival Package (SSP) loan. It agreed to take this loan after representations from Racing in 2021 as part of HBLB's support for the sport in its recovery from the pandemic. It was agreed at the time that the loan repayment programme would necessitate a reduction in expenditure in future years.

The 2023 budget has been agreed in recognition of challenges still facing the sport as it continues to recover from the effects of Covid-19. This has been made possible by the Board having carefully husbanded reserves over a number of years, which continue to be drawn upon but now to a more limited extent than in immediate recent years. HBLB expects to run a deficit budget for the third consecutive financial year in 2022/23 with a cumulative financial cost exceeding £30m in that three-year period.

However, in agreeing the £66m for next year, the Board has noted that data provided by major bookmakers has shown a fall in horserace betting turnover and gross win in recent months. In light of this, the Board has agreed to provide prize money at 100% of the values in the Ratecard-Plus system from 1 January to  31 August 2023, a period that comprises the sport’s Programme Books 1 and 2, but a decision on the amount to be provided for the period from September to December 2023 will be taken in around May 2023 in the light of the outturn of Levy yield for the year ended 31 March 2023.  On the assumption that the Board maintains its contribution at 100% of the levels in the Ratecard-Plus system for the September to December 2023 period, the Board’s contribution for the year is likely to be around £66m.

Paul Darling, Chairman of HBLB, said: “Based on current assumptions, we intend to provide more for prize money in 2023 than in the years before Covid which we are very pleased to do. Nevertheless, as we have said previously, the scale of our additional contributions in the most recent years during and since Covid cannot continue indefinitely.

“As well as racing and betting having to deal with the aftermath of Covid, the economic downturn will create challenging conditions in the year ahead. The Board therefore took the sensible step of supporting Racing’s proposal for Programme Books 1 and 2 to allow for planning during the first two thirds of the racing calendar, while agreeing to look again at the position in May 2023. In the event that betting revenues deteriorate to a significantly greater degree than anticipated, the position will be reviewed sooner.”

Notes

1. The Board agreed the 2023 contribution following a joint proposal submitted by Racing organisations (BHA, Thoroughbred Group and RCA) and then taking into account 2021/22 Levy yield and the latest data for the 2022/23 year.
2. In 2022, excluding the additional grants arising from the SSP loan, HBLB expects to contribute around £71m to prize money, comprising £60.6m Ratecard-Plus, £6.0m Appearance Money Scheme, £3.5m Great British Bonus and £0.9m Divided Race and Transitional Funds. Including SWSP prize money grants, the total estimated prize money contribution is some £74m.   
3. The main component of the prize money budget is the Ratecard-Plus system (£53.8m), the same system introduced in full from 2022. Under this system, the sum that a racecourse receives from HBLB for each race is linked directly to the racecourse’s own contribution to that race.  Every race class and type has its own calculation formula, which has been developed by the BHA in consultation with its stakeholders. Every race will see HBLB pay a proportion of the Minimum Value and then a percentage of prize money contributed by the racecourse above that sum, up to a specified level.
4. The rate card allocation to prize money is intended to split HBLB funding c. 60% to Flat racing and c. 40% to Jumping in accordance with the turnover generated by each code. This split will be reviewed prior to 2024 to take account of recent outturns and other relevant factors.
5. At Racing’s recommendation, the Appearance Money Scheme has been scaled back substantially, being allocated £0.9m (2022: £6.9m), with other funding targeted specifically towards Pattern, Class 2 and Class 3 races. Funding will be targeted specifically towards Group 3 and Listed races on the Flat, and Grade 1 and 2 Novice Hurdles and Chases. Significant support will still be provided to lower classes of races via a per-race payment mechanism in addition to the rate card payments. In total, these areas of spend comprise £7.9m.
6. The Great British Bonus Scheme will continue to receive £3.5m (2022: £3.5m) and Divided Races will be initially budgeted at £0.8m also as per 2022.
7. A sum of £1.3m has also been allocated for additional prize money for certain January to March Jump fixtures, which is a variation on the Board’s long-standing Fixture Incentive Fund which saw HBLB make a cash payment to racecourses as an encouragement to stage these fixtures. For ease of comparison with earlier years, this sum is not included in the initially budgeted £70m (and likely actual £71m) for 2022 and the £66m for 2023 referred to above.
8. Raceday Services Grants towards regulation and integrity costs will continue to be provided to all HBLB Criteria fixtures, with a slightly reduced budget compared to 2022 to take account of the SSP loan repayment.

For further information please contact HBLB Chief Executive Alan Delmonte on 07931 701536