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Found this a very interesting article, was impressed that they increased prize money in second half of season due to better results than forecast,
scotia
RECORD-BREAKING figures for betting income for 2007-08 were published by the Levy Board on Wednesday, but with a renewed wealth warning from new chief executive Douglas Erskine-Crum.
Payments by bookmakers and the Tote came in at £116.5 million, influenced to a significant degree by an injection of £15.8m from Ladbrokes' high-roller punters.
The year-on-year increase of 17.4 per cent is the biggest since the switch to a gross-profits calculation produced a 38 per cent leap in the yield for 2003-04.
Levy Board spending for the financial year was also at an historical high, hing £111.85m, which included a total of £9.39m for pension provisions on last summer's formation of the BHA.
As a consequence of the higher than forecast yield, the Levy Board has repaired cuts to prize-money by adding around £6.7m in the second half of the year.
The new prize-money pool for 2008, £56.2m, equates to a calendar-year equivalent of £62.5m, which the board has agreed to maintain for the next two years, provided the money is there to fulfil the promise.
However, Erskine-Crum yesterday reiterated the warning he made at the Racehorse Owners' Association annual meeting last month.
“Unless there is a satisfactory long-term agreement between the bookmakers and racing, and unless the issues and relationships between them are sorted out, we'll be staring at a prize-money pool that's nearer £50m,” he said.
“Everything depends on future levy schemes being sustained at current levels.”
The importance of a long-term agreement was emphasised by Levy Board chairman Rob Hughes, who said: “It would also enable other major issues to be properly addressed, in particular the continued decline in betting on horseracing, both in absolute terms and as a share of the overall betting market.”
However, both conceded that finding the right route to a long-term solution was not proving easy.
Following last year's levy determination, sports minister Gerry Sutcliffe asked the All-Party Racing Group to oversee the levy review process, while the Levy Board was charged with implementing as much of the latest Donoughue report on the future funding of racing as possible.
Erskine-Crum revealed that one group was examining issues such as the duration of a levy agreement, dispute resolution and representation on the board, while a second was looking at negotiations between the bookmakers and racing on the basis of the next levy scheme, starting in April 2009, and a long-term deal.
However, he admitted: “Progress is quite difficult because of the ongoing court case between Bags and TurfTV, and although it's too early to say for certain, it will be hard to resolve everything before our next levy scheme deadline of October 31.”
For the first time, the impact on the Levy Board of bookmaker resistance to TurfTV has been revealed.
It is reflected in the balance-sheet reference to debtors of £25.8m, compared with £3.8m the previous year, which finance director Stephen Haywood explained was largely caused by major bookmakers cutting their payments on account.
He suggested that the action had come about partly through nervousness about the prevailing situation and partly in protest at the extra cost of the new betting shop pictures service.
He added: “By the end of our financial year, payments on account had fallen by £24.1m, which is reflected in the accounts, but since by law the bookmakers have to pay, the majority of the balances have since been paid.”
After recording operating deficits of £9.9m and £87,000 for the last two years, when the levy seemed to heading for the exit door, the board turned in a surplus of £6.9m for 2007-08, largely thanks to the one-off telephone credit betting windfall.
Reflecting on his first four and a half months in office, former Ascot chief executive Erskine-Crum said: “Perhaps not surprisingly, it's more complex than I anticipated and has taken me more time to appreciate the processes and the intricacies of the relationships, but it's been very useful already knowing practically all the major players.
“I wouldn't want anyone to think I was following an agenda because of my background at Ascot. You do the job you're in, so if I followed a particular path at Ascot, I now follow a different path.
“That's acceptable and understandable, because my job has changed. And it's very important, like it or not, that the independent members of the Levy Board and the chief executive are, as it says, independent.”
LEVY BOARD ANNUAL REPORT 2008 – MAIN POINTS
>>46th Levy Scheme (2007-08) income from bookmakers UP 18.6%, from £90.5m to £107.3m (due largely to £15.8m impact from high-roller punter); from Tote UP 5.4%, from £8.7m to £9.2m, making total yield from leviable turnover for year UP 17.4%, from £99.2m to record £116.5m, being 108% up on nine years previously, and 45.8% up on 2002-03, before GPT basis was introduced for levy payments. Increase of 17.4% was annual highest since 38.5% on introductionof GPT basis
>>Total revenue for 2007-08 UP 11.3%, from £106.514m to £118.514m
>>Total expenditure UP 0.8%, from £110.995m to record £111.850m
>>Total prize-money contribution for owners (£56.647m) DOWN 13.4%, and DOWN from 61.6% to 50.6% as percentage of total spending
>>Cost items included £879,000 (from £734,000 in 2007 and £267,000 in '06) for contribution to Channel 4 Racing
>>Administration costs UP 7.7% to £3.631m, but steady at 3.2% of
expenditure
>>Integrity costs (exc BHA pension costs), including services of newly
independent HFL Ltd, UP 8.8% to £26.137m, as bigger fixture list increased
refunded fees and RaceTech costs. Loss of income from HFL third-party
services (£4.8m in 06-07)
>>Integrity costs alsoincluded £6.45m to fund Jockey Club-BHB pension fund on transfer to BHA, and £2.92m for future pension provision
>>Sale of HFL in December 2006 for £20.3m had net effect of adding £3.3m to income and expenditure account and £17m to cash balances; £6.45m for BHA pension came from latter, with rest ring-fenced for special projects, still to be determined, with earned interest going to BHA development fund
>>Interest-free loans totalling £12.6m made to racecourses for capital
projects, including Newmarket (£2m), Ayr (£1.5m), Huntingdon (£1.3m),
York (£1m), Haydock (£0.9m), Wetherby (£0.8m); further £19.9m in grants for racecourse improvement schemes
