Racing: Turf's funding sunk by European Court

The future funding of horse racing and the British Horseracing Board's blueprint for the "modernisation" of the sport's finances have been completely swept aside by the European Court of Justice in Luxembourg.

The future funding of horse racing and the British Horseracing Board's blueprint for the "modernisation" of the sport's finances have been completely swept aside by the European Court of Justice in Luxembourg. The court's ruling, that bookmakers can use racecard information from the BHB's database without payment, is deeply worrying for racing's ruling body and embarrassing for it's former chairman Peter Savill. It also has important implications for other sports trying to cash in on its fixtures data, principally football.

For the BHB it is rather like falling at the last fence. The original claim brought by the BHB concerning the publication by William Hill of race data on its website was upheld at the High Court in London. Then the Court of Appeal agreed in principle with the findings that William Hill had infringed the BHB's database right, but acknowledged that database rights are only recently introduced and referred a number of questions to the European Court of Justice for guidance.

Even then, the court's ruling runs contrary to the Advocate General's Opinion published in July this year. The ECJ have given a much narrower than expected interpretation of the database right relied upon by the BHB.

The BHB held a board meeting yesterday but afterwards the only, seemingly stunned, response, from its chief executive, Greg Nichols, was: "Following today's obvious setback in one area of our rights, BHB remains absolutely focused on achieving British Racing's commercial objectives."

The victors had rather more to say. David Harding, chief executive of William Hill, said: "The BHB has long wanted to end the levy and move to a commercial relationship with us where they charge for their products, but they don't have much of a case now as they don't have anything to sell to us.

"We are just producing what is already out there in the public domain. It costs the BHB £4m to run the database of jockeys' names, trainers' names, race meetings etc. They get £100m from the Levy each year, and they hoped what they would get would increase through a commercial agreement. I suspect they will now be arguing to keep the Levy."

The case raises serious questions as to how horseracing will continue to be funded. The BHB has long campaigned for the statutory Levy Board to be abolished and to be replaced by the licensing of data on a commercial basis. The Government has accepted this and the Levy Board had been expected to close in September 2006. Now that the ECJ has curtailed the scope of protection conferred by the database right, a reprieve for the Levy Board appears the most likely fallback, otherwise the BHB will have no mechanism with which to extract income from bookmakers.

In winning the case, William Hill have also unintentionally managed to assist their bitter rivals the betting exchanges, as the BHB had planned punitive data-rights fees on exchanges that might have forced some operators out of business.

Similar issues are being faced by football as a result of the ECJ's ruling, except that they have fared even worse. The ECJ has held that the fixture lists will be protected by the database right only where the maker can show that it had made a substantial investment in creating the database, separate from the investment required to create the data itself. This is likely to seriously undermine Football Dataco's business model.

It also has implications for other industries with bases on the internet. Businesses which simply rely on data coming to them and then compile it into a database, for example estate agents, will find it more difficult to protect that data.