Factions begin battle for the fractions

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The Independent Online


The Chancellor devoted just 86 words of his Budget speech on Tuesday to the problems of the racing industry, but there was every indication yesterday that its factions will be arguing about them until Christmas and beyond. Outsiders might feel that it should not be difficult to split pounds 65m in two, or even three, ways and still keep everyone happy. In the twilight zone of racing politics, however, the first casualty of war is common sense.

By ignoring calls from both racing administrators and the bookmakers for a cut in betting duty of two per cent or more, Kenneth Clarke has ensured that both sides of the industry are now returning to their trenches for a protracted battle over the one per cent he did relinquish. To add to the confusion, he has also parachuted greyhound racing into no-man's land, eager for its own piece of the action. And this is what happens when he's actually trying to give money away.

To be fair to the parties involved, the Chancellor's one per cent, offered on the understanding that it must "be spread between the betting industry and horse and greyhound racing", puts them in an impossible position. The bookmakers want to pass the cut on to punters (who will then, of course, pass most of it back again) by cutting deductions to nine per cent. This, they argue, would stimulate betting, and thus assist racing - horses and dogs - via the percentage of turnover handed on by the bookies to the sports they depend on.

The British Horseracing Board, however, wants a portion of the reduction to pass directly to the Levy and feels that the Chancellor's words back it up. "We put the case for a duty reduction embracing both a reduction in the price of betting to the consumer and a transfer from duty to Levy," Tristram Ricketts, the BHB's chief executive, said yesterday. "He has responded very positively to that principle and we now wish to see it implemented."

Yet as the bookies point out, a cut in their deductions of less than one per cent is impractical. "You can't pass on fractions," Tom Kelly, of the Betting Office Licensees Association, said. "If we put the money into the marketplace to stimulate turnover, everyone will benefit.''

You could almost believe that the Chancellor, with his somewhat mischievous sense of humour, could not resist stirring things up. The 1 March deadline for an agreement between the various parties, after which the concession could be lost, also adds spice. Yet as they try to do a deal, both racing and the bookmakers would do well to remember precisely why they are in this situation.

There is, after all, a common enemy, which at present seems to be employing the principle of "divide and rule" to considerable effect. Without the National Lottery, both sides of the industry would be looking forward to a period of growth and prosperity, thanks to the five-year deal on Levy contributions, secured in 1994, which seemed to prove that the days of bickering were over. Everyone, it seemed then, could plan for the future with confidence.

Instead, just a year after the launch of the Lottery, many betting shops are on the brink of closure, and the Levy Board is planning deep cuts in its expenditure. It is potentially a mortal threat to racing, which should concentrate minds both within the sport, and among those who depend on it.

To date, the BHB has been sceptical about many of the bookmakers' ideas to increase non-racing, and therefore non-Levy, turnover. It may now be time to realise that a betting shop equipped with fruit machines, for example, is more use to racing than a closed betting shop. The campaign to allow bookmakers to compete fairly with Camelot needs support from the whole industry.

The bookmakers, in return, might allow part of the Treasury's money to return to racing (of both varieties), with the remainder used to promote turnover in other ways - better place terms on each-way bets, and so on. The losers, of course, would be the punters, still paying "tax" at 10 per cent, but this is, perhaps, preferable to having little or no racing to bet on at all. Meanwhile, the struggle must continue for further relief in the next Budget.

The most sense yesterday came from Geoffrey Thomas, executive director of the British Greyhound Board. "We must try and see things from each other's point of view," he said. In the face of the awesome force of the Lottery, unity of purpose is paramount. If the only result of Tuesday's tax cut is a return to the squabbling of old, we may soon wonder if, even for pounds 65m, it was a price worth paying.