Racing: Courses dig deep for Internet gold

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The Independent Online
WHEN Graham Parr, the chief executive of Arena Leisure, announced earlier this week that racecourses were planning to run a tax-free Internet betting site, the reaction in some quarters was reminiscent of the pirates in Treasure Island when they think they have found Captain Flint's booty. "Yo ho ho, me hearties. We're going to be rich, I tell you. Rich!

Of course, when the buccaneers started digging, they found nothing but dirt. It seems unlikely that Britain's racecourses will meet with quite the same sort of disappointment, in the long term at least. There is a mountain of earth to be shifted in the meantime, however, and talk of an end to the Levy system, the extinction of betting-shop chains or a launch date based around next year's Grand National, may be wildly premature.

Only one thing is for certain. Parr is a clever and aggressive entrepreneur, who has become a major player in British racing in a very short time. Almost unknown five years ago, his company, Arena Leisure, now owns four tracks - Lingfield, Wolverhampton, Folkestone and Southwell - and has plans to lease Worcester. In terms of race meetings, this amounts to 18 per cent of the entire fixture list.

As such, his plans merit respect. Parr's proposal is to allow a tax-free betting site, UK Racing Online, based either in the United States or Australia, to show live coverage of British racing - both from his own courses and others - to anyone who places a bet. The betting system would be a pari- mutuel, similar to the Tote, with a rake-off from the stakes - perhaps five per cent - returned to the courses concerned.

So far, so plausible. There are technical and political problems, though, in both the short and medium term. "It will be perfectly possible in time," Richard Dinnick, of Internet Magazine, said yesterday, "but next Grand National day would be over-ambitious. Right now, the pictures would not be broadcast standard, and you certainly wouldn't be able to tell who had won in a photo-finish. And then there's always the problem of net congestion, which might block the lines, depending on how many people are downloading it."

Parr, however, insisted yesterday that pictures - of some sort - will be on the net in the spring. "There will be real-time pictures," he said. "They're not quite as good as television at the moment, but they are getting better. There will be high-quality pictures as we move into the new millennium."

There is no doubt that new transmission technologies are on the way. The hottest acronym in the business just now is ADSL, an ingenious way of using existing copper telephone wires which should drastically improve download times and picture quality. It is unlikely to be available before the middle of next year, though, and even then, will probably cost about pounds 40 a month to use. It could be five years or more before its use is widespread. In the meantime, it may be that television, telephone and internet technology will have converged to a point where interactive betting via your TV screen is a reality.

The political problems facing UK Racing Online include how to make sure that all Britain's racecourses, rather than just those owned by Arena Leisure, are involved in the project. Some may be reluctant to support a project which might undermine the domestic Tote, which already contributes significant sums to racecourse coffers.

"We're a trade association, and our job is to deal with things collectively," Morag Gray, of the Racecourse Association, said yesterday. "In this area of the marketplace, it makes sense to work together, but as an organisation, we're not going to team up with one particular operator. The one thing we must avoid is teaming up with one operator on one side and then finding that someone else offers a better opportunity."

At this early stage, Parr is refusing to speculate about the possible returns from UK Racing Online, and while some may pluck figures out of the air, the simple fact is that no one has a clue what its annual turnover might be. The timing of our racing in relation to the big Far East market, the possible disincentive to punters of a five per cent rake-off - other internet sites, remember, are tax-free - and the true depth of the foreign appetite for, say, selling hurdles at Worcester are just some of the variables to ponder.

"We know currently that the world-wide gaming drop on racing is the equivalent of pounds 70bn a year," Parr says. "I would suspect that that would rise, because if people have access to real-time pictures of British racing, they will definitely go for it. We can market the site around the world based on the regard in which British racing is held, particularly in ex-colonial countries, and we know that people in the Middle and Far East will stay up all night to bet on British racing."

There is no doubt that UK Racing Online is a good idea which is only a little ahead of its time. The betting technology is here already, even if the broadcast-quality pictures it requires are not. To realise the wilder predictions of some observers of an end to the Levy system, though, it would need to turn over pounds 1bn a year, which is almost as much as Ladbrokes.

A more plausible scenario is that the racecourses will eventually sell their pictures not on an exclusive basis, but to any internet operator who is prepared to pay the going rate, much as happens with SIS. The net rights will be a valuable new source of income, but not, for the foreseeable future, an alternative to the Levy, or the answer to all racing's problems. In other words, keep digging, me hearties.