Racing: Jobs and shops will fall to Lottery

For connoisseurs of irony, this is one to treasure. Two days ago, embarrassed by the forlorn performances of our athletes in Atlanta, the Prime Minister announced that many millions of pounds raised by the National Lottery will be used to revitalise British sport. Just 24 hours later, however, conclusive proof finally emerged that the very same Lottery is threatening to despoil one of the few sports at which this country has always been, and could easily continue to be, a world leader.

First, a report commissioned by the Home Office prompted the first official admission that the Lottery has had a disastrous impact on betting turnover and, as a result, the racing industry, which is largely funded by deductions from bets. Turnover for 1995, the report pointed out, was six per cent lower in real terms than in 1994, when it might have been expected to rise by about five per cent during the same period.

Now, those figures have been converted into the human currency of jobs and businesses by an update to the 1995 Henley Centre report. Twelve months ago, the Centre predicted that the only way to avoid thousands of job losses and betting shop closures was a two per cent cut in betting duty in last November's budget. The Chancellor, it will be recalled, did indeed cut the duty, but by just one per cent.

The updated report, the key points of which were released yesterday, insists that while that reduction saved some shops from closure, it was not enough to restore the damage done by the Lottery. Its authors calculate that by the end of 1996, 650 betting shops will have gone out of business, with the loss of 3,000 jobs, as a direct result of the Lottery.

More disturbing still are the Centre's predictions for the near future. A further 1,300 shops (and, therefore, 6,000 jobs) are identified as being at risk. It is estimated that turnover will be 8.5 per cent lower than would have been the case without the Lottery (and this, remember, is even after the most recent betting duty cut to stimulate turnover). The profitability of the average shop is expected to fall by 32 per cent.

Henley concludes that a further drop in betting duty of 1.25 per cent - all of which should be passed on to punters via a cut in betting "tax" - is required to rectify the situation. Since their original judgement was for a two per cent reduction, the latest conclusion is, in effect, that when they said 12 months ago that the situation was bad, they were wrong. It was even worse.

It is one thing, of course, to convince the Government that things are getting desperate, but quite another to persuade them to do anything about it. John Jackson, of the Bookmakers' Committee which commissioned Henley, must now pound the streets of Whitehall to argue the case for a duty cut, while over at Portman Square, the British Horseracing Board is preparing a submission of its own to the Treasury.

Since the BHB and the bookmakers cannot agree on the best path forward, racing will hardly present a united front to those in power, and what little spare cash the Chancellor has to redistribute may already be earmarked for middle England's tax cuts. Yet without further assistance, one of our most cherished industries will face a hopelessly unequal struggle from which it may never recover.