Racing: More betting shops may be scratched

If anyone outside Camelot headquarters still believes that the National Lottery is just a bit of fun which hurts no one, the latest figures charting the large and growing hole which it has left in racing's finances must surely persuade them otherwise. An industry which employs almost 150,000 people and gives untold pleasure to many more now faces a threat which, unless further assistance is forthcoming from the Government, could reduce it to a feeble sideshow in just a few years.

The Levy Board, which collects deductions from punters via bookmakers in order to fund much of racing's expenditure, disclosed on Tuesday that the yield from betting turnover in 1995-96 was pounds 7m below the figure of pounds 55m predicted in October 1994, a month before the launch of the Lottery.

A further shortfall of pounds 5m is expected in the current year, while the number of betting shops has now fallen below 9,000, from 9,500 at the start of the financial year. Fewer shops means lower turnover and the circle will become more vicious with each revolution.

This should not, of course, come as any surprise as bookmakers have seen their business decline sharply since the arrival of the Lottery and, in particular, scratchcards. What hurts the bookies one year will be painful for racing the next, and the hatchet which has already been taken to prize- money and other expenditure this year may need to be re-sharpened for a second swipe at the budgets for 1997.

"The number of betting shops which have closed is very alarming," Rodney Brack, chief executive of the Levy Board, said yesterday. "We must prevent the increase of illegal betting, because it can start if small shops in towns and villages close and there is no other bookmaker. Clearly, it is these small independent shops which are the most vulnerable, and the racing and betting industries will be putting submissions to the Chancellor that this is a matter of great need."

A similar campaign to bend Kenneth Clarke's ear 12 months ago resulted in a one per cent cut in betting duty in last November's Budget, which was passed on to punters in an attempt to stimulate turnover. While this provided some relief, it has only slowed, rather than arrested, the decline.

Many of the smaller shops which are being squeezed most tightly are members of the British Betting Offices Association, whose chairman, Warwick Bartlett, believes even the latest figures for the number of betting-shop closures understate the problem.

"We estimate that the correct number of shops is now around 8,600," Bartlett said yesterday, "and the official figure is higher because the Government is acutely embarrassed at the rapid decline and how quickly the Lottery has cut into our market."

The recent arrival of fruit machines has had a small positive effect - "people [BBOA members] are saying that after expenses they're getting about pounds 30 a week that they weren't getting before" - but the refusal by the Department of Heritage to allow bookies to bet on the Lottery numbers was a particular blow.

"People want to have a side bet on their numbers," Bartlett said, "and it's not going to reduce the Lottery's turnover. But even if it does, you've got to remember that it's already making fives times as much as they originally expected. How greedy can you get?

"It would be cost effective for the Government to make an investment in the industry now. One per cent off betting duty would cost them pounds 60m, and they make so much more from the racing industry. It employs 140,000 people, and if it declines and puts a lot of them on the dole, it will cost them a lot more than pounds 60m."

The obvious fear, though, is that in the last Budget before a general election, the Chancellor will find other ways to spend what money, if any, he has to spare. Whatever happens in November, meanwhile, Bartlett feels that racing's administrators will need to take a close look at their accounts.

"It's no good people coming to us for more and more money when they're not running their own show properly. Racing must try to reduce its overheads, and we don't know whether they're efficient or not because they don't produce a balance sheet."