PART II: Present Governance and Regulation of British Greyhound Racing

Chapter 7

THE BRITISH GREYHOUND RACING FUND

Introduction

The terms of reference for this Review do not specify funding of the sport within its remit. But it is clear, as was argued by a large number of witnesses, that it is not possible to examine the working of greyhound regulation without considering its financing procedures, which help to determine its effectiveness.

The British Greyhound Racing Fund (BGRF or the Fund) is the body responsible for collecting voluntary contributions from greyhound bookmakers. The Fund also provides management and oversight for the BGRB budget. Its board of 14 contains seven representatives from the BGRB and six from the betting industry which provide its funds (some of whom may also be promoters). Therefore the Fund is effectively controlled by promoters and bookmakers and it does not have the strong independent and regulatory representation which characterises its respected horseracing equivalent, the Horserace Betting Levy Board.

The Greyhound Levy

The Greyhound Levy originated from a reduction in the General Betting Duty on betting in 1992 by the then Chancellor of the Exchequer. Part of the purpose of this was to allow for additional funding to be made available for both horse and greyhound racing. The former occurred through the statutory Horserace Betting Levy; however, absent a parallel mechanism for greyhound racing, a voluntary system was devised whereby bookmakers would contribute a percentage of their turnover on greyhound racing by way of a non-statutory levy. Thus, although the tax reduction had placed upon bookmakers an obligation to contribute to greyhound racing, the non-statutory nature of the mechanism meant that it was, in effect, optional actually to do so. That remains the position today, although the percentage of turnover contributed by those who do pay has increased in recent years.

Thus, the Fund's budget of £11.5 million in 2007 derives from a levy of 0.6% on bookmakers' turnover on their greyhound racing business. Regrettably, some 1,500 bookmakers, mainly the smaller ones, representing about 17% of turnover, do not contribute to the levy, even though they benefited from the original tax reduction and continue to benefit from exploiting greyhound racing in their businesses. In fact, only 35-40 bookmakers, including the major bookmakers, do pay. Clearly, a statutory levy on greyhound race betting, as in horseracing, would resolve this issue by compelling all bookmakers to contribute. It would also raise more money for greyhound racing, especially for regulation, as was advocated by several witnesses.

However, it has to be stated firmly here that currently there appears to be no appetite, no will nor intention by the British government to introduce such a statutory levy, even if it were considered to be possible under European state aid law - which seems very doubtful.

Administration and Composition

Some evidence to this Review praised the Fund staff as being efficient in its micro collection and administration of levy revenues and for being ‘discreet and independent’. But there were trenchant criticisms of its overall role and functioning within the industry. The promoters in verbal evidence supported its abolition. The bookmakers expressed varying degrees of dissatisfaction. One senior independent member of the BGRB stated that ‘the Fund has turned into a dysfunctional unit and should be abolished. It is a complete dog's dinner. It is crazy that it can spend most of a meeting discussing whether to pay for a track boiler, when there may be neither estimates nor receipts’.

Even with relation to the operation of the present Fund system there were a number of suggestions for desirable change. It was argued strongly that the Fund's board should be less commercially dominated and have more independent representation - and above all that Regulator, as a major recipient of its funding, should have representation on the Board. The Association of British Bookmakers - in pole position as representing the Fund's largest contributors - states unequivocally in its evidence that the Regulator ‘should occupy at least one of the seven greyhound seats on the Fund’. This seems sensible and desirable and should be implemented promptly.

Allocation of Grants

Use of funds for grants to track leisure facilities (as opposed to improving racing, integrity and welfare facilities) was criticised by many witnesses on the grounds that the track operators should invest in their own leisure infrastructure, leaving more funds available for integrity and welfare.

However, it is in everyone's interest that stadia facilities should be modernised and made more attractive to the public. The bookmakers suggested that more funding be made available for staff training, validation and quality assurance in inspection and to ensure greater independence for vets (an important subject discussed further below in Chapter 15). Dogs Trust radically argued that the Fund should extend its realm to unlicensed tracks on the grounds that it should cover ‘the implementation of welfare assurance throughout the country’ and the whole sport, including all tracks where greyhounds are schooled and run. This statement fitted with the convincing argument by others that the Fund ‘should be more pro active’ in outlook, looking positively to further the interests of the sport and not just reacting to the specific expenditure proposals placed before it.

The Need for Reform

However, all such specific reforms should be seen within the context of the necessary review of the total complex mechanism of funding procedures in the whole industry. As the BGRB said in its evidence, the sport's funding process ‘is a convoluted system that would benefit from streamlining’. The ABB agreed, concluding that ‘we recommend that Lord Donoughue and his committee should examine the complicated financial relationship between the BGRB and the NGRC with a view to proposing a simpler and more efficient funding mechanism’. We respond to that below in chapter 10.