Horse racing organizations across the UK have rejected the £ 40million relief package offered by the Department of Digital, Culture, Media and Sport (DCMS) as part of the “Winter sports survival package”.
Instead of the full sum, Horse Racing will instead receive £ 21million, paid directly to the Horse betting drawdown table (HBLB), announced yesterday.
The reluctance of many racetracks to take on more debt amid the COVID-19 crisis was cited as the main reason for halving the sum, according to the Race station, and opting instead to “settle their own credit agreements”.
Director General of the HBLB, Alan delmonte, justified the decision: “The loan offers additional flexibility and a cushion for the Levy Board. This short-term benefit has outweighed the cost of the loan interest that will be incurred and have to be repaid along with the loan amount in years to come. “
The package, which will provide financial support for race integrity, health and safety costs, will also allow the HBLB to continue its monetary support to industry throughout the pandemic.
David armstrong, Director General of Racecourse Association, commented: “There were structural challenges which in particular made it very difficult for racetracks to borrow money. Racetracks were asked to borrow money that would actually be used to fund cash prizes that they do not generate a return on to pay it back.
“However, the biggest problem was that many racetracks didn’t want to take financing because they already had significant debt on their balance sheets and they added to that debt during COVID in a big enough way to help them survive.
“What they didn’t want was to take on more debt with more repayment obligations in the future, which would have made life very difficult for them. In some cases they couldn’t, there were restrictions in their existing borrowing rules that prevented them from taking out new loans. “
Armstrong also explained that the £ 21million figure had been calculated based on the Levy Board’s spending since October, as DCMS wanted to ensure that public funds would only cover operational costs, and not the prize money.
He added: “One aspect was that the government was not too keen on giving away funds from this pot that went directly into cash prizes. It is a question of reconstituting the Council of the levies for the amount which they spent since the beginning of October. “
Nonetheless, the loan was well received by the horse racing industry, with Julie harrington, Director General of British Horse Racing Authority (BHA), noting that the financial support will benefit racetracks, participants and communities, with racing playing a “vital role” as an employer and contributor to the rural economy.