By Laura Donnellan, University of Limerick Law School, Ireland
32Red is a British online casino company licensed in Gibraltar and it has been announced on 6 September, 2016 that it is the new title sponsor of the ‘King George VI Winter Festival’ and the ‘Lanzarote Hurdle Day’ at Kempton Park Racecourse, near London. The deal is reportedly worth a seven-figure sum!
The Winter Festival is a two-day event, beginning on Boxing Day, 26 December. The Winter Festival features the prestigious steeplechase race, the32Red King George VI Chase, a three mile Grade 1 National hunt race for horses aged four years and above (http://www.kinggeorgechase.co.uk/). The King George chase is considered to be the second most prestigious steeplechase event in England; the first being the Cheltenham Gold Cup (George Dudley, King George VI Chase reveals new title sponsor, Sports Pro (5 Sept. 2016), http://www.sportspromedia.com/news/king_george_vi_chase_reveals_new_title_sponsor).
The Lanzarote Hurdle Day is the first jumps racing event of the New Year which takes place next year on 14 January 2017 at Kempton Park. William Hill was the sponsor of both events until 32Red concluded a three-year sponsorship agreement with the Jockey Club.
Under the new sponsorship agreement, 32Red will extend its sponsorship of the Grade 1 ‘Tolworth Hurdle’, a novice hurdle race over 2 miles and 110 yards at Sandown Park Racecourse, which is also near London. As it is the last novice hurdle race before the Cheltenham Festival, it attracts high quality horses and jockeys (http://www.jumpsracing.co.uk/racing-fixtures/tolworth-hurdle.php). 32Red has sponsored the Tolworth Hurdle since 2011.
In 2016, 32Red is sponsoring 45 races at Kempton Park (32Red Replaces William Hill as King George VI Winter Festival Partner, Gaming Intelligence (5 Sept. 2016), http://www.gamingintelligence.com/marketing/39616-32red-replaces-william-hill-as-king-george-vi-winter-festival-sponsor). On the 23 August 2016, 32Red signed a three-year agreement with the Jockey Club Racecourses to sponsor the 2016 ‘Sprint Cup’ and the three-day ‘Sprint Cup Festival’ in 2017 and 2018 at the Haydock Park Racecourse in Newton-le-Willows, Merseyside (32Red announced as new Sprint Cup Sponsor, 23 Aug. 2016, http://haydock.thejockeyclub.co.uk/more-information/news/32red-announced-as-new-sprint-cup-sponsor).
Whilst the exact financial details of the various sponsorship agreements have not been made public, the prize money for the King George VI Chase will remain at £200,000 (Chris Cook, 32Red replaces William Hill after seven-year King George VI Chase sponsorship, The Guardian, (3 Sept. 2016), https://www.theguardian.com/sport/2016/sep/03/32red-william-hill-king-george-vi-chase-sponsorship).
The sponsorship deal has caused some controversy for a number of reasons.
William Hill sponsored, amongst other events, the King George VI Chase for seven years and its relationship ended in the wake of new sponsorship rules. The British Horseracing Authority (BHA) issued a press release in October 2015, in which it announced that it would be introducing Approved Betting Partners (ABP) from 1 January 2016 (British Racing to Establish Authorised Betting Partners, 20 Oct. 2015, http://www.britishhorseracing.com/press_releases/british-racing-to-establish-authorised-betting-partners/).
In order to gain the status of ABP, betting firms must establish a “fair and mutually sustainable funding relationship with the sport”, and, in return, betting firms “will receive the official designation, ‘Authorised Betting Partner’, and will be able to fully utilise British Racing to promote and grow their own businesses” (British Racing to Establish Authorised Betting Partners, 20 Oct. 2015, supra).
The new system is expected to bring about more parity between the profits of the betting firms and the amount of money that is transferred to British Racing. Horseracing in Britain is worth over £3.4 billion to the economy: it directly employs over 17,000 people; supports over 85,000 jobs; and it is the second highest spectator sport in the country (British Racing to Establish Authorised Betting Partners, 20 Oct. 2015, supra).
Under current UK legislation, the Betting, Gaming and Lotteries Act 1963 (as amended), off shore digital betting firms are not covered, which means these companies are not required to pay levies to British Racing. In recent years, levies have decreased; for example, the BHA estimated that it was losing out on at least £30 million a year in Levy or equivalent payments. In 2004/2005, the levy collected amounted over £105 million; however, by the 2017/2018 horseracing season, the BHA estimate that it will have dropped to £53 million. As it would take some time for the legislation to be amended, the BHA views the ABP system as a way to circumvent the limitations of the 1963 Act (as amended).
Under the terms of the ABP, the Arena Racing Company (ARC) and Jockey Club Racecourses, who are the two largest racecourse groups in Britain, have agreed not to enter into any sponsorship agreements with betting firms that do not fulfil the criteria of ABP. The two groups control around 50% of all racecourses in Britain and operate almost 60% of the racing fixtures. An ABP must satisfy the following:
“A betting operator can become an Authorised Betting Partner if they pay an agreed contribution to the Levy on their digital businesses, or who have a commercial deal in place which sees them pay an equivalent sum, as agreed appropriate by the BHA, ARC and The Jockey Club” (British Racing to Establish Authorised Betting Partners, 20 Oct. 2015, supra).
Currently, 32Red, bet365 and Betfair are ABP, as they either pay the levy on their offshore digital businesses or have entered into sponsorship agreements in lieu of the levy, but provide for an equivalent sum.
As mentioned, 32Red is a Gibraltar-based online casino company, which is licenced by the Government of Gibraltar and the UK Gambling Commission. It is a British company, which trades on the ‘Alternative investment Market’ of the London Stock Exchange (https://www.32red.com/about-us).
Whilst the BHA, ARC and the Jockey Club Racecourses supported the tripartite agreement, some independent racecourses adopted a very different position. York racecourse, one of the four main independent racecourses, announced that it would allow all its existing sponsors to review their sponsorship agreements from 1 January 2016, irrespective of whether they were ABP or not (Greg Wood, York declines to back BHA’s new policy over bookmaker sponsorship, The Guardian, (9 Dec. 2015), https://www.theguardian.com/sport/2015/dec/09/york-declines-bha-policy-bookmaker-sponsorship). Ascot, another independent racecourse, lists Skybet, Seanie.mac.com, 188bet, amongst others, who are not APR as defined by the BHA, but are nevertheless referred to as Authorised Betting Partners (https://www.ascot.co.uk/betting-partners).
Whilst William Hill was replaced by 32Red, last month, William Hill signed a three-year betting sponsorship deal with Chelsea FC (http://www.williamhillplc.com/newsmedia/newsroom/media-releases/2016/australia-william-hill-signs-three-year-betting-partnership-with-chelsea-football-club/) and a two-year partnership with Tottenham Hotspur FC (http://www.williamhillplc.com/newsmedia/newsroom/media-releases/2016/william-hill-sign-two-year-partnership-with-tottenham-hotspur/).
The sponsorship of sport by betting firms raises a number of issues. The first issue is whether, from the point of optics, it is damaging the reputation of sport. In a similar way, tobacco companies sponsored sports events in the past and the incongruity became apparent over time. Whilst it is accepted that people bet on sports, the sponsorship of sports by betting firms may be a step too far, especially in sports, such as association football and cricket, which have been the subject of match-fixing associated with on-line betting companies. However, it is becoming more normalised for betting firms and online casinos to be associated with sports and sporting events as major sponsors of them.
This association seems to undermine the Corinthian ideal as espoused by Edward Grayson. Betting firms sponsoring sport was not a feature of Grayson’s discussion; however, the juxtaposition of betting sponsorship and sport could well fit within Grayson’s distain for uncouth practices within sport. Grayson was very much swayed by the sportsmanship that epitomised amateur sport in the mid-1950s (Sport and the Law (3rd ed.) (London, Edinburgh, Dublin, 2000), at p. 65). Grayson reflected on the early post-war period, when the Corinthian ideals of fair play, self-discipline, health and education were nurtured by members of the Association of Football Players’ and Trainers’ Union (now the Professional Footballers’ Association). Modern sport was, according to Grayson, beset by violence and ungentlemanly behaviour.
Grayson’s romantic vision of sport was not accepted by all and it was challenged by those who referred to the issue of class and the influence of the public schools in sport at this time. However, Grayson did have a point. Sport has been referred to as “idealists and ethereal” (Neville Cox, Alex Schuster (with Cathryn Costello) Sport and the Law (Dublin: First Law, 2004), at.p.1).
However, whilst betting is considered to be a side line activity that accompanies a sporting event, – in fact, where would horseracing be without it – it is beginning to overshadow sport generally, as it becomes a very visible and integral part of the business of sport. It seems, therefore, that the sponsorship of sport by betting companies, despite the views of Grayson and others, is here to stay!