By Laura Donnellan, Lecturer in Law, School of Law, University of Limerick, Ireland.
On 12 July 2019, Sandy Dudgeon succeeded Roger Weatherby as the Senior Steward of the Jockey Club at a time of increased regulation of betting.
The decision was announced in a press release on 10 December 2018 (Jockey Club, ‘The Jockey Club elects Sandy Dudgeon as Senior Steward from July 2019’, https://www.thejockeyclub.co.uk/about-us/media-centre/press-releases/2018/12/the-jockey-club-elects-sandy-dudgeon-as-senior-steward-from-july-2019/).
The stewards are the board of directors and the Senior Steward is equivalent to a non-executive chairperson. The use of the term steward pays homage to its ‘heritage’, (Jockey Club, ‘The Jockey Club Stewards’, https://www.thejockeyclub.co.uk/about-us/our-structure/our-board/).
The Group Chief Executive, Simon Bazalgette, recently announced that he will step down at the end of 2019 following his ten-year term at the helm (Bill Barber, ‘Simon Bazalgette to step down as Jockey Club chief executive’, 1 May 2019, Racing Post, https://www.racingpost.com/news/simon-bazalgette-to-step-down-as-jockey-club-chief-executive/378532).
This change in senior personnel will arguably bring changes to the overall direction of the Jockey Club which is, a company limited by Royal Charter. It is an overarching structure that encompases the following entities: Jockey Club Racecourses; Jockey Club Estates; the National Stud; and Racing Welfare. The Jockey Club Racecourses, the largest racecourse group in Britain, operates the 15 racecourses (http://www.thejockeyclub.co.uk/jockey-club-racecourses).
The Jockey Club annual accounts for the year 2018 show a tenth consecutive year of profits with a turnover of £214.6 million (Jockey Club, ‘10 years of commercial growth leads to record prize money contributions’, 25 April 2019, https://www.thejockeyclub.co.uk/about-us/media-centre/press-releases/2019/04/10-years-of-commercial-growth-and-record-prize-money/). The operating profit of the Jockey Club (before prize money) was £48.1 million (Laura Donnellan, ‘British Horse Racing: The Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 and how will they affect the Jockey Club?’, Global Sports Law and Taxation Reports, 22 May 2019, https://www.sportsandtaxation.com/2019/05/british-horse-racing-the-gaming-machine-miscellaneous-amendments-and-revocation-regulations-2018-and-how-will-they-affect-the-jockey-club/).
The operating profits of the Jockey Club come from a number of streams including:
- large racing festivals;
- the Jockey Club Live events;
- commercial partnerships;
- media licences; and
- fees and revenue raised through the use of the Jockey Club Estates’ training facilities
(Laura Donnellan, ‘Horse Racing: The Jockey Club posts 2016 annual turnover of £191.5 million!’, Global Sports Law and Taxation Reports, 28 April 2017 https://www.sportsandtaxation.com/2017/04/horse-racing-the-jockey-club-posts-2016-annual-turnover-of-191-5-million/).
Dudgeon has been a member of the Jockey Club since 1989 and was elected a steward in 2009 and served a three-year term and has been a member of the board of stewards since December 2017. He is a chartered accountant and retains his role as director of Schroders’ private wealth management business in Hong Kong.
The new senior steward is also a former amateur jockey, who won 60 point to point races under the rules of the National Hunt.
His role as chair will be to devise and oversee the strategic direction of the Jockey Club to ensure its continued viability and is well-qualified to do so.
On his appointment, Dudgeon alluded to the challenges that face the Jockey Club and stated:
‘We have many opportunities to grow our sport’s appeal and financial sustainability for all, while recognising we face some real challenges’ (Jockey Club, ‘Sandy Dudgeon begins role as The Jockey Club’s Senior Steward’, 11 July 2019, https://www.thejockeyclub.co.uk/about-us/media-centre/press-releases/2019/07/sandy-dudgeon-seeks-greater-industry-collaboration-as-he-begins-role-as-the-jockey-clubs-senior-steward/).
One of the main challenges facing the Jockey Club is the falling media rights income as acknowledged in a press release of 20 December 2018 (Jockey Club, ‘JCR plans to maintain prize money levels in 2019’, 20 December 2018, https://www.thejockeyclub.co.uk/about-us/media-centre/press-releases/2018/12/jcr-plans-to-maintain-prize-money-levels-in-2019/).
Following a British Government review of gambling, the Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 came into force on 1 April 2019 (http://www.legislation.gov.uk/uksi/2018/1402/pdfs/uksi_20181402_en.pdf). The new Regulations have reduced the maximum charge for a single bet on Fixed Odds Betting Terminals (FOBT) from £100 to £2. FOBTs are electronic gaming machines that betting shops, casinos and racetracks with betting pools are permitted to have on site. For betting shops and tracks with pool betting, there is a limit of four machines per premises, according to section 172 (1) (a) of the Gambling Act 2005 (https://www.legislation.gov.uk/ukpga/2005/19/pdfs/ukpga_20050019_en.pdf).
Information on the review can be found at: Gambling Commission, ‘Government review of gaming machines and social responsibility measures published’, 18 May 2018, https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/government-review-of-gaming-machines-and-social-responsibility-measures-published
It is not yet known what effect the new Regulations will have on the annual turnover of the Jockey Club.
As the new law came into force on 1 April, the annual turnover for 2019 will include the first three months of the financial year when the maximum stake per bet was £100 (Laura Donnellan, ‘British Horse Racing: The Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 and how will they affect the Jockey Club?).
As noted above, one concern is that of media rights.
Under the new Regulations, betting shops will be required to pay approximately £30,000 per year for the right to broadcast live sport; according to Bill Barber, ‘meaning a loss of up to £21 million in revenue for media rights holders, including racing’ (‘Devastating: Hills set to close around 700 shops with 4,500 staff to be affected’, Racing Post, 5 July 2019, https://www.racingpost.com/news/hills-set-to-close-around-700-betting-shops-with-up-to-5-000-staff-affected/388682).
It is estimated that William Hill will close 700 shops, amounting to one-third of its shops, in the UK resulting in the loss of 4,500 jobs. The number of shops closing could be nearer to 900 as the betting industry loses a huge amount of revenue with the introduction of the maximum £2 FOBT, referred to by some as the ‘craic cocaine’ of gambling (‘William Hill to shut 700 British betting shops’, Business World, 4 July 2019, https://www.businessworld.ie/world-news/William-Hill-to-shut-700-British-betting-shops-572571.html).
Last week, Scotbet went into receivership, citing the changes to FOBT (Bill Barber, ‘More betting shops close as Scotbet go into receivership’, Racing Post, 19 July 2019, https://www.racingpost.com/news/latest/more-betting-shops-to-close-as-scotbet-goes-into-receivership/391042). Eleven of its shops have closed and its hoped that it will be able to save thirty shops and the jobs of 127 employees.
The Jockey Club Racecourses Chief Executive, Paul Fischer, explained the consequences of the Government gambling review as follows:
‘Every independent estimate has us facing a significant hit to our revenues from reduced media rights income as betting shops close across Britain on the back of the Gambling Review. We’ve had some tough decisions to make and we’ve chosen to prioritise our contribution to prize money because we know how important it is to racing’s participants’ (Jockey Club, ‘JCR plans to maintain prize money levels in 2019’).
The extent of losses in media rights income for the Jockey Club will become more apparent in the next couple of years.
Sandy Dudgeon takes charge at a time of great change and uncertainty. He comes into the job aware of the challenges and understands the need to engage more with stakeholders in the hope that losses can be recouped through other endeavours!
Laura Donnellan may be contacted by e-mail at ‘Laura.Donnellan@ul.ie’