12/10/2010 1:40PM

Purse cuts in 2011 hit Ireland hardest


France is up, Britain and Ireland are down in purse prospects for 2011. France-Galop, the august body in charge of racing in France, announced last month that prize money would be increased in France by 3 percent next year. This came as something of a surprise as the Pari-Mutuel Urbain (PMU), the French off-track betting system, and the Pari-Mutuel Hippodrome, the on-track betting system, have been competing with newly legislated online rivals since June. Yet PMU handle for 2010 is forecast to be slightly up over the 2009 total of 9.3 billion euros (about $12.5 billion), of which 731 million euros ($987 million) was returned to racing.

The Irish racing industry got bad news Tuesday, when the Department of Agriculture announced there would be a 3.3 percent cut from $59.3 million euros ($80 million) to 57.3 million euros ($77.3 million) granted to the country’s Horse & Greyhound Fund in 2011. Eighty percent of that money goes to horse racing. The cuts will be so severe that Horse Racing Ireland chief executive Brian Kavanaugh is threatening to cut the number of race meetings and cut purses even further than the drastic cuts made this year.

Ireland has been the hardest hit of all the European nations whose economies are pegged to the euro. Even the close relationship that Coolmore head John Magnier has with the Irish government has been of little help to Irish racing during the worldwide economic crisis. The money provided Irish racing by the Department of Agriculture is in addition to what it can grind out of the bookmaking industry. Ireland and Britain suffer from the predominance of betting with bookmakers, who give a great deal less back to racing percentage-wise than does the French pari-mutuel, or any other pari-mutuel system in the world, except perhaps the late, unlamented New York City Off-Track Betting Corporation.

Irish racing took another hit this week when the government announced plans to tax bookies at a rate of 1 percent on bets placed online and by telephone. That tax, of course, will ultimately be paid by bettors in the form of reduced odds.

In Britain, where much of the purse structure is made up by the amount of money the Levy Board can squeeze out of the off-course bookmaking industry, the annual battle for funding always reaches a peak at this time of the year. Racing complains that it is not getting enough. The bookies whine back that they are already giving too much. The Levy Board called for an increase of 75 million pounds ($118 million) over last year’s grant, but the Association of British Bookmakers is insisting that there be no increase at all.

Meanwhile, the Tote, the British pari-mutuel system that takes in perhaps 20 percent of on-track wagering in Britain, is up for sale. Founded by no less a personage than Winston Churchill, the government-owned body will be the subject of a debate in the House of Lords concerning a proposal on how Her Majesty’s government should divide the proceeds from the sale. One Lord James, a former chairman of Racecourse Holdings Trust, is arguing that instead of the government giving racing a share of the proceeds from the sale, it should simply give the Tote to the British racing industry and its 60 racecourses.

That might be a good idea for the tracks, but not for the government. Meanwhile, the French Pari-Mutuel Urbain is expected to join in the bidding for the Tote along with Phumela Gold Enterprises, the South African pari-mutuel wagering and racetrack company. But Churchill Downs Inc.’s previously expressed interest in the Tote appears to have waned.

Lord James has expressed fear that if the Tote is purchased by a bookmaker, the new owner might close the Tote’s on-course pari-mutuel operation. In any event, British prize money is not likely to increase in the near future. At the same time, British racegoers will continue to pick up the funding slack through the extortionist prices they pay to merely get into a racetrack.

The post-mortem on New York City Off-Track Betting has all concerned parties making statements about what plans they have to make up for lost funding. It all sounds very much like the slamming of the door after the horses have been stolen. Where were all these plans 10 or 15 years ago, when it was already obvious that NYCOTB was in big trouble?

One benefit of NYCOTB’s closure could be increased attendance at Aqueduct and Belmont. The key to racing’s future does not lie in more gimmick bets, increased cash rewards for new customers, or any of the bottom-line massaging procedures currently being advanced. Without an increase in live bodies in seats at racetracks around the nation, our problems will continue.