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48-HOUR DECLARATIONS

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					                           48-HOUR DECLARATIONS

Why British Racing should not move now to 48-hour declarations

1. Weak evidence of benefits
1.1.      The case in favour of 48-hour declarations rests solely on RUK’s comparison
          of US turnover on British racing with 24-hour declarations compared to racing
          from South Africa and Dubai with 48-hour declarations. This is literally the
          only measure available of the benefits.
 1.1.1.     No substantiation of RUK’s turnover figures has been provided for the
            Board to date.
 1.1.2.     RUK is only in a position to produce figures for racing from its own courses.
            The industry should have access to figures from a wider range of courses
            to support a decision of this magnitude for the whole industry.
 1.1.3.     Figures for the remaining courses are the responsibility of ATR who should
            be but is not in a position to provide those figures even though it has had
            the longest time in which to sell the product.
1.2.      Between ATR and RUK, a product could be offered to N America with no
          change to current declaration arrangements and the resulting sales figures
          studied as a whole to illustrate the value of the market.
1.3.      In order to produce a balanced assessment of the effect of 48-hour
          declarations more work needs to be done to quantify the potential costs to
          British racing, especially any possible downturn on domestic betting
          revenues.
1.4.      Local evening newspapers: The Press Association has presented evidence
          that 48-hour declarations would reverse the decline in the coverage of British
          racing in local newspapers. It is important to maximise the media’s coverage
          of racing but no evidence has been provided of the evening newspapers’
          effect on betting turnover. The consequences of reduced coverage is
          therefore unclear especially as declarations are available from other sources
          (teletext and internet) at the same time that evening newspapers are
          published for those who are serious about studying form in advance.


2. Flaws in the argument in favour of 48-hour declarations
2.1.      Failure to sell the product under existing favourable conditions
 2.1.1.     For four years, 48-hour declarations have been trialled during the winter
            AWT period. All Sundays are subject to 48-hour declarations. In 2004,
            major handicaps and Pattern races were subject to 48-hour declarations.
 2.1.2.     In July 2003, the BHB organised a meeting between representatives of
            racecourses, owners, trainers and attheraces to discuss 48-hour
            declarations. At this meeting the NTF showed that British racing data could


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            be delivered to the East coast of America in the desired format at the time
            requested for display in New York OTBs and racecourse betting outlets. In
            addition, this process could be facilitated by moving the jockey booking
            deadline forward. In 2005, the deadline for booking jockeys was advanced
            creating the ideal conditions for the timely production of British racing data
            to the US East coast market without the need for 48-hour declarations.
 2.1.3.     Despite all these arrangements being in place, in accordance with the
            demands of the broadcasters, British racing has not been successfully sold
            to the overseas market. However, they remain in place and could still be
            used to gain a better understanding of the market. If necessary a small
            additional resource at either Weatherbys or the Press Association might cut
            several hours off this production time.
 2.1.4.     It should also be noted that the internet provides a platform independent of
            printing schedules from which overseas punters can obtain British cards.
            As the latest bookmakers results show, the strongest growth is in online
            gambling.
2.2.      “Consistent product”
 2.2.1.     It has always been suggested that a principle reason for the failure to
            effectively sell British racing to the foreign market is that a “consistent
            product” is required. It has been explained that only when British racing
            commits to a full season of 48-hour declarations across the board will we
            get a true evaluation of the market.
 2.2.2.     This argument is completely refuted by the fact that Phumelela has sold
            Tuesday night racing at Newmarket (SA) to the USA and Wednesday
            afternoon racing from Scotsville to Australia (see J. Wilson article from
            Racing Post 16.2.06.)
 2.2.3.     If South Africa was able to break into these markets with one-day a week
            fixtures, the array of arrangements in place in Britain should have given
            ATR and RUK the same opportunity.
 2.2.4.     The national horsemen’s association (NHBPA) in the USA has informed
            the NTF that the majority of serious US punters obtain form from the
            internet, including the Daily Racing Form web site, rather than printed copy.
            Electronic transfer and publication of British form avoids the time
            constraints caused by printing schedules.
 2.2.5.     Even if there are other reasons to explain the marketing failure, these
            arrangements remain in place and provide the conditions for both
            broadcasters to test the market with no further extension of 48-hour
            declarations.
 2.2.6.     Paragraph 4.12 of the RUK paper points to “92 mid-week evening fixtures
            run at RUK courses as the ideal simulcasting product for N America”. This
            is an example of what could be achieved under the existing declaration
            cycle.
3. Cost to British racing of 48-hour declarations.
Inefficiencies
3.1.      In 2003, the NTF commissioned Racing Economics to evaluate the economic
          argument put forward by attheraces.
3.2.      Their report concluded “the economic and financial impact of 48-hour
          declarations on the key stakeholders is broadly unfavourable. There are
          levers that could partially ameliorate the negative impacts of 48-hour


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          declarations on non-runners and race choice. However, these levers would
          have their own set of costs and inefficiencies.”
3.3.      In 2004 Heritage Handicaps and all Pattern races were subject to 48-hour
          declarations. During this trial numerous examples of the disruptive effects of
          48-hour declarations arose.
3.4.      A summary of how it effects trainers and other connections operationally
          appears below on page 6.
 3.4.1.     A crucial factor that makes 48-hour declarations more problematical in
            Britain than other countries is the quantity of racing that takes place each
            day and on nearly every day of the year serviced from a widely distributed
            horse population operating across all fixtures.
 3.4.2.     This requires trainers to assess opportunities for horses at different fixtures
            with varying conditions in order to provide the best service for their owners.
 3.4.3.     Moving the deadline for these decisions further away from the raceday
            inevitably means the trainer has less accurate information resulting in
            erroneous decisions.
3.5.      A particularly newsworthy example of the disruption that can be caused was
          the effect of going changes on the Chester Classic trials in 2004. Comments
          quoted in the press included Alan Lee in The Times:
       “Proponents say 48-hour declarations help to stimulate interest in the product
       at home and abroad – but where is the logic in that if the product has been
       enfeebled by the rule?”
3.6.      48-hour declarations are not proposed for Jumping but Simon Clare’s
          (Corals) comments in the Racing Post after they caused problems at the
          2004 Cheltenham Festival are still apposite:
       “48-hour declarations will simply mean more non-runners, more jockey
       changes, more price changes, more rule 4s, more confusion, less turnover
       and a host of gutted owners and trainers whose best laid plans are left in
       tatters.”
3.7.      48-hour declarations clearly have a major disruptive effect on owners’ and
          trainers’ planning of horses’ racing plans.


Effect on domestic betting revenues
3.8.      Non-runners
 3.8.1.     The Racing Economics report for the NTF concluded “there would be a
            significant increase in non-runners [with 48-hour declarations] which would
            be disproportionate to the present system of 24-hour declarations.”
 3.8.2.     No one disputes that 48-hour declarations lead to more non-runners. The
            BHB’s figures quoted in the February Board paper indicate an average of
            0.94 per turf race under 48-hour declarations. By definition, some races will
            have more than 0.94 and some fewer.
 3.8.3.     Ladbrokes betting indices: Ladbrokes produced betting indices for the
            meeting of BHB’s sub-group at Goodwood in 2003. They showed a range
            of decreases in betting turnover ranging from 1% to 31% for races with
            varying numbers of non-runners depending on race type from January to
            March 2003 on the AWT, as follows:




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            Average t/o index:
                                       2 or less NRs              3 or more NRs
            Handicaps                  99                         95
            Non-handicaps              87                         69

            The accompanying comment is guarded due to the small sample.
 3.8.4.     The varying number of non-runners per race and the fact that Ladbrokes
            figures show increasing depression of betting turnover as non-runners
            increase is important because while many argue that the increase in non-
            runners is minor, the resulting effect on betting turnover is significant.
 3.8.5.     In May 2004, the BHB wrote to the NTF about the initial impact of 48-hour
            declarations for all Pattern races, Heritage Handicaps and certain major
            jump races. The letter stated that, excluding the All Weather, betting
            turnover for the Flat decreased by 6%. Again, it has since been stated by
            BHB that this was a small sample so it is difficult to draw firm conclusions.
 3.8.6.     However small the samples, they are firm evidence of cause and effect of
            48-hour declarations.
 3.8.7.     Translating them into financial figures is problematic due to income from
            British bookmakers being is based on gross profit not turnover. However,
            mathematically, if gross margin is a constant, every percentage decrease
            in turnover will lead to a reducing total income from British bookmakers.
 3.8.8.     We understand that bookmakers’ margins are around 14% overall. If this
            delivers £100m to British racing on turnover of say £7.14billion, a reduction
            in turnover of 6% would be mirrored in the share of bookmakers’ margin
            received by racing. A 6% fall in turnover equates to £428m. Therefore if
            margins remain constant at14%, bookmakers’ profits would fall by £60m
            and racings income in turn by £6m.
 3.8.9.     Clearly these are very rough and ready calculations but are illustrative of
            the possibility that the impact of 48-hour declarations on domestic income
            could cancel out if not exceed forecast income from overseas.
 3.8.10. This may explain why, when 48-hour declarations applied to Heritage
         Handicaps, Ladbrokes declined to use them for their sponsored races.
 3.8.11. The fact that the industry is attempting to make a decision without a serious
         cost anaylsis illustrates the need to conduct more research.


Value of picture rights
3.9.      While we understand that current BAGS contracts are based on numbers of
          declarations rather than final runners, the negotiation of future contracts
          (whatever funding mechanism is found) might be influenced by the greater
          uncertainty about non-runners if 48-hour declarations were introduced.
3.10.     The minutes of the Goodwood meeting in July 2003, reported “Mr. Martin
          [Jeremy Martin, Salisbury racecourse] brought to the sub-groups attention the
          view of 16 of the smaller racecourses who are opposed to the extension of
          48-hour declarations because they are not convinced they have anything to
          gain financially and they are concerned about the potential damage to their
          domestic product from the increase in non-runners.”



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3.11.   It is notable that in 2005, when 48-hour declarations for Heritage Handicaps
        became optional, most racecourses chose not to apply them.


Effect on the Development Fund
3.12.   Ladbrokes 2003 figures showed a larger fall in betting turnover on non-
        handicaps from a given number of non-runners than in handicaps.
3.13.   Since the vast majority of races eligible for support from the Development
        Fund will be non-handicaps, a move to 48-hour declarations will have a
        particularly marked effect on betting turnover in this type of race.
3.14.   Consequently, racecourses will have even less incentive to programme non-
        handicaps, leading to greater demands on the Development Fund.


Reserves
3.15.   Any procedure leading to more non-runners creates demand from owners
        and trainers for a reserve system.
3.16.   A reserve system was developed for use in Heritage Handicaps when they
        have 48-hour declarations. Bookmakers have consistently resisted the
        introduction of reserves because late changes to racecards are unpopular
        with punters.
3.17.   If 48-hour declarations led to more widespread use of reserves, it is likely to
        make British racing less attractive to punters.


4. No provision for financial flow-down to horsemen
4.1.    Predictions of the financial benefit of 48-hour declarations to British racing
        have consistently failed to explain that the income flows accrue to
        broadcasters and racecourses and no mechanism exists to transfer any value
        to the participants, who bear most of the costs and inefficiencies.
4.2.    This might be said to be an even greater consideration since the BHB lost its
        legal case against ATR on data issues.
4.3.    The Board accepted this point at its February meeting and agreed that the
        decision to move to 48-hour declarations would be based, inter alia, on
        “further discussions between the RCA and representatives of the Horsemen’s
        Group on how, and how much of any additional revenue would flow to prize
        money.”
4.4.    At the time of writing these parties have not reached an agreement.


5. Conclusion
   Evidence of drawbacks shows that it would be rash to progress immediately to
   48-hour declarations and thereby threaten existing revenue streams further when
   evidence of overseas market can be obtained without moving fully to 48-hour
   declarations now.




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Operational Impact of 48-hour declarations

RUK’s paper presented at the February Board meeting notes “British racing has been
successful in reducing the periods for both entries and declarations, allowing
maximum flexibility to connections…However, this increased efficiency now raises an
obstacle to extending the international reach of British racing.”

In the space of two sentences, RUK’s paper shows that 48-hour declarations are
inherently inefficient for British racing with resulting costs and disruption.

Below we list some of the foreseeable problematical consequences for owners and
connections.

1. Entry cycle
1.1.     At present, the entry and 24-hour declaration cycle is as shown in the table
         below.
Day                             Declarations for             Entries for
Monday                          Tues                         Sat and Sun
Tuesday                         Wed                          -
Wednesday                       Thurs                        Mon
Thursday                        Fri                          Tues
Friday                          Sat and Sun                  Wed
Saturday                        -                            Thurs and Fri
Sunday                          Mon                          -


1.2.     The absence of declarations on a Saturday means Weatherbys does not
         need to provide a declaration service for Sunday.
1.3.     If declarations are moved to 48-hours, the absence of a declaration service
         one day a week would necessitate 72-hour declarations on one day.

1.4.     Weatherbys Racing Operations call centre would therefore have to open for
         both entries and declarations 7 days per week providing the following service:

Day                      Declarations for          5-day entries    6-day entries
                                                   for              for
Monday                   Wed                       Sat              Sun
Tuesday                  Thurs                     Sun              Mon
Wednesday                Fri                       Mon              Tues
Thursday                 Sat                       Tues             Wed
Friday                   Sun                       Wed              Thurs
Saturday                 Mon                       Thurs            Fri
Sunday                   Tues                      Fri              Sat




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2. Opportunities

1.5.      48-hour declaration reduces the time between entry and declaration by one
          day, leading to a 20-25% reduction in choice of opportunities for trainers to
          assess.
 1.5.1.     For instance, when declaring on a Monday for a Tuesday, a trainer can
            consider options on Tuesday, Wednesday, Thursday and Friday. However,
            when declaring on Monday for a Wednesday, a trainer only can only
            consider option on a Wednesday, Thursday and Friday, one day fewer.
 1.5.2.     Similarly, when deciding on Monday whether to enter a horse for a race on
            a Saturday, it is currently possible to view races on Tuesday, Wednesday,
            Thursday, Friday and Saturday. With 48 hour declarations, the declarations
            for Tuesday would already have been done so one day’s options would
            have passed.
1.6.      Retaining a 4-day gap by bringing forward entries to allow a 6-day entry
          system would create additional problems with the handicapping system (see
          3.1 below.)
1.7.      It has been suggested that an intermediate declaration deadline such as 40-
          hours could be introduced as a compromise.
 1.7.1.     Although this would give trainers slightly more time to assess going
            changes and their horses’ wellbeing, the best test of a horse’s wellbeing is
            to be ridden so most trainers exercise the following day’s runners before
            declaration at 24 hours.
 1.7.2.     In addition, most office staff (both trainers’ and probably Weatherbys) have
            left work by the time trainers have checked their horses at evening stables.


2. Handicapping


2.1.      Under the current system, trainers already enter horses on a Monday for a
          Saturday without knowing off what handicap mark the horse will run on that
          day. A 6-day entry cycle (see 1.1 to 1.3 above) exacerbates the handicap
          problem because trainers would be entering on both Sunday and Monday
          without knowing the new ratings.
2.2.      Similarly, they have to declare for a Tuesday without knowing whether more
          favourable handicap conditions may apply for the Saturday entries. With 48-
          hour declarations they would be declaring on Sunday for Tuesday and
          Monday for Wednesday without knowing the new ratings.
2.3.      Again, under 48-hour declarations, a trainer wishing to run a horse off its old
          mark on a Thursday wouldn't know its new mark until lunch time on Tuesday,
          2 hours after declaration time.


3. Non-runners


3.1.      It is well documented that 48-hour declarations lead to more non-runners as
          both going and horses’ wellbeing alter between declaration and raceday.


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 3.1.1.     A large proportion of the non-runners are due to veterinary reasons for
            which vet certificates must be obtained at a cost of up to £50. A rough
            estimate of the additional cost of vet certs under 48-hour declarations is
            £50,000.
 3.1.2.     Our veterinary advisers have major concerns at the implications of an
            increase in the number of veterinary certificates required.
 3.1.3.     It should be recognised that once a horse is declared, a trainer is under
            increased pressure to run it. There will undoubtedly be occasions when a
            trainer is forced to allow a horse to run when he has doubts about its
            wellbeing. The horse’s welfare is clearly at jeopardy.
 3.1.4.     Under 48-hour declarations trainers would have to be given the opportunity
            to scratch horses without penalty or the need for vet certificates either at
            the 24-hour stage or, as apparently happens in New Zealand, on the
            morning of the race.
3.2.      A similar though less obvious problem is the number of horses which miss an
          opportunity when, having not been declared due to unfavourable conditions
          at the deadline, they could have run because conditions subsequently turn in
          their favour.
 3.2.1.     A good example was Percussionist missing the Chester Vase in 2004
            when the good to firm ground was not in his favour at the 48-hour
            declaration stage but rain on the intervening day eased it in his favour.
 3.2.2.     These missed opportunities are as bad as a non-runner for the owner.
3.3.      The same applies when larger trainers have more than one possible runner in
          a race. When a declaration is made for one, which subsequently doesn’t run,
          the alternative runner misses an opportunity.
3.4.      One response to this is likely to be more multiple declarations as trainers try
          to mitigate the uncertainties over going changes and the condition of their
          horse. These will subsequently become non-runners. In races where there
          have been eliminations this would deprive another horse of an opportunity.


4. Reserves

4.1.      We believe it would be essential to introduce an extensive reserve system to
          counteract the extent of non-runners and lost opportunities.
 4.1.1.     As eliminations have increased and opportunities are stripped back due to
            restrictions on field sizes and racecourse stabling, there have been
            increased calls for a reserve system in British racing.
 4.1.2.     When 48-hour declarations pertain for Heritage Handicaps, reserves are an
            option and there will be strong demand for reserves in all Flat races if they
            are subject to 48-hour declarations.
 4.1.3.     In the past, development of a reserve system has been problematic due to
            the long distances over which some horses would have to travel to take up
            a reserve opportunity and the ever-increasing cost of transport.
 4.1.4.     In addition, reserves are not popular with bookmakers due to the disruption
            they cause to markets and punters calculations.




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5. Horses running in quick succession


5.1.   Under present arrangements, a trainer wishing to run a horse on two
       consecutive days must declare for the second race before the horse has run
       on the first occasion. With 48-hour declarations declaring “blind” in this way is
       extended by another day with additional scope for non-runners.
5.2.   Under current rules it is not possible to alter any declared equipment such as
       blinkers, visors or tongue straps. Under 48-hour declarations we believe
       trainers should be allowed to alter declared equipment at 24 hours.


6. Transport


6.1.   The increased number of non-runners will add complexity to the booking of
       horse transport and increase costs.
6.2.   Trainers and horse transport companies fill lorries with runners for particular
       meetings and quote prices to owners based on “shares”. Trainers will usually
       make a decision about sending a horse to a distant course based on cost as
       well as the chances of a successful run.
6.3.   Non-runners throw these calculations into confusion, making it uneconomic to
       send a smaller load on a long journey.


7. Jockey booking


7.1.   48-hour declarations cause problems for jockeys and their agents because
       the increased number of non-runners will lead to changes in their riding
       plans.
7.2.   Jockeys connected to particular stables will make their riding plans around
       horses from those stables.
7.3.   If horses from those stables are declared non-runners, trainers may want to
       redirect them to another meeting to ride that stable’s runners. In addition, a
       rider who has only one or two rides at a meeting for his retained stable will
       want to reroute if those horses do not run.
7.4.   Changes to declared riders are confusing for punters but it would be an
       unreasonable restriction to prevent jockeys from switching mounts in these
       circumstances.


8. Racecourse stabling


8.1.   Under the latest regulations restricting the number of runners at a fixture to
       the stabling capacity, complex elimination procedures have been developed
       to maximise the use of stables to maintain opportunities.
8.2.   With additional non-runners under 48-hour declarations, stable based
       eliminations will unnecessarily deprive some horses of opportunities.



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8.3.   The elimination procedure would need to be revisited if all Flat races are
       subject to 48-hour declarations. It took around a year to develop the existing
       system so this would require a good deal of thought. To some extent it would
       relate to consideration of a reserve system, which as explained above
       presents problems of its own.


9. Conclusion
9.1.   It is clear that the considerable disruption to existing working practices
       caused by 48-hour declarations lead to an array of costs and inefficiencies for
       connections.




National Trainers Federation
27.02.2006




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Description: 48-HOUR DECLARATIONS