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									Scottish Racing Strategic Plan
February, 2006




                  For further information contact: Jonathan Garratt
                                             Commercial Manager
                                                    Scottish Racing
                                                     PO Box 13333
                                                             Hawick
                                                           TD9 8RU

                                               Tel. 07771 660114
                                 e-mail: info@scottishracing.co.uk
Contents:


Executive Summary                         3

Introduction                              6

Economic Impact                           6

Fixtures                                  8

Race Planning                             8

Development of the Racehorse Population   9

Staff Training                            10

Industry Marketing and Communication      11

Marketing of Racedays                     12

Racecourse Capital Developments           13

Future Funding                            14

Media Rights                              15

Action Plan                               16 – 21

Appendices (Statistical tables)           I – IV




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Executive Summary

I      In 2001 an economic impact study conducted on behalf of Scottish Racing, by
       Stevens & Associates, demonstrated that the sport was responsible for generating
       approximately £125m per annum for the Scottish economy and employing
       approximately 1,700 people in full time equivalent jobs.

II     Further research, conducted as part of the Strategic Review process in 2005, has
       provided additional and more up-to-date information, demonstrating that:

           The Scottish racing industry now generates in the region of £213m per annum
            for the Scottish economy and is responsible for the employment of 3,835 people.

           The Scottish racing industry has an economic impact on the British economy of
            approximately £293m per annum, as a result of nationwide betting on Scottish
            races and the provision of racing opportunities for non-Scottish trained horses.

           Visitors to Scottish racemeetings generate approximately £60m per annum for
            the Scottish economy (compared to £45m in 2001)

           Total annual attendance at Scottish racemeetings increased for the fifth
            consecutive year in 2004, to 322,302 (an increase of 42% compared to 1999).

           While the number of fixtures allocated to Scotland increased (from 88 in 1999 to
            97 in 2004, the average daily attendance increased by more than 20% (to 3,357)

           During 2005, the average daily attendance at Scottish racemeetings increased
            by a further 4%, despite fewer fixtures being staged as a result of abandonment.

           Owners, trainers and breeders contribute approximately £17.5m to the Scottish
            economy each year and generate full-time-equivalent employment for 370
            people, predominately in rural areas.

           Scottish betting shops produce gross profits, from horseracing activities, in
            excess of £119m per annum. Horseracing supports approximately 2,370 full-
            time-equivalent jobs within the betting industry in Scotland.

III    Historical influences in Britain have led to an imbalance in the geographic distribution
       of income throughout the sport. Despite estimates that Scotland generates
       approximately 11% of GB betting revenue, the country has just 8.5% of GB
       racecourses, 7.1% of the GB fixtures, 2.25% – 4% of the GB racehorse population
       and 1.5% of GB trainers. The racecourses have therefore invested heavily in prize
       money, to the extent that:

           The average value of the most common races (Grades 4-6 on the Flat and
            Grade C-H over jumps, accounting for approximately 90% of races) is 7.8%
            higher in Scotland than in England and Wales (£6,933 compared to £6,433).

           The average prize money for NH races, graded B-H, is 17% higher in Scotland
            than in England and Wales (£8,686 per race as opposed to £7,423 per race).

IV    As a result of the comparatively low percentage of fixtures and the small racehorse
      population, it is estimated that Scotland receives only 55% of the Levy revenue
      generated by Scottish punters on all horserace betting in Britain (£6.5m out of £11.9m).
      Just 19% (£2.3m) of that revenue is retained within Scotland once it has been
      channelled through the industry in the form of prize money grants, integrity fees,
      fixtures fees, etc. There is therefore a net outflow of Levy revenue from Scotland to
      England and Wales of approximately £9.6m.




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V      In order to maximise revenue for the British racing industry, as well as for the Scottish
       economy, it is essential that there is adequate investment in all sectors of the Scottish
       racing industry. It will also be necessary to allow racecourses flexibility within the
       processes of race planning and fixture allocation, in order to permit innovation and
       utilise each racecourse’s full resources to maximise field and crowd sizes.


Scottish Racing Industry Objectives

VI     To stage 9% of the GB fixture List or 50 additional fixtures: While potential exists
       for more than 10 additional turf fixtures (including the new 2006 leasehold fixtures) in
       Scotland, Musselburgh Racecourse will be seeking an additional 40 fixtures, to be
       staged on the proposed new all-weather track. The requirement for racecourses to
       bid for leasehold fixtures (and to buy additional racecourse fixtures), signifies a major
       requirement for investment, which may require external financial assistance in order
       to expand, or even maintain, the existing fixture list.

VII    To stage competitive racing: A package of measures, including: regionalised race
       planning, flexibility in prize values, appearance money, bonus schemes and effective
       use of the Development Fund, will assist in the development of a competitive race
       programme.

VIII   Develop the Scottish racehorse population to 9% of the GB total: While growth in
       the local racehorse population will help to secure the future of Scottish racecourses, it
       could also generate an additional £35m and 740 jobs within the Scottish economy.

       Reasons why Scotland should be viewed as an attractive location for trainers include:

          Substantially higher values of prize money for most races
          An abundance of knowledgeable staff
          Comparatively low land prices
          Relatively little vehicular traffic
          Natural hills for exercising the horses
          Good road access to both Scottish and English racecourses
          Close proximity to two highly respected equine veterinary research centres.

       In addition, it is proposed that financial assistance is given (through HBLB grants,
       Farm Development Schemes, etc) to projects which encourage the development of
       training facilities in Scotland, including communal facilities for new trainers. A prize
       money bonus scheme will be considered, subject to consultation, for horses trained
       or owned by residents of Scotland. Support will also be given to Scottish breeders in
       their efforts to claim EU Single Farm Payments, as is the case in England and Wales.

IX     Provide local training for the industry’s workforce: The Scottish racing industry
       may require an additional 76 new members of staff per annum. It is therefore
       essential that either Scottish training providers are encouraged to obtain accreditation
       to award BHEST approved qualifications, or that external training providers are
       allowed to contract to the appropriate agencies in order to run the relevant courses in
       Scotland.

X      Attract larger crowds: 20% of visitors to Scottish racecourses stay overnight as part
       of their excursion, contributing significantly to the Scottish tourism economy.
       Research shows that the majority of racegoers are encouraged to attend, for social
       reasons, by another racing enthusiast. The emphasis of the racecourses, in targeting
       further increases in daily attendance, will therefore be on the collection of data from
       racegoers, the development of raceday themes, the creation of festivals and the
       exploitation of niche racing markets to attract tourists from outside Scotland.

XI     Improve racecourse facilities: More than £15m of capital investment has been
       made in Scottish racecourse facilities since 2001. Further investment is planned at



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      each of the Scottish tracks including plans for a flood-lit all-weather track at
      Musselburgh Racecourse and the complete redevelopment of Scotland’s only Grade
      1 track at Ayr.

XII   Secure an equitable share of future funding from the betting industry: The
      Scottish racecourses remain committed to working, through the RCA, with the rest of
      the industry to achieve a secure future funding plan. However, regardless of the
      mechanism for generating revenue from the betting industry, it is essential that the
      focus of the Scottish racing industry should be directed at achieving equitable funding
      levels for the industry to achieve its main targets of: 9% of GB racing fixtures, 9% of
      GB racecourse attendance, 9% of the GB racehorse population, 9% of GB betting
      revenue.

      The economic benefit of successfully implementing the plan, excluding the impact of
      increased betting opportunities, could be as high as £63m per annum, based on a
      10% increase in daily attendance figures for existing meetings, 50 additional fixtures
      and a three-fold increase in the Scottish Racehorse population.




                                                                                               5
Scottish Racing Strategic Plan

1     Introduction

    1.1.   The racing industry in Scotland is an important contributor to both the Scottish
           economy and the British racing and betting industries. The five racecourses in
           Scotland, together with the British Horseracing Board (BHB) and the Horserace
           Betting Levy Board (HBLB), therefore agreed in April 2005 to conduct a strategic
           review of the industry in order to determine how best to develop the sport for the
           benefit all participants, customers and suppliers (both direct and indirect), in
           Scotland and the rest of Britain.

    1.2.   An economic impact study, conducted by Stevens & Associates in 2001,
           demonstrated that the sport was responsible for generating, through direct and
           indirect spending, approximately £125m per annum for the Scottish economy and
           employing approximately 1,700 people in full time equivalent jobs. The scoping
           study also identified a number of opportunities to grow the economic impact of
           racing including: increasing the number of fixtures, increasing the appeal of racing
           and strengthening the local supply chains associated with the industry.

    1.3.   Further research has been conducted throughout 2005, including an up-to-date
           economic impact study, a statistical analysis of runners at Scottish racecourses,
           customer research at racing events and an analysis of the racehorse training
           industry in Scotland. The results of the research, together with an appraisal of
           relevant reports produced on behalf of other British racing organisations, are
           contained within the Scottish Racing Strategic Review document, 2005. The key
           issues arising from the Review and recommended actions are summarised in the
           following pages.


2. Economic Impact

    2.1.   The 2005 Economic Impact Study, conducted by Stevens & Associates as part of
           the Strategic Review process demonstrated that the racing industry generates in
           the region of £213m per annum for the Scottish economy and is responsible for
           the employment of 3,835 people.

    2.2.   The Scottish racing industry has an economic impact on the wider British
           economy of approximately £293m per annum, as a result of nationwide betting on
           Scottish races and the provision of racing opportunities for non-Scottish trained
           horses.

    2.3.   During 2005, it is estimated that visitors to racemeetings in Scotland will have
           generated approximately £60m for the Scottish economy, compared to £45m in
           2001, an increase of 33%. Total annual attendance at Scottish racemeetings
           increased for the fifth consecutive year in 2004, to 322,302 (an increase of 42%
           compared to 1999).

    2.4.   While the number of fixtures in Scotland has increased to 96 (from 81 in 1999),
           the average daily attendance at Scottish fixtures has increased to 3,357 (more
           than 20% compared to 1999). During 2005, the average daily attendance at
           Scottish racemeetings increased by a further 4%, sustaining the long term growth
           achieved in recent years.

    2.5.   Pictures of Scottish races are distributed world-wide, enhancing the reputation of
           the racecourses, local towns, Scotland and Britain.



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2.6.    The importance of the horseracing industry to Scotland is further underlined by the
        contribution, of approximately £17.5m, made to the economy by those involved in
        the breeding, owning and training of racehorses. It is estimated that there are
        currently in the region of 370 full time equivalent jobs for people directly employed
        in equine care, predominately in rural areas, within the racehorse breeding and
        training sectors in Scotland.

2.7.    Horseracing accounts for nearly 50% of the total turnover generated in betting
        shops. By applying this percentage to the estimated number of people employed
        within the Scottish betting industry, it can be projected that there are in excess of
        2,370 full time equivalent jobs in betting shops in Scotland supported as a direct
        consequence of horse racing. It estimated that the Scottish betting shops produce
        gross profits in excess of £119m per annum.

2.8.    Historical influences over hundreds of years, but particularly within the last 50
        years, have led to a significant imbalance in the geographic distribution of income
        throughout the sport. Despite estimates that Scotland generates approximately
        11% of GB betting revenue (11.4% of Britain’s betting shops are situated in
        Scotland), the country has just 8.5% of the total number of GB racecourses (5 out
        of 59) and 7.1% of British fixtures.

2.9.    Furthermore, the concentration of a large proportion of the racehorse population in
        training centres such as Newmarket, Lambourn, Middleham and Malton, has
        understandably led to significant investment (of both public and private funds) in
        facilities for trainers in these areas. The comparative under-investment in similar
        areas within Scotland has resulted in just 2.25% – 4% of racehorses being trained
        north of the border.

2.10.   In order to attract competitive fields, the Scottish racecourses have invested
        heavily in prize money. The average value of the most common races (Grades 4-6
        on the Flat and Grade C-H over jumps, accounting for approximately 90% of
        races) is £500 (7.8%) higher in Scotland than in England and Wales (£6,933
        compared to £6,433). Runners in NH races in Scotland benefit from significantly
        higher prize values. The average prize money for NH races, graded B-H, is 17%
        higher in Scotland than in England and Wales (£8,686 per race as opposed to
        £7,423 per race).

2.11.   The reliance on runners from England and Wales, represents a potential risk to
        the racing industry in Scotland. Any restriction placed on the Scottish racecourses’
        ability to attract runners, whether imposed by regulation through race planning or
        by suffering increased competition for runners from southern tracks (which have
        the advantage of being closer to the training centres) could have a compound
        effect. Poor fields could lead to a decrease in the generation of betting revenue
        and thus a downward spiral of decreased investment in prize funds, even less
        competitive fields and further decreases in income.

2.12.   As a result of the comparatively low percentage of fixtures and the relatively small
        racehorse population in Scotland, it is estimated that: of the £11.9m of Levy
        revenue generated by Scottish punters, just £2.3m (19%) is retained within
        Scotland once it has been channelled through the industry in the form of prize
        money grants, integrity fees, fixtures fees, etc. There is therefore a net outflow of
        Levy revenue from Scotland to England and Wales of approximately £9.6m.
        Scottish Racecourses receive 6.9% of Levy expenditure distributed “for the
        improvement of racing” to British racecourses.

2.13.   The importance of Scotland to the British racing and betting industries is further
        demonstrated by the fact that: by combining the gross profit generated by Scottish
        punters (11%) with the gross profit generated by other British punters betting on
        Scottish races (7.2% across Britain), the total impact of the Scottish racing and
        betting industry on the GB totals £189m (17.4% of the total GB turnover / gross



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           profit on horserace betting). It should be noted that the majority of betting activity
           in Scottish shops is generated by events elsewhere in Britain.

   2.14.   In order to maximise revenue for the British racing industry, as well as for the
           Scottish economy, it is essential that there is adequate investment in all sectors of
           the Scottish racing industry and flexibility in race planning and fixture allocation
           policy to allow racecourses to plan effectively for the future.

3. Fixtures

   3.1.    Despite increasing the number of fixtures scheduled for 2006 to 99, the Scottish
           population is still generally under-served by the number of racemeetings. While
           9% of the British population live in Scotland, the country hosts just 7.1% of the
           British fixture list.

   3.2.    Potential exists for further fixtures to be scheduled on the turf tracks at Hamilton
           Park (1), Kelso (2) and Perth (4), without having a significantly detrimental effect
           on the condition of the racing surface or the provision of services. The
           management at Ayr Racecourse has recently leased an additional five fixtures, on
           a one-year basis, in order to maximise the use of the racing facilities and it is
           intended that that this number of fixtures should be maintained.

   3.3.    The most significant expansion of the fixture list will be caused by demand from
           the off-course betting industry for floodlit evening fixtures on all-weather surfaces
           during the winter. Plans for a floodlit all-weather track at Musselburgh would fulfil
           the criteria required in order to stage these fixtures, of which the racecourse
           management are seeking 40. Given the go-ahead, the new track will be the only
           all-weather facility in the north and would represent a significant incentive for
           owners and trainers to keep more horses in training throughout the year, but
           especially during winter.

   3.4.    Given the likely expansion of the fixture list, Scottish racecourses are seeking to
           stage in the region of 140 to 150 fixtures per annum, out of a GB total of around
           1,550 – 1,600 (approximately 9%). Several gaps exist in the programme of
           Scottish fixtures, especially during the months of March, October and November.
           Saturday afternoon fixtures generally represent the best opportunities to maximise
           off-course betting turnover and attract large crowds, and yet Scotland is
           scheduled to host just 12 such fixtures during 2006 and none during the months of
           January, May, July and August.

   3.5.    The requirement for racecourses to bid for leasehold fixtures and potentially to bid
           or buy racecourse fixtures, following the introduction of new fixture allocation
           procedures, signifies a major requirement for investment on the part of Scottish
           racecourses in order to secure fixtures. The allocation of fixtures to coincide with
           Scottish holidays will no longer be a simple, cost-free process, achieved as a
           result of common sense. In the event of uneven competition for fixtures between
           southern and northern racecourses, Scottish racecourses may require external
           financial assistance in order to expand, or even maintain the existing fixture list.


4. Race Planning

   4.1.    During the 2004 Flat season and 2004/05 NH season, 28.5% of the runners in
           Scottish races were trained in Scotland. Nearly 50% travelled from the north of
           England (north of Malton) and 20% travelled from the Midlands, South of England
           and Wales. Just 1.5% of runners travelled from Ireland. Less than 20% of runners
           on the Flat were trained in Scotland with more than 27% travelling from the
           Midlands, South of England and Wales.




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   4.2.   The average distance travelled by a horse to race in Scotland (round trip) was 348
          miles (402 miles for Flat horses), compared to approximately 230 miles for
          average British fixtures. Traditionally, owners and trainers of horses travelling to
          Scotland have been compensated by the offer of comparatively higher levels of
          prize money.

   4.3.   The introduction of Meritocracy has brought about a “cap” on prize values for
          certain grades of races, thereby placing a potential restriction on the ability of
          Scottish racecourses to stage races of a sufficiently attractive nature to encourage
          connections to travel their horses. Furthermore, the coupling of “meritocratic” race
          values with the auctioning of leasehold fixtures, has led to a situation whereby
          some racecourses are being required to run races at an inappropriate rating for
          the local horse population, simply to comply with the requirement to spend the
          value, of the sum bid, on prize money.

   4.4.   The central nature of race planning policy creates an unintentional barrier to
          racecourses comparing race programmes on a regional basis. Decisions
          regarding the rating bands of races tend to be based on the quality and quantity of
          the horses making up the GB population, as opposed to regional populations.
          During the course of the strategic review, many Scottish trainers expressed their
          frustration at the variable frequency of opportunities for particular horses.
          Significant benefits could be achieved by greater liaison between racecourses on
          a regional basis and the structuring of the race planning department on a regional
          basis.

   4.5.   Additional incentives to encourage competitive fields at Scottish racemeetings
          include the awarding of appearance money to all runners, or travel grants to the
          horses which are travelling the greatest distances.

   4.6.   However, the most significant long-term benefit would be achieved by
          encouraging growth in the local (northern) racehorse population, thereby creating
          a ready source of runners nearer to each of the Scottish racecourses. A bonus
          scheme for horses which are either trained in Scotland or owned by members of
          ROA Scotland (but trained elsewhere) is therefore under consideration. While
          funding for such a scheme will be sought by the racecourses in the medium term,
          it is anticipated that the Development Fund will assist in the funding of races in
          Scotland, which may otherwise be uneconomic to stage. Achieving an equitable
          distribution of monies flowing from the Development Fund is a priority for the
          Scottish racecourses.


5. Development of the Racehorse Population

   5.1.   Scottish owners spend approximately £6m per annum supporting 2.25% of the
          British racehorse population. Scotland’s training enterprises generate expenditure
          of £3.7m per annum in addition to employing approximately 160 full time
          equivalent personnel (excluding those employed in livery yards and breeding
          enterprises) who are likely to be responsible for a further £2m of spending locally.
          By stimulating a proportionate increase in the size of the horse population, to the
          number of required Scottish fixtures, it would be feasible to predict revenue
          generation three times the current amount and the direct employment of 480 full
          time personnel in rural areas.

   5.2.   Many factors contribute to Scotland being an attractive location from which to train
          racehorses. These include:

             Substantially higher values of prize money
             An abundance of knowledgeable staff
             Comparatively low land prices
             Relatively little vehicular traffic



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             Natural hills for exercising the horses
             Good road access to both Scottish and English racecourses
             Close proximity to two highly respected equine veterinary research centres.

   5.3.   However, the historical under-investment in facilities for trainers in Scotland has
          resulted in just 1.5% of British trainers being based north of the border. Urgent
          consideration must be given to the provision of facilities for both new and existing
          trainers.

   5.4.   While it is possible that some locations, such as the proposed all-weather track at
          Musselburgh and the community gallop in Hawick, may provide opportunities for
          the development of communal training facilities, development grants should be
          made available to trainers for new enterprises on farmland or other areas where
          diversification is being promoted by the appropriate government agencies. The
          HBLB has also expressed an interest in assisting with funding for high quality
          communal training facilities.

   5.5.   According to feedback from Scottish trainers, the proposed all-weather track at
          Musselburgh is likely to provide the most significant step towards developing a
          stronger local racehorse population. While it is currently uneconomic to transport
          horses of a modest ability south, to run on the all-weather tracks in the Midlands,
          the facility at Musselburgh will fill a much needed gap in the Scottish race
          programme. In addition to providing more opportunities for horses to race,
          especially during the difficult winter period, the all-weather track would be close
          enough to enable most Scottish trainers to give horses valuable experience in the
          form of a racecourse gallop and improve fitness during periods of prolonged
          adverse weather.

   5.6.   It is inconceivable that there could be any significant increase in the Scottish
          racehorse population without there being a corresponding increase in the number
          of Scottish owners. As just 2.3% of British owners are currently based north of the
          border, considerable efforts are required to promote the benefits of racehorse
          ownership in Scotland. Existing benefits include:

             Significantly higher prize money (17% higher for most NH races)
             Greater prize money return on investment for horses running over both codes
              (17.8% higher when compared with Britain as a whole)
             Enhanced services and facilities for members of ROA Scotland at Scottish
              tracks.

   5.7.   Further benefits for consideration, raised as a result of the consultation process,
          include:

             The reduction of commission in selling races from 50% to 15%
             The introduction of a bonus scheme specifically for Scottish owned and / or
              trained horses.


6. Staff Training

   6.1.   The racing industry directly employs a large and diverse workforce. However,
          recent concerns regarding the training of staff have centred mainly on the equine
          care sector, i.e. the provision of training to stable staff. The current turnover of
          stable staff throughout Britain, according to figures provided by Weatherbys to the
          BHB, is 25 – 27%. While measures are under consideration to help improve the
          retention of staff, current figures suggest that there is a requirement to train
          approximately 40 members of stable staff per year in Scotland.

   6.2.   In the event that the racehorse population in Scotland increased threefold over a
          ten year period, it would be necessary to create a further 320 full time positions.



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          Assuming that the retention rate for new staff can be improved to 85% per annum,
          this would require an additional 36 members of stable staff to be trained per
          annum, creating a total requirement of 76 Scottish trainees per annum.

   6.3.   Scottish Enterprise, through various government sponsored training schemes, is
          only permitted to fund external (outside Scotland) training providers where no
          appropriate provider exists in Scotland. Currently, there are no training providers
          in Scotland that have been approved by BHEST to deliver training to staff above
          the level of NVQ (or SVQ) level 1.

   6.4.   The BHB currently requires trainers to provide training for stable staff, under the
          age of 19, to a minimum level of NVQ 2. Assuming that 10% of new recruits are
          under this age, there will be a requirement to offer NVQ level 2 training to at least
          eight candidates per year. There may also be a requirement to offer on-the-job
          training to an additional 68 new recruits.

   6.5.   Similarly, the Jockey Club currently insists that all aspiring trainers complete a
          training course at the Newmarket based British Racing School before they can be
          granted a licence. The requirement to undergo three weeks of residential courses
          in the South is considered to be a disincentive to potential recruits to the training
          industry in Scotland.

   6.6.   Clearly, it would be in the best interests of the racing industry, as well as potential
          employees and trainers in Scotland, if appropriate training courses could be
          staged regionally. It is essential therefore that an appropriate training scheme is
          registered with the SQA in order to award an SVQ equivalent of the BHEST
          approved NVQ qualifications.

   6.7.   In addition, Scottish training providers should be encouraged (and given the
          financial backing and expertise) to obtain accreditation to award the BHEST
          approved qualifications. Alternatively external training providers should be allowed
          to contract to Scottish Enterprise in order to run the relevant courses in Scotland.


7. Industry Marketing & Communication

   7.1.   The 2001 Scoping Study, carried out by Stevens & Associates on behalf of
          Scottish Racing, identified a need for improved communication throughout the
          industry and particularly throughout the supply-chains that affect the industry.
          During the most recent consultation process, consistent support was voiced by all
          business sectors affected by the industry for a Scottish racing directory including
          contact details for:

             The racecourses
             Local hotels, hostelries and hotels
             Travel companies (including air, train, coach and taxi companies)
             Racehorse trainers
             Equine suppliers
             Racing journalists / media contacts
             Other associated companies and individuals.

   7.2.   While Scottish Racing Marketing Ltd is committed to providing on-line facilities
          along these lines, additional funding is required in order to support the collation of
          information and the initial production of a directory which can be circulated to both
          participants in the industry and spectators of the sport.

   7.3.   In addition to the above, respondents during the consultation process suggested
          two further measures to enhance communication and stimulate pride in the
          Scottish racing industry:




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             Regular (6-monthly) meetings between representatives of the racecourses,
              owners, trainers, breeders and racegoers in Scotland.
             An annual awards luncheon to celebrate the achievements of those
              connected with and participating in the Scottish racing industry.


8. Marketing of Racedays

   8.1.   As evidenced by the 42% increase in attendance since 1999, the Scottish
          racecourses have proved to be particularly successful in recent years at
          promoting racemeetings.

   8.2.   Research conducted throughout 2005, as part of the strategic review process,
          showed that 20% of all visitors to Scottish racecourses include at least one
          overnight stay as part of their racing excursion (including 35% of all visitors to
          Perth racecourse and 32% of all visitors to the Ayr Gold Cup Festival). This influx
          of “racing tourists” has a significantly positive effect on the business of local travel
          trade companies, especially accommodation providers, hostelries and restaurants.

   8.3.   While 32% of all visitors to Scottish racecourses were found to have travelled
          more than 50 miles, the distance travelled widely from course to course. At Perth,
          55% of all visitors travelled more than 50 miles. At the Ayr Gold Cup Festival, 8%
          of the crowd had travelled from Ireland, with several respondents extending their
          stay to visit Hamilton Park on the following Sunday.

   8.4.   The research showed that approximately 0.5% of visitors were from other
          overseas countries (excluding Ireland), including South Africa, New Zealand, the
          United States, Canada, Germany, Switzerland and Spain. Almost all overseas
          visitors described themselves as racing enthusiasts and had scheduled racing as
          part of their itinerary prior to leaving their home country.

   8.5.   The presentation of racing as a niche market to stimulate travel to Scotland is
          attractive to almost everyone associated within the Travel Trade in Scotland.
          While 62% of tourism companies interviewed stated that they were aware of the
          Scottish Racing brand, 81% of those interviewed were keen to receive more
          information about horseracing as a visitor attraction. The opportunity to promote
          several consecutive days of racing in Scotland during 2006 is actively being
          pursued by Scottish Racing Marketing Ltd, which is seeking commercial partners,
          in both the public and private sectors, to support the initiative.

   8.6.   Research conducted on behalf of the BHB and backed up by the findings of
          interviews, conducted during the Scottish racing strategic review process,
          demonstrated that the average group size attending the races is four. While 57%
          of racegoers stated that they were a guest of someone else, 28% stated that they
          were partly responsible for organising the trip and 15% that they had organised
          the trip themselves. Despite 87% of racegoers expressing a desire to return to the
          racecourse within a year, 86% stated that they did not know what the catalyst
          would be, to stimulate them to do so.

   8.7.   The emphasis of the racecourses, in promoting racegoing, should therefore be to
          mirror the existing pattern of the racegoing population. i.e. to encourage existing
          racegoers to plan more outings and to introduce more visitors to the sport. The
          data capture of contact details for new and existing racegoers is therefore a
          priority.

   8.8.   During the past year, Scottish Racing Marketing Ltd has enjoyed a successful
          marketing campaign, funded in part by the VisitScotland Challenge Fund. It is
          anticipated that recent research will provide new information to help focus future
          campaigns for the benefit of the entire Travel Trade sector in Scotland.




                                                                                               12
9. Racecourse Capital Developments

   9.1.   The facilities provided at each of the Scottish racecourses help to shape the
          remainder of the industry. Improved viewing, socialising and dining facilities help
          to encourage growth in the number of racegoers and racehorse owners. Similarly,
          improved track facilities (drainage, grass cover, track width, all-weather)
          encourage more runners and enable the racecourses to stage more fixtures,
          thereby simultaneously increasing betting turnover and stimulating growth in the
          horse population.

   9.2.   The total capital investment in facilities since 2001 has been £15m, the largest
          amounts being invested at Ayr (£6m), Musselburgh (£4m) and Perth (3m). Further
          investment in capital facilities are planned or anticipated at each of the Scottish
          tracks in the near future. All of the racecourses will be undertaking the
          refurbishment of facilities for racegoers where required. Approximately £750,000
          has been spent (or is currently being spent) at Scottish tracks on improvements to
          stabling and box parking facilities, including £550,000 for an entirely new stable
          yard at Hamilton Park racecourse..

   9.3.   Plans for a flood-lit all-weather track at Musselburgh Racecourse are advanced.
          The scheme will aid development of the Scottish horse population, with all of the
          associated economic benefits, by providing:

             Racing opportunities for horses during a period (October – March) when there
              are currently relatively few fixtures.
             Racing opportunities for horses in Scotland during a period (December /
              January) when the abandonment of turf fixtures is highly likely.
             Opportunities for racehorses trained in the north to run on an all-weather
              surface, the closest all-weather track currently being located at
              Wolverhampton and Southwell.
             An increased number of racing opportunities generally, making it more likely
              that horses of all abilities will be able to run.
             Facilities for the training of racehorses.

   9.4.   Furthermore, the additional fixtures required for the viability of the development
          will add to the critical mass of fixtures in Scotland, creating a fixture list of around
          140 fixtures (or approximately 9% of the GB fixture list). The addition of these
          fixtures will enable the employment of additional full time staff in Scotland (and the
          north of England) in order to fulfil a wide variety of raceday roles including:

             Catering
             Racecourse customer services
             Integrity services (Starting stalls / camera patrol / photo finish / etc)
             Racing administration (BHB / Jockey Club officials)
             Media coverage
             On-course bookmaking, including pool betting services

   9.5.   The realisation of the scheme is expected to cost in the region of £12M, of which a
          large percentage will be spent within the Scottish economy and utilising Scottish
          labour.

   9.6.   Following a long period of underinvestment, the management of Ayr Racecourse
          was taken over in 2003. A master-plan for the development of the racecourse has
          been established in order to secure the future of Scotland’s only Grade 1 track.
          The emphasis of the plan is to develop the potential of the racecourse to stage
          high quality racing in order to attract large crowds and maximise revenue from off-
          course betting and media rights.




                                                                                               13
   9.7.    In addition, the plan incorporates the development of facilities for use on non-
           racedays throughout the year. An enabling development, including housing on an
           unutilised part of the racecourse estate, has been proposed in order to fund the
           capital development of the racecourse. The entire project is anticipated to require
           funding in the region of £30M.

   9.8.    Preliminary research is being conducted at Kelso racecourse, with a view to
           examining the potential for further enhancing the facilities for customers. While no
           budget has been attached to the project, current ideas involve demolishing one of
           the low viewing terraces after the winning post and replacing the building with a
           grandstand offering improved viewing and accommodation for more racegoers.

   9.9.    These investments will have a direct and indirect impact on the economy, creating
           jobs in construction and other services, paying wages that are spent locally which,
           in turn, stimulates indirect spending throughout the community. Importantly, the
           nature of the investments will also create a significant uplift in the overall
           economic impact of the individual racecourses. For example, the planned
           investment at Ayr would generate an additional £17m spending per annum in the
           local economy and the planned investment at Musselburgh would produce an
           additional £9m of local spending.


10. Future Funding

   10.1.   The most likely proposal for a commercial mechanism to replace the Levy
           Scheme would involve bookmakers paying for a commercial package to include
           betting shop pictures and relevant on-course data. Given the nature of such an
           agreement, it would be essential for contracts to be negotiated collectively and the
           Scottish racecourses remain committed to working, through the RCA, with the rest
           of the industry to achieve a positive outcome for all.

   10.2.   The negotiation of a robust commercial package may be beset with legal
           difficulties, especially in order to gain the approval of all bookmakers, including
           betting exchanges, in Britain and overseas. The Scottish racecourses will
           therefore maintain a campaign for the retention of the HBLB, or the re-introduction
           of a similar statutory body, to run in parallel with any commercial agreement, until
           the mechanism has been proven, both in law and in practise.

   10.3.   Although Scottish punters generate approximately 11% of the Levy and Scottish
           racecourses are responsible for approximately 7.2% of British betting turnover,
           Scotland currently receives approximately 6.2% of HBLB expenditure (taking into
           account contributions to prize money, fixture incentives, integrity services,
           veterinary research grants, support for breed societies, education, etc).

   10.4.   Due to the lack of investment in Scottish training facilities, the proportion of funds
           retained in Scotland once it has been channelled though the industry, is just 2.6%.
           Clearly the Scottish racing industry would retain a greater proportion of revenue, if
           more owners and trainers were encouraged to base their operations in Scotland
           and the number of horses trained successfully in Scotland increased.

   10.5.   Regardless of the mechanism for generating revenue from the betting industry, it
           is essential that the focus of the Scottish racing industry should be directed at
           achieving equitable funding levels for the industry to achieve its main targets of:

              9% of GB racing fixtures
              9% of GB racing attendance
              9% of the GB racehorse population
              9% of GB betting revenue




                                                                                              14
11. Media Rights

   11.1.   The sale of television pictures and data to the broadcast media is another
           important commodity for the racing industry. While significant promotional benefits
           can be achieved by ensuring that commentaries and pictures are available on the
           appropriate media “platforms”, the product itself has a media value which needs to
           be safeguarded and maximised.

   11.2.   By 2012, it is anticipated that the current terrestrial television stations will be fully
           integrated with the digital television stations. Furthermore, it is possible that many
           “non-live” television programmes will become available via “video-streaming”
           internet connections, placing a greater emphasis on live content through digital
           channels. The horseracing industry needs to concentrate on striking the
           appropriate balance between free to air, pay per view and “red button” interactive
           revenue generation schemes within the new generation of media platforms.

   11.3.   The Scottish racecourses should ensure that, whatever their allegiance to existing
           television rights holders, they are able exploit the sale of their pictures rights for
           betting purposes during the same time frame from 2009 onwards.

   11.4.   Each of the racecourses will be responsible for controlling access to the
           racecourse on racedays, in order to maximise control of the collection of data and
           pictures for broadcast, thus safeguarding the ownership of the “rights”.




                                                                                                  15
Action Plan
Objective                     Target                        Action                                     Lead Body                Partners

Increase the number of        140 – 150 fixtures (Approx    Develop an all-weather track facility at   Musselburgh              East Lothian Council, BHB,
fixtures in Scotland          40 all-weather and 12 turf)   Musselburgh Racecourse                     Racecourse               HBLB, Tote / Bookmakers,
                                                                                                                                Racing GB, Caterers & other
                                                                                                                                suppliers

                                                            Lobby for the establishment of a fair      Scottish Racing / RCA    The RCA, BHB, HBLB, all 5
                                                            bidding system for the procurement of      Board Member             Scottish courses, Friends of
                                                            leasehold fixtures                                                  Scottish Racing

                                                            Develop funding initiatives for the        Each Scottish            Scottish Enterprise, Event
                                                            procurement of leasehold and               racecourse               Scotland, Bookmaker
                                                            racecourse fixtures                                                 partners and key suppliers

                                                            Secure the legal ownership of              The Racecourse           All racecourses including the
                                                            racecourse fixtures                        Association (RCA)        5 Scottish tracks

                                                            Lobby for the development of a             Scottish Racing          The RCA, BHB, HBLB, all 5
                                                            commercial system enabling the                                      Scottish courses, Friends of
                                                            transfer of racecourse fixtures                                     Scottish Racing

Increase / maintain the       Field sizes of 8 or more      Create more flexibility in race planning   Scottish Racing / RCA    The RCA, BHB, HBLB, all 5
competitiveness of races in                                 and prize values, for the racecourses,     Board Member             Scottish courses, Friends of
Scotland                                                    by reducing the impact of “Meritocracy”.                            Scottish Racing


                                                            Closer liaison between racecourses         Clerks of the Courses    The BHB / Scottish and
                                                            (both the Scottish and Northern tracks)    (race planners) at all   Northern trainers
                                                            with regard to pre-programme book          Scottish and Northern
                                                            race planning.                             tracks




                                                                                                                                                         16
Increase / maintain the        Field sizes of 8 or more      Regionalised race-planning, to create         The BHB                All racecourses, trainers
competitiveness of races in                                  more relevant race programmes
Scotland
                                                             Development of appearance money /             Each Scottish          Scottish Racing, ROA
                                                             travel grant schemes                          racecourse             Scotland, trainers

Maintain a race programme      Provision of races for        Secure an equitable distribution of           Scottish Racing /      The RCA, BHB, ROA, HBLB
that aids the development of   mares, novices, etc           monies from the Development Fund for          Scottish racecourses
the GB horse population                                      the financing of races in Scotland.

Develop the Scottish           Increase the number of        Promote, vigorously and widely, the           Scottish Racing        ROA Scotland, Scottish
racehorse population           horses in training in         benefits of racehorse ownership in                                   racehorse trainers, Scottish
                               Scotland to 9% of the GB      Scotland                                                             Enterprise, BHB
                               total (approximately 1,200
                               at any given time)            Introduce a bonus scheme for horses           Scottish Racing /      ROA Scotland, Scottish
                                                             owned by members of ROA Scotland              Scottish racecourses   racehorse trainers, Scottish
                               Increase the proportion of    (either trained in Scotland or owned by                              Enterprise, HBLB, BHB
                               Scottish trainers to 9% of    a resident of Scotland)
                               the GB total
                                                             Reduce commission rates in selling            Scottish racecourses   Trainers, owners
                               Increase the size of the TB   races to 15%
                               Breeding population
                               (mares) to 9% of the GB       Develop facilities for galloping / training   Musselburgh            East Lothian Council, HBLB,
                               total                         on the all-weather                            racecourse             Scottish trainers, Scottish
                                                                                                                                  Enterprise, SEERAD

                                                             Develop communal training facilities          Hawick community       Scottish Racing, HBLB,
                                                             within Scottish training “centres”            gallop association /   Scottish Enterprise, Local
                                                                                                           similar groups         Authority, Local Sports
                                                                                                                                  Council, SEERAD

                                                             Apply for grant funding under the Farm        Scottish trainers      Scottish Enterprise, Local
                                                             Development Scheme, for the                                          Authorities, Scottish Racing,
                                                             development / diversification of farms                               SEERAD
                                                             into training enterprises




                                                                                                                                                          17
Develop the Scottish             Increase the number of        Greater liaison between licensed horse    Scottish Racing         P-to-P Owners / Riders,
racehorse population             horses in training in         racing, point-to-pointing and flapping,                           Weatherbys, BHB, Arab
                                 Scotland to 9% of the GB      with the aim of encouraging the                                   Racing Organisation,
                                 total (approximately 1,200    graduation of jockeys and trainers                                Amateur Jockeys
                                 at any given time)                                                                              Association

                                 Increase the proportion of    Promote the economic benefits of          Scottish Racing         Scottish Enterprise, the
                                 Scottish trainers to 9% of    training in Scotland                                              racecourses, BHB, HBLB
                                 the GB total
                                                               Stage Pony Races and training days for    Scottish racecourses    The Pony Club
                                                               Pony Club children

                                                               Secure Single Farm Payment for            Scottish Equestrian     Scottish Racing,
                                                               breeders and trainers with horses at      Association (SEA)       Thoroughbred Breeders
                                                               grass in Scotland                                                 Association (TBA), BHB,
                                                                                                                                 MSPs, Friends of Scottish
                                                                                                                                 Racing, SEERAD

Increase the number of           Train approximately 66        Develop SVQ courses in Scotland in        Scottish Racing         SQA, BHEST, HBLB, BHB,
trained stable staff in          new members of staff per      accordance with the guidelines laid       Academy (Northern       Scottish Enterprise
Scotland                         year to SVQ Level 2           down by the Scottish Qualifications       Racing College,
                                 standard.                     Agency (SQA) and BHEST                    Oatridge College and
                                                                                                         East Lothian Council)
                                 In addition provide further   Develop an organisational structure /                             SQA, BHEST, HBLB, BHB,
                                 training for staff to SVQ     accredited training provider for the                              Scottish Enterprise
                                 level 3 and provide           provision of training to staff
                                 accredited courses for
                                 licensed trainers, etc.       Develop sustainable funding streams to                            SQA, BHEST, HBLB, BHB,
                                                               guarantee the continuity of training                              Scottish Enterprise

Improve communication            Provide a comprehensive       Maintain and develop the on-line          Scottish Racing         The Scottish racecourses,
between all sectors of the       information package by        database at www.scottishracing.co.GB                              Tote, BHB, HBLB, Sponsors,
Scottish racing industry,        2006 to aid communication                                                                       trainers, VisitScotland,
including constituent parts of   and access to trainers, etc                                                                     Scottish Enterprise
the supply chain




                                                                                                                                                           18
Improve communication            Encourage cross-              Develop and publish a guide / directory      Scottish Racing        The Scottish racecourses,
between all sectors of the       promotion of racing /         for the Scottish racing industry including                          Tote, BHB, HBLB, Sponsors,
Scottish racing industry,        tourism services.             contacts for racing businesses and                                  trainers, VisitScotland,
including constituent parts of                                 tourism partners                                                    Scottish Enterprise
the supply chain
                                 Provide opportunities for     Schedule bi-annual meetings to be            Scottish Racing        All constituents of the
                                 the discussion between        attended by representatives of the                                  industry
                                 key stakeholders in the       racecourses, owners, trainers, breeders
                                 sport                         bookmakers and racegoers club

Enhance communication,           Launch inaugural awards       Develop plans and secure funding for         Scottish Racing /      Friends of Scottish Racing,
stimulate pride and create       ceremony in 2006              annual award ceremony to be                  Scottish racecourses   Daily Record (media
awareness of the industry                                      scheduled for the first time in 2006.                               partner), Commercial
through an awards                                                                                                                  sponsors, Scottish
ceremony                                                                                                                           Enterprise, ROA Scotland,
                                                                                                                                   trainers and TBA
Develop and maintain the         Maintain listing of runners   Create a media tipster competition with      Scottish Racing        The Tote, racecourses,
media coverage of the sport      and riders, plus tips and     an annual cash prize for the top-tipster                            national and regional
in Scotland                      commentary, in all daily      to encourage regular publication of tips                            newspaper tipsters
                                 newspapers, especially        and appropriate editorial
                                 Scottish newspapers
                                                               Continue and develop the distribution of     Scottish Racing        Racecourses, media
                                                               information to the media, through press                             representatives, journalists
                                                               releases and media events

                                                               Develop a range of promotions and            Scottish racecourses   The Daily Record (official
                                                               competitions to highlight forthcoming                               media partner) & other
                                                               events                                                              publications, commercial
                                                                                                                                   partners including
                                                                                                                                   bookmakers and suppliers

                                 Introduce a weekly racing     Liaise with TV companies, production         Scottish Racing /      STV / BBC, Racetech,
                                 feature on terrestrial /      companies and media partners in order        Scottish racecourses   attheraces, GG Media,
                                 digital television            to develop affordable production                                    Racing GB
                                                               methods.




                                                                                                                                                             19
Increase daily attendance at   Continue to increase           Create themes and festivals within the       Scottish racecourses     Scottish Racing, Commercial
racemeetings                   average daily attendance       fixture list in order to develop events as                            partners, Scottish Enterprise,
                               at a rate of 5% per annum      tourist attractions and social events                                 Event Scotland, Local
                                                                                                                                    councils, VisitScotland

                                                              Maintain and develop the database of         Scottish Racing /        Commercial partners,
                                                              racing enthusiasts. Use the database to      Scottish racecourses     Scottish Enterprise, Event
                                                              encourage regular racegoers to                                        Scotland, VisitScotland,
                                                              introduce more people to the sport.                                   Local councils

Develop the tourism markets    Develop 50% growth in the      Develop a database of contacts and           Scottish Racing          Racecourses, Commercial
for racing in Scotland,        number of overnight stays      “niche” publications / newsletters, in                                partners, Scottish Enterprise,
especially from residents in   over a three year period       order to promote racing in Scotland as                                Event Scotland, Local
England, Wales, Ireland and                                   a tourism destination                                                 councils
other overseas countries
                                                              Develop a series of events / festivals /     Scottish racecourses /   Commercial partners,
                                                              tours (of Scottish racecourses on            Scottish Racing          Scottish Enterprise, Event
                                                              consecutive days) that will attract                                   Scotland, VisitScotland,
                                                              visitors from outside Scotland                                        Local councils

                                                              Liaise with key elements of the Travel       Scottish Racing /        Commercial partners,
                                                              Trade sector to develop partnerships         Scottish racecourses     Scottish Enterprise, Event
                                                              and a joint approach to attracting                                    Scotland, VisitScotland,
                                                              tourists                                                              Local councils

Provide top class facilities   The successful                 Obtain planning consent for the master-      Ayr and Musselburgh      Local authorities, Scottish
and services for racegoers,    development of Ayr and         plans at both racecourses and                racecourses              Executive, Commercial
owners, trainers, sponsors     Musselburgh racecourses.       commence / continue construction work                                 partners, HBLB
and horses in Scotland
                               The continued                  Maintain the ongoing programme of            Individual racecourses   Local authorities, Scottish
                               enhancement of facilities at   capital development / refurbishment at                                Executive, Commercial
                               all five tracks.               each of the 5 racecourses                                             partners, HBLB

                                                              Conduct regular customer research to         Scottish Racing /        Scottish Enterprise / HBLB /
                                                              determine requirements                       Scottish racecourses     RCA / BHB




                                                                                                                                                             20
Secure future funding for the    The successful                Negotiate a legally water-tight             The RCA, on behalf of    Scottish racecourses, BHB,
industry through the             development of a future       commercial mechanism for charging the       all racecourses          HBLB, Donoughue
provision of products and        funding plan ahead of the     betting industry appropriately for the                               Commission, Horsemen’s
services for the betting         abolishment of the HBLB in    products and services that they receive                              Group, Friends of Scottish
industry                         2009                                                                                               Racing

                                                               Ensure the continuity of the HBLB, or a     The RCA, on behalf of    Scottish racecourses, BHB,
                                                               replacement organisation until a            all racecourses          HBLB, Donoughue
                                                               commercial mechanism has been                                        Commission, Horsemen’s
                                                               introduced and is proven to be                                       Group, Friends of Scottish
                                                               sustainable                                                          Racing
Secure equitable “Levy”          Scottish beneficiaries to     Lobby for an equitable share of revenue     Scottish Racing /        HBLB, RCA, BHB, ROA,
funding for all sectors of the   receive 9% of HBLB (and /     from all funds, especially prize money      Scottish racecourses     Scottish trainers and
racing industry in Scotland      or replacement)               funds including the Development Fund.                                breeders
                                 expenditure
                                                               Support applications for funding to all     Scottish Racing /        HBLB, RCA, BHB, ROA,
                                                               sectors of the Scottish racing industry,    Scottish racecourses     Scottish trainers and
                                                               especially those that will aid                                       breeders, Scottish Enterprise
                                                               development of the horse population                                  and Local Authorities

Develop significant revenue      Secure appropriate income     Where possible, negotiate jointly for the   The RCA in conjunction   Scottish Racing, BHB, ROA,
streams through the              through the supply of         provision of pictures to the relevant       with individual          Production / Media
exploitation of media            pictures to all platforms     media platforms. All rights agreements      racecourses              companies including (but not
(picture) rights and             including: Betting shops,     should end in 2009, in order to ensure                               restricted to): Racetech,
associated technology            Terrestrial TV, Digital TV,   synchronisation with the Future Funding                              attheraces, GG Media,
                                 the internet and mobile       / Levy / Levy Replacement deal.                                      Racing UK
                                 phones




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