Who on earth is advising racing?

I have to say that I saw the BHA's press release in response to Betfair's announcement of its intention to float and shook my head in disbelief. Who on earth is advising these guys, and what on earth are they trying to achieve?

If you haven't seen their statement, you can find it here . If you haven't the time to read it, suffice it to say that they basically appear to be of the view that the current levy consultation can somehow scare investors off buying Betfair shares. I know Paul Roy has held that position for a while because he once told me over dinner ; but when he did, I genuinely thought that, in time, he would see how idiotic a suggestion it was. And that if he didn't, then someone would warn him off it as a strategy. Sadly for him and for Racing, neither appears to be the case.

OK... I have a vested interest here: as most readers will know, I am a shareholder in Betfair  - arguably a significant one; and  you could claim that I am therefore talking my own book. But I make no reference to Betfair's float, which I am restricted from discussing in any way, other than to use it as the context for the BHA statement. That statement reveals the astonishing inadequacy of Racing's leadership, as well as that of its advisers - should, that is, such people exist.

First, the very idea that anyone in the financial markets should give a monkey's about an on-going Levy Consultation, even if it had any merit or were likely to change anything, goes to underline just how stuck in the past Racing's leadership is. Yes: back in 2002, Racing was a significant part of a bookmaker's business. I am revealing very little, and in any case drawing on residual and previously-published knowledge, when I say that eight years ago, it constituted about 80% of Betfair's revenues. So, too, am I divulging no secrets if I state that now, it accounts for less than 35%. Indeed, I remember it getting as low as 21% of Betfair's weekly revenues, although admittedly that was in a seven-day period when the football calendar was strong.

How exact or up-to-date the figures are is academic. The fact is that today, Betfair (like most bookmakers) runs a global business, to which the relevance of British horseracing is, unfortunately, falling by the day. This sad and simple truth is clearly lost on Racing's leaders, who continue to play their cards as if they hold every trump when in reality they hold almost nothing. Indeed, most people have moved on to a different game.

Second, the idea that they think that the current Levy Consultation, or indeed that any Government analysis, is going to come down on their side, simply demonstrates that Racing's leadership is delusional. I have seen the submissions on the current Levy Consultation both from Betfair and from William Hill, and even taking into account any residual bias I might have in my DNA, the two are chalk and cheese. William Hill's is unpickable almost paragraph by paragraph - a task I am happy to undertake on this blog should anyone care; while Betfair's, I suspect, will be dismissed by both Racing and Hill's as 'spin', without them actually being able, substantively, to counter a single point within it. (If I am wrong, either is welcome to send me their counter, and I will publish it here with pleasure.)

Despite that - indeed, in advance of the publication of either submission - Racing has seemed to want to make great play about the fact that it has government on its side , despite what seemed to me to be the most evenly-handed announcement the Racing Minister could possibly have made. Why Racing wants to read into his statement a positive for its sport, or make a great show that it 'has been in close dialogue with government...for a number of months' (for which read "we've been lobbying them; but by the way, so has everyone else") I have no idea. Perhaps it believes it can create a self-fulfilling prophecy. Perhaps its political advisors want to persuade it that they are making progress in their campaign and are worth whatever money they are charging. Perhaps they just live in Cloud Cuckoo Land. I don't know.

But it seems clear to me that Racing's failure to understand much about anything, as underlined by the release put out yesterday in connection with the Betfair float, lies deep within its psyche. Any political observer with the smallest modicum of observation or nous will tell you that any leadership, of any organisation, that genuinely believes today that it is about to secure a big boost to its revenues prompted by government, in the context of a national economy which is suffering cuts at every level, is simply  deluded about itself, its industry, and the wider world.

In fact, I would argue that - far from putting out punchy press releases attacking something which the BHA (as a public body) has simply no remit to get involved with (leaving aside entirely whether it actually advances their cause, or makes even the first bit of sense) - Racing's leaders need to be really careful. It seems to me to be as likely, in the current climate of austerity and cuts, that the Government would be happy to rid itself of an annual levy debate by forcing some racecourses into closure - knowing that this year they would be doing so in an environment where so much is already closing and so many jobs are already being lost that no-one will shed an additional tear - as it is that it will come down on Racing's side and give it a boost to its revenues.

In fact, following on from the BHA's press release about Betfair's float, I would go so far as to say this: if, as part of this current round of talks, the Government endorses a change in the Levy process in Racing's favour at the expense of exchanges (that is, by identifying any section of Betfair's customers as people who should be paying the levy in a way that is not consistent with the customers of other bookmaking operators), I will run naked down High Holborn and donate £1,000 to a charity of the BHA's choice; providing, as part of the bargain, that Nic Coward and Paul Roy resign within 24 hours of it becoming apparent that the government decision is to the contrary.

It might seem like a comedy bargain to strike now. But let people be under no illusions that there is a sensible path for Racing to tread, and it is the people running Racing who are resolutely refusing to tread it. When their departure from office is followed by the closure of racecourses around the country as a direct result of the utter folly of their one-eyed, obsessive, leadership, may people in Racing remember for how long they were warned not to follow them, like lemmings, over the cliff.