Arc and Martin Cruddace

As new year's messages go, there have been cheerier communications. "Unfortunately I can't be optimistic for the near future," Arena Racing Company chief executive Martin Cruddace replies in matter-of-fact fashion when asked about the state of the British racing nation.

"I do believe the strength of the sport means that we will recover in time but it will be painful," he adds.

Cruddace is speaking at Arena Racing Company's (Arc) headquarters in London's Millbank Tower as one tough year for British racing is ending and another crucial 12 months for the sport is about to begin.

Since becoming head of Arc, the largest racecourse operator in Britain, in 2015, Cruddace, 59, has become one of the most powerful figures in British racing and been at the heart of the changes that led to the introduction of Premier racing this year and efforts to counter the potentially catastrophic consequences of affordability checks.

The same year Cruddace joined the company, Arc set up The Racing Partnership, which represents the media rights of its 16 courses plus four small independents, so he is well placed to talk about the finances of British racing, its income from betting, and what might be damaging them.

In October he wrote to culture secretary Lucy Frazer to tell her that affordability checks already introduced by bookmakers had resulted in more than £1 billion of online betting turnover on British racing being lost since 2021. The government's proposals to formally introduce affordability measures would cost British racing £250 million more over the next five years, Cruddace warned.

Asked if the trends had improved since issuing that warning, Cruddace does not have good news.

"It's worse," he says. "The November numbers were very unpleasant reading."

British racing has been lobbying ministers hard to persuade them to think again about their proposals, including the launch of a petition by Cruddace's Jockey Club counterpart Nevin Truesdale which reached 100,000 signatures – enough to be considered for a parliamentary debate.

Cruddace is not, however, expecting a U-turn from the government.

"I think it's going to be quite difficult, notwithstanding the brilliant work that Nevin Truesdale did with the petition, to persuade the government to row back from the principle," he admits.

Nevin Truesdale: "If British racing is to thrive in future, we need to make the sport as accessible as possible for everyone"
Nevin Truesdale: petition signed in the name of the Jockey Club chief reached 100,000 signatures
He is more optimistic about efforts being made by ministers and the Gambling Commission to pressurise bookmakers into introducing uniform affordability standards as the wait for a 'frictionless' system goes on, and also about the "concrete assurances" from government that the promised regime will indeed be frictionless.

Cruddace adds: "What we and the betting companies need is certainty and I expect some certainty by the end of the first quarter. I hope that really is the nadir of our position and the racing industry and the betting industry can grow again."

Gambling Commission figures released in November showed that Cruddace's estimate for the impact of affordability checks on betting turnover on horseracing was very close to the mark.

"The idea that that lost £1bn of turnover is all problem gambling is for the birds," Cruddace says in typically forthright fashion. "My big concern is that I believe the black market has now taken firm root and if we don't act soon those roots will grow exceptionally quickly and be very difficult to control.

"I've had any number of trainers send me texts and emails they've received from illegal bookmakers offering bets at any time of the day or night, no affordability checks, no 'know your customer' checks, nothing. A real wild west.

"I really do think the government and the commission need to start taking that threat much more seriously than they have done so far."

'Affordability is going to come home to roost'

Whatever the government decides, the impact of affordability checks, as well as rising costs, are behind Cruddace's gloomy forecasts for the near future.

"We have paused all capital investment," he says. "We had some grand plans that are not going to happen. Similarly, prize-money for 2024 will be stagnant at very best, notwithstanding some of the other initiatives that we have.

"That is a direct consequence of affordability coming on top of the cost of living. For me it cannot be a surprise to anyone that affordability is at some point going to come home to roost."

Talk of stagnant prize-money is unlikely to go down well with some other sectors of the sport but Cruddace says Arc tries to engage in regular communication with participants.

He adds: "Rightly or wrongly, when I joined in 2015 our prize-money was £11.5m, and in 2024 it is going to be £25-£26m, which is probably at least three million less than it would have been but for the impact of affordability.

"We've come a long way. We've got the three-day Lingfield Winter Million, we've got the £1m all-weather bonus scheme, we have the Racing League which is £300,000 prize-money per Thursday, and we have the All-Weather Championships finals as well. Of course I understand prize-money is a really important part of the business models for the participants, I accept that."

However, there are a number of participants who do not believe Arc does enough to reflect that importance. That is especially true when it comes to the thorny issue of media rights payments from bookmakers, which many in racing believe do not find their way through to prize-money in sufficient quantity.

Cruddace says that Arc faces a "continual struggle" to provide a return to its shareholders and dismisses accusations that media rights money is being squirreled away.

"Those who want to continue to think that, it's pretty pointless arguing with them," he adds. "It's very difficult to argue with people who leave rational thought at the door and are not prepared to change their view no matter what you say and I won't engage with those people."

Nevertheless, the calls from participants for racecourses to be transparent about what they receive in media rights payments will not go away, and were given significant backing before Christmas when BHA chief executive Julie Harrington told guests at York's prestigious Gimcrack Dinner, at which Cruddace was present, that transparency on how money flows through the sport "needs to be addressed".

Racecourses, and not just those falling under Arc's aegis, have repeatedly argued that the transparency being asked for is impossible because of commercial confidentiality, and Cruddace, no doubt speaking diplomatically, describes Harrington's comments as not being "the most helpful".

BHA chief executive Julie Harrington said work on the industry strategy was entering "an important and exciting phase".
Julie Harrington: BHA chief's Gimcrack Dinner comments were not helpful, says Martin Cruddace
Credit: John Grossick (racingpost.com/photos)
Cruddace, speaking before the Jockey Club announced its pledge to be more transparent about its finances, maintains focusing on media rights fails to acknowledge the complexities of racecourse economics, arguing that a holistic view of costs and revenues is required.

"Each racecourse has the same cost base," he says. "We have staff, we have prize-money, we have utilities, we have vets, we have doctors, we have vehicles, we have outside broadcast trucks, we have cameras, we have data and picture distribution mechanisms, we have BHA fees. All of those are one big cost base.

"There are two business models for how you meet that cost base. The first business model is attendance and hospitality, and I would love us to have 60,000 people, contributing over £100 a head over five days.

"The other business model is more media rights-led. We run 586 fixtures and all but 100 make a substantial loss without media rights so that's our business model. This fixation on one income line is economically illiterate.

"Those racecourses that stand up and say, 'We give 100 per cent of our media rights to prize-money', it demonstrates a level of economic naivety that would be embarrassing for a five-year-old."

Cruddace does concede they could communicate more to participants about racecourses' cost base and the issues they face, especially on affordability. However, he adds: "What I am not ever going to allow is for a trainer or an owner to tell this company how it should be run and what it should spend money on.

"I'm not saying there is not work to be done to talk about our respective businesses to each other but focusing on one income line, given how I have explained how the two business models work, is artificial."

Premier racing 'is evolution not revolution'

Cruddace acknowledges that if an owner or trainer feels Arc's prize-money is not good enough, then they have an "independent decision" on whether to enter their horse. However, Arc was the subject of boycotts five years ago over prize-money levels and Cruddace had a stark warning for anyone thinking of repeating such action, which he describes as "completely and utterly illegal".

He adds: "I think it is very important for people to understand that I and other chief executives of racecourses have a fiduciary duty to our shareholders to protect their businesses and I will have no hesitation in protecting our business from illegal activity."

British racing is attempting to find other ways of boosting prize-money as part of a wider industry strategy, of which this year's fixture list and the introduction of Premier racing has been the first manifestation. Cruddace is a member of the commercial committee, the new body set up as part of British racing's governance restructure, which recommended the changes to this year's fixture list to the BHA board.

Premier racing has met with a lukewarm response in some quarters but Cruddace is a firm believer that Rome was not built in a day.

"Of course there's a lot more work to do and it's trite to say but it's evolution not revolution," he says. "We're creating a new product. Of course it needs to iterate over the course of the next two years. It's not going to happen overnight and those that expect it to happen overnight are probably not quite realistic."

Two advertising boards were used to promote the start of British racing's Premier project at Cheltenham on New Year's Day
Action from Cheltenham's Premier raceday on New Year's Day
Credit: Edward Whitaker (racingpost.com/photos)
The first Premier meeting at Cheltenham on New Year's Day attracted just 49 declarations, but Cruddace does not believe jumps racing should be the concept's focus.

"I think that the next piece of work is to say why we're doing Premier racing and for me it's to attract international inward investment," he says, "through horse ownership, participation and all of those good things, but also it is to create something of real value as an export.

"You are driven to the conclusion that we need to consider the next iteration to be heavily focused on Flat racing and higher-quality Flat racing, together with good quality all-weather racing, which has a massive international appeal."

Cruddace believes the sport has to accept there is not an international market for betting on jumps racing.

"That doesn't mean that we don't fully invest in and support the top part of our jump racing," he adds. "We know how attractive it is to punters and to racegoers in this country, of course it is. However, the next iteration has to focus on high-quality Flat racing."

Cruddace also believes that now is not the time to throw money at marketing Premier racing.

"Actually, as we develop and iterate over the year, there will be a time when this is the time to really invest in marketing," he argues. "That doesn't mean we invest nothing in marketing now, but we will know when the time is right to say we have something now that works."

He adds: "There are, of course, people that want to stab it before it has even been born but I urge the industry to get behind it. It is not right, it can be improved, but it's a start."

'The BHA should always understand that is its DNA'

Rows between Arc and the BHA in recent years precipitated the change in British racing's governance structure which resulted in the BHA board becoming the sport's ultimate decision-making body, advised by the commercial committee on which Cruddace sits.

Cruddace describes the new structure as being "different gravy" to what went before, when individual stakeholders had the power of veto over decisions.

He adds: "What I have been delighted about is that those, including me occasionally, who have not got their way have accepted, they've trusted, they've had their say, they've accepted the outcome and we haven't seen too much evidence of people rushing off to complain in the Racing Post.

"I've been quite encouraged by that in a way, which is the way forward."

Arc's relationship with the governing body has not always been easy, notably when the group accused it of helping to torpedo a deal with the Thoroughbred Group in 2021 which would have enabled it to stage nine-race cards during the all-weather winter season, but Cruddace describes the BHA as "world-class" in regulation.

"The BHA should always understand that is its DNA – to regulate the sport and its participants," he adds.

"It's easy to criticise the BHA but I think it does a very good job in the circumstances. If Julie could steer away from throwing grenades that have certain consequences that would be great but I have already forgiven her."

Chelmsford
Chelmsford City: legal challenge to the BHA arguing the fixture process is unlawful
Credit: Justin Setterfield (Getty Images)
The latest racecourse challenge to the BHA has come not from Arc but from Chelmsford City, which has sent a letter before action to the governing body, a precursor to legal action, arguing the fixture process is anti-competitive and unlawful.

Chelmsford's dissatisfaction stems from the disadvantage it feels it has compared to the likes of Arc over racecourse ownership of fixtures. Cruddace says he has not seen Chelmsford's correspondence with the BHA but, unsurprisingly, forcefully rejects any challenge to the status quo.

He says: "It is absolutely clear that the ownership of racecourse fixtures is settled, otherwise why has the BHA approved the regular transfer or sale of fixtures between racecourses?

"It is because there is a proprietary right in those racecourse fixtures and any challenge to that proprietary right will be met with a nuclear response from us and I imagine from my colleagues at the Racecourse Association as well."

Cruddace has been in charge at Arc for more than eight years but there is no sign of him wanting to leave the hot seat just yet.

He refers to the "pyramid" he is trying to build at Arc, a structure whose base he says needs constant repair as outside forces come along to "blast it", and talks of the support he receives from Arc's owners, the Reuben Brothers.

"However bad a chief executive I am, I'd be a lot worse if it wasn't for my shareholders," he says. "Subject to their will there's no immediate desire to do anything else, even though frequently I have to go and see them with a book down the back of my trousers.

"It's such a privilege to work with such people. I hope I have the energy to complete the pyramid we are trying to build."

As for the wider future for British racing, Cruddace says that given certainty on affordability checks and levy reform, along with rewards coming from Premier racing, the mid-to-long-term outlook for the next three to five years is positive.

However, he adds: "I think the next two or three years we are navigating extremely choppy waters and I think we are not really as much in control of our steering as we would like to be.

"The more that we can be cohesive and avoid shouting from the touchlines, the more progress we will make. But I think that's a new year's wish that is one too many."