Dear Editor,

On Tuesday night last, I appeared on the programme Racing Business on Nationwide Radio, co-hosted by Dr Paul Wright and Mr Donovan Wilson, president of the Jockeys’ Agents Association. The guests were chairman of Caymanas Track Limited (CTL) Mr Tony Hart, president of the United Bookmakers Association (UBA) Mr Xavier Chin and myself.

In response to a question about a letter that CTL had written to Bookmakers, I responded that CTL was seeking to get some greater equity in bearing the costs of carrying-on horse racing in Jamaica. Mr Xavier Chin retorted that I had made an unfair statement. The programme did not allow me to challenge that assertion, but it is one that I cannot leave unchallenged.

The facts are that CTL incurs significant expenditure in putting on horse racing in Jamaica. The major costs of so doing amounted to some $1.025b in the financial year April 2008 to March 2009.

The Bookmakers without “making their own books” but using CTL’s product and relying on the odds declared at Caymanas Park, contributed to CTL’s expenses in putting on racing, by way of a rights fee, 1 per cent of their reported sales on local horse racing. This amounted to $17,653,116:47 in Financial Year 2008-2009.

When CTL sought to increase the rights fee from 1 per cent to 3.5 per cent of sales in December 2009, the UBA strongly objected to this. It was eventually increased to 3 per cent in January 2010 and 3.5 per cent since February 2010. With this increase, the total contribution by the Bookmakers to the cost of putting on racing by way of a rights fee, increased from the $17.65m in FY 08-09 to $34,504,757:60 in FY 09-10.

The UBA argues that the 3.5 per cent rights fee is exorbitant and accordingly responded by withdrawing all their sponsorships of races at Caymanas Park. Their sponsorship in calendar year 2009 had amounted to $4.5m.

The UBA argues that this rights fee cannot be seen as their only contribution to racing because they pay taxes to the Government. Indeed, they do. So too, does CTL. The Bookmakers pay a gross profits tax of 16.5 per cent, while the Promoter CTL pays a gross profits tax of 7.5 per cent.

In FY 08-09 Bookmakers paid taxes from their reported sales on local racing totalling $137m. If this amount paid as taxes by the Bookmakers were to be deemed to be a contribution to the cost of putting on racing at Caymanas Park, then the total contribution of Bookmakers in FY 08-09 would be rights fee of $17,653,116:47 plus taxes of $137,000,000, a total of $147,653,116:47.

This would translate to 15 per cent of the cost that CTL incurs in putting-on horse racing at Caymanas Park. If the cost of the regulatory agency, the Jamaica Racing Commission is taken into account, the Bookmakers contribution is 13 per cent of the cost of putting on local horse racing. However, in the same period Bookmakers enjoyed a 40 per cent share of the sales on horse racing put on at Caymanas Park. This has been the relative position over many years.

The pattern over many years therefore has been that the Bookmakers’ contribution to putting on horse racing in Jamaica (if taxes paid to Government is included) is somewhere between 12 per cent to 18 per cent, while their share of sales on horse racing is between 38 per cent to 43 per cent.

In the circumstances, I invite Mr Chin to reconsider his remark that the statement made by me was unfair. I also invite him to tell the public what he considers to be a “fair” arrangement between CTL and the Bookmakers, because sooner rather than later, for the sake of the survival of horse racing in Jamaica, what is “fair” must be determined and implemented.

Senator The Honourable Arthur Williams

Minister of State

Ministry of Finance and the Public Service