Greyhound racetracks
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
This instruction applies to all greyhound racetracks.
Greyhound racetracks are encountered in a variety of guises; some of a sophisticated nature with substantial amounts of spectator accommodation, restaurants, etc. others consisting of little more than a grass circuit. Frequently tracks are used additionally for ancillary activities such as football, stock car racing, athletics, etc.
Official greyhound racing is governed by the National Greyhound Racing Club (NGRC) which is responsible for the registration of dogs, the licensing of racing personnel and the maintenance of racing rules. The larger and more important tracks operate under the auspices of the NGRC, but a majority (and these comprise mainly the less sophisticated circuits) choose to operate under their own rules. Small tracks of this kind are often referred to as ‘flapping tracks’ (though the origin of the word is unknown). The Greyhound Racing Association Ltd is the largest single operator of ‘official’ tracks; the remainder are operated either directly by bookmaking concerns or are otherwise privately owned.
The popularity of greyhound racing, judged by reference to numbers attending meetings, has declined rapidly over recent years. The root of the decline may be traced back to the Betting and Gaming Act 1960 which legalised off-course betting. Previously greyhound racing had provided almost the only legal facility for cash betting easily accessible to an urban population; thereafter cash betting opportunities were everywhere easily available through licensed betting offices. As with many sports the decline in attendances has been exacerbated by competition from many other forms of entertainment and leisure pursuits, and indeed today the sport is regarded by many as little more than a servant of the gambling industry. An illustration is provided by the introduction of afternoon racing purely as a medium for betting, but with little hope of the tracks attracting significant attendances. These “BAGS” (Bookmakers’ Afternoon Greyhound Services) meetings are an important part of the fixture lists of many tracks. Admission is often not charged.
The totalisator at greyhound racetracks is normally operated by the occupier of the track (in contrast to the tote at horse racecourses) and the money retained from amounts staked forms an extremely important (if not the most important) element of gross receipts upon which many stadia are heavily dependent. The operator is limited in the maximum percentage that can be retained by virtue of the Betting Gaming and Lotteries Act 1963 and subsequent Dog Racecourse Totalisator (Percentage) Orders, and whilst in 1963 the maximum permitted deduction was 6% the level has risen over the years to 17½% (December 1980) where it remained until reaching the present level of 29% in November 1991. Operators are not however permitted to exclude private bookmakers from their tracks (indeed they must make space available and are limited in the amounts they can charge) and intense competition there from means that in practice the full tote deduction is not always made.
Primary Description: LX
List Description: Greyhound Racetrack and Premises
Scat Code: 121
Scat Suffix: S
This is a specialist class of property, to be valued by Specialists in each Business Unit.
The Class Co-Ordination Team has overall responsibility for the co-ordination of this class. The team is responsible for approach, accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers and referencers have a responsibility to:
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follow the advice given at all times
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not depart from the guidance given on appeals or maintenance work without approval from the co-ordination team
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seek advice from the co-ordination team before starting any new work
Other than planning and adherence to the provisions of the Licensing Act 2003, no specific legal framework exists for this class of property.
Buildings should be measured to net internal area (NIA), in accordance with the VOA Code of Measuring Practice with details of the allocated use provided. The extent of the grandstand and track should be highlighted on a site plan.
Where the property generates additional sources of income from non-greyhound racing activities for example, car parking charges, car boot sales, full details should be obtained so that the value of this additional revenue can be reflected in the valuation.
Surveys and plans should be stored in the property folder of the Electronic Document Records Management (EDRM) system.
8.1 Rental Basis
Rental evidence is known to be limited, but due regard should be had to reliable information when available. Rents should be analysed and expressed in terms of a percentage of gross receipts in order that a general base for valuations may be established.
8.2 Receipts Basis
Where full accounts are not available valuations should be based on a percentage of Gross Receipts (net of VAT). The appropriate yield should ideally be taken from comparable evidence but see the relevant Practice Note for further guidance.
The adopted Gross Receipts should be that which would have been agreed between the parties as at AVD, looking forward and taking into account perceived trends, risks and uncertainties at that date.
Receipts and Expenditure based valuations are covered in RM 4:5, but valuers should be wary of placing too much reliance on a strict profits approach, particularly where low or nominal assessments are thereby produced. Such answers will normally invalidate the method being used, and this is particularly so where tracks are occupied by bookmaking concerns. Given the hidden benefits accruing to such companies by way of off-course betting and the consequent undoubted value of the hereditament to them, it is most unlikely that a landlord would be prepared to accept, or indeed a tenant expect to pay, a nominal rent. In certain circumstances it may be that tracks in apparent financial difficulty would attract a bid from a bookmaking concern in order to protect their outside interest.
Where ancillary uses, such as those referred to in paragraph 1 above, are carried out by the track operator the value of such uses will of course automatically be reflected in accounts used. In other cases, where that ancillary use is carried out by another in circumstances which do not give rise to a separate assessment, a practical approach is to add a rental value appropriate to the ancillary uses to the value of the track itself based upon accounts.
The approach to the valuation of associated kennels and training tracks will be similar, but where such facilities are run by the track operator but are not within the curtilage of the track itself consideration must be given to an appropriate division of the accounts.
All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant scat code.
Other support available:
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Survaid
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Class Co-ordination Team
1. Market appraisal
1.1 The market for greyhound racing continues to be in decline. There are now only 19 regulated racetracks and 3 independent racetracks remaining. Unable to continue for the purpose for which they were built the potential for redevelopment is often a reason for closure especially as several are located in urban city environments.
1.2 Attendance at racetracks has been in sharp decline for several years with racing concentrated into evening and weekend sessions. Daytime sessions are primarily used to sell TV coverage to bookmakers and sports channels, and actual crowd attendance is minimal. Sometimes greyhounds are racing in empty stadia purely to facilitate providing races for the betting industry which provides the main source of income for the sport.
1.3 In common with other sports the COVID-19 pandemic had an impact in preventing any spectators entering the stadiums in the period leading up to the antecedent valuation date (AVD) (1 April 2021). Details of the various restrictions implemented by statute in response to the pandemic, and of the vaccination rollout can be found online. In February 2021 the UK Government published its Roadmap out of lockdown for England which set out four steps to relax restrictions. Step 1, easing restrictions on outdoor gatherings, had already taken place by the AVD.
The later three stages of the Roadmap for England included
- the opening of outdoor hospitality, and non-essential retail (Step 2, no earlier than 12 April);
- most legal restrictions on meeting others outdoors to be lifted, opening of indoor entertainment venues such as cinemas and casinos (Step 3, no earlier than 17 May); and
- the removal of remaining restrictions on social contact (Step 4, no earlier than 21 June).
1.4 It was not until the 19th July 2021, following the Prime Minister’s announcement that Step 4 on the roadmap would proceed as planned that spectators fully returned. The situation in Wales, both leading up to and after the AVD, was similar although not identical.
2. Changes from the last practice note
2.1 There have been no fundamental changes since the last practice note.
3. Ratepayer discussions
3.1 There have been no 2023 List discussions on this class of property.
4. Valuation scheme
4.1 In the absence of reliable rental information and when accounts are available it is essential that information is provided for at least three years prior to the AVD. This will then give a comprehensive guide as to past trading achievements, identify any trend and enable the fair maintainable trade (FMT) to be estimated.
4.2 The effects of the COVID-19 outbreak need to be considered as they would have been anticipated by the parties at the AVD. Trade evidence that includes long periods of lockdowns is unlikely to provide good evidence of the FMT at the AVD. Valuers are advised to take as their starting point the closest reliable trade, which is likely to be the 2019/2020 trading year (ending March or before) and any previous trading years. Any short periods of lockdown within those years will need to be adjusted for.
4.3 Having established the likely FMT for the 19/20 trading year (ending March or before), the valuer should then consider any further adjustments needed to reflect the receipts envisaged as of 1 April 2021. The rental bid of the hypothetical tenant at the AVD will take into account not only the trade immediately achievable at AVD, but the trade over a period of time ahead, as they are assumed to be taking a tenancy with a reasonable prospect of continuance.
4.4 The bid range to be applied for 2023 valuations is between 4% and 8%. The relative level of turnover and ease of operation/maintenance will determine where in the range a particular property should sit.