Does horseracing need to change to survive?

The horseracing industry has unquestionably suffered of late. While the reduction of fixed-odds betting terminal (FOBT) maximum stake limits to £2 is likely leading to the closure of thousands of betting shops in the UK, this has also led to numerous racetracks reducing their prize money.

Based on the government’s decision to bring the FOBT stake cut forward to April, the Association of British Bookmakers predicted around 4,500 shops would close, with around 21,000 people at risk of losing their jobs.

This will have serious implications on day-to-day horseracing. The industry will have little choice but to seek alternative routes to make sure the sport has a long-term and healthy future. Arena Racing Company (ARC), in charge of a large chunk of the prize policy, took the decision to cut winnings as a result of the FOBT maximum stake reduction, sparking outrage among horseracing trainers. Not only has ARC taken the decision to reduce its prize money, it has also been forced into making compulsory redundancies.

Both Lingfield and Southwell suffered and prize funds were reduced by ARC. As a result, fields have drastically reduced due to boycotting, organised by trainer Ralph Beckell.

Alan Pepperell, Head of Retail B2B at Racing Post, acknowledges the uphill battle horseracing is set to face, yet firmly believes there are other avenues which can be used as an alternative. He says: “We are not blind to the fact it is going to have an impact across the industry. The key thing for us is to work closely with our partners to provide more relevant and bet-stimulating content across all platforms to create an exciting alternative betting experience.”

Boycotting certain races may well allow trainers and owners to let off some steam and voice their opinion, but until let’s say, a prestigious event such as Royal Ascot is abandoned, it won’t make a blind bit of difference in the long term.

The races will continue, with a reduced field or not, is the message received so far from ARC, Gambling Insider reached out to ARC but received no comment. Philip Freedman, Chairman of The Horsemen’s Group, explains it is not just the FOBT’s which have made the Sport suffer of late. “The industry’s business model was predicated on a certain level of media rights income which is not going to be achieved,” he says. “While there remains the scope for increasing levy income – by making it payable on overseas racing, for example – as the government indicated it would consider, this will not make up the whole of the deficit.”

Sky Sports decided to launch a brand new, all-singing, all-dancing channel dedicated purely to horseracing on 1 January. But due to the boycotting: viewers even had to endure a one-horse race at Lingfield.

Nick Littmoden’s horse, Greybychoice was the only runner in the 4:10 at Lingfield on 23 February, although his trainer did choose to donate the prize money to the Injured Jockey’s Charity. This was not quite the racing Sky had in mind less than two months into its new venture.

The amount of fixtures is certainly a topic which needs reviewing. There were 100 meetings in February in the UK alone. Condensing fixtures could potentially increase prize funds and this could put an end to races with three or less horses competing.

Freedman says: “All parties in racing need to reassess the business model going forward. It may be that the current size of the fixture list is the optimal size to maximise racing’s income, but if that leads to a level of prize money which causes horsemen and their horses to leave the sport, then the hypothetical income it is assumed to generate will not be achievable.”

There’s no doubt racing has to become more competitive to survive. This will help to increase attendances up and down the country. Simply put, more horses will result in better quality racing, which should ultimately result in more people getting involved with the sport. FOBTs will be horseracing’s main hurdle for now, but it is down to those within the sport to show how it must survive during this period of uncertainty. One thing that is for sure is day-to-day racing is definitely lacking any kind of ‘x-factor’ appeal at present.

Freedman says: “Racing needs to assess its likely income over the next five years. It needs to consider what levels of fixtures will maximise its income, and the likelihood of the level of prize money which would ensure generating a sufficient horse population to service that fixture list.”

Plenty of betting shops appear to be down, but not out. Pepperell argues there is plenty of scope and opportunities if shops develop and progress within the digital age. “The digitalisation of shops is also needed to attract a younger audience and continued investment in self-service betting terminal (SSBT) and digital products is where bookmakers can innovate and move forward once again,” Pepperell says.

But with mobile betting appealing to the younger generation, 2019 certainly won’t be the year betting shops are rejuvenated. Perhaps operators must seek an alternative measure to make their product more appealing to the online market, rather than looking to improve the shops, which are quite frankly, becoming a thing of the past.

Pepperell believes horseracing will come out of these dark times, but only if the correct decisions are made from those in charge going forward. He says: “UK horseracing is still seen as the shining light of the industry in comparison to other territories across the world, where there is much more prize money on offer. Racecourses will need to make important decisions which may lead to short-term pain. However, it will survive the upcoming regulation changes”

A positive for the sport has been continued success of the Cheltenham Festival. The build-up to the four-day event has all but shown that the sport still has an awful lot to offer. There’s been no mention of boycotting, prize reductions or negative reactions from trainers, showing major events will still entice large crowds and punters alike. The day-to-day horse racing is what is suffering and it needs to get back on track and fast. Without doubt, the gambling industry is facing it’s largest obstacle to date within the sport. However, as an avid fan of the sport for many years, If there’s one thing I’ve learned, you should never tear up a betting ticket too early, and the same message applies to operators.

For more insightful interviews and industry news visit gamblinginsider.com