Horseracing: a pivotal year in the saddle

Financially, due to the Cheltenham Festival and Royal Ascot being in favour of the punters, has it been an expensive year for operators? How does this impact the industry?
“As we saw with the shock drop in levy yield this year, a low win margin for betting operators has a direct impact on racing. It’s unlikely to be causing great concern with operators, however, especially as part of the cause of the shortfall was ultra-competitive pricing and offers during the major festivals.

“Sky Bet, for example, offered money back as cash for losing bets at Cheltenham. That hit the levy, but it also led to their app being the most downloaded in the UK. Their argument would be that this results in more people betting on racing, giving the sport a more positive long-term outlook.”

TV audiences have continued to increase, especially reflecting on the Grand National and festivals listed above. It’s great to see more people interested in racing, but has this been a factor to the poor year for the bookies? I.E. Tiger Roll’s National success, Dettori’s rides at Royal Ascot.
“Any increase in audience is good news for everyone concerned with racing. It certainly might mean increased short-term losses as results favourable to punters will be larger than they would otherwise be, but if the sport – and the firms that bet on it – are to thrive we obviously need to grow the audience.”

There are plenty of ongoing talks being held about prize money being reduced within the sport, as well as less meetings. Do you think meetings are being reduced because of the prize funds situation? How can these issues be resolved?
“Cutting the fixture list is a flawed response to low prize-money. Fewer fixtures means less levy and less media rights income, so the idea that it will result in increased prize-money at the remaining meetings doesn’t add up – it is more likely to make the overall pie smaller, resulting in even lower prize-money. 

“Unfortunately, racing’s prize-money situation is going to get much worse before it gets better. Thousands of betting shops are closing following the reduction in FOBT stakes, with the overall impact to the racing industry an estimated £40-60m shortfall in levy and media rights income. 

“Proposals to extend the levy to overseas racing or even move it to a hybrid turnover model may ease the pressure on racing, but that relies on political intervention at a time when Westminster has far bigger fish to fry. And if there was a change in government, there is no guarantee it would be friendly to racing.

“The only reliable solution for racing is to grow its popularity among bettors. The sport needs to work with the media and bookmakers to ensure it is innovating its product, telling stories that engage the public and delivering a fixture list that engages both digital and betting shop punters.”

Do you believe it has been a successful or bad year for horse racing? Why do you think this?
“In many ways it’s been a great year for racing, with stories such as Tiger Roll, Bryony Front, Enable, Frankie Dettori and Khadijah Mellah really resonating with the public. TV audiences are up, track attendances are stable and betting turnover looks solid. There’s lots to be positive about in racing right now, but it’s hard to ignore the storm clouds on the horizon: prize-money, welfare and anti-gambling sentiment. Racing needs to work with its partners in parliament and the betting industry to ensure these issues are being appropriately managed.”

How can horse racing improve going forward/before the jumps season returns?
“The crucial problem facing horse racing is that its key stakeholders – horsemen and racecourses – have radically different ideas about how the industry should be run, and both have the power to veto proposals they don’t like. Therefore, it is difficult for the sport to produce a coherent commercial strategy for the future. Getting the tracks and professionals on the same page, or otherwise finding a more sensible way to run the sport, is the most important thing racing can do.”

Horse racing remains fairly untouchable when it comes to TV advertising; do you think this will continue or does the sport have to look at alternatives in the coming years? Is it vital for horse racing to survive?
“TV advertising is crucial to the future of free-to-air TV coverage of racing, since without it the sport would be of limited or no interest to a major commercial broadcaster like ITV. The crown jewels – Cheltenham, Royal Ascot, the Grand National and so on – would probably get snapped up, but it is hard to imagine the sport would enjoy anything like its current degree of coverage.

“Right now, the sport is excluded from betting operators’ self-imposed advertising restrictions, and when politicians have discussed a broader ban they’ve often proposed excluding racing. Hopefully that would remain, but given the tenor of the debate around gambling in parliament and in the media it is not difficult to foresee more sweeping restrictions being proposed in the future. 

“If that came to pass, and racing lost some or all of its terrestrial coverage, that would have a major impact on the sport’s visibility and popularity.”