For a sport partially funded by punters and media rights deals, the latest financial reports into horse racing make for worrying reading.
According to data presented by the UK Gambling Commission, online betting turnover specifically for horse racing fell by a staggering £1.75 billion in the financial year 2022-23.
The total amount wagered was £9.12 billion, but that was way down on estimated putting the anticipated figure closer to £10.5 billion.
And this ‘black hole’ of funding could have further ramifications for a sport seemingly blighted by a lack of financial support and interest from cash-rich prospective owners.
Down a Black Hole
The Racing Post, as you might expect, have tried to align the downturn in turnover with affordability checks – the measures introduced at some bookmakers which require them to ask for supporting evidence from punters that lose a certain amount per month.
The logic is that such intrusive checks are a major turn-off for punters, perhaps forcing some to check out black market and offshore betting sites instead – revenue that would not have been recorded in the Commission’s spreadsheet.
Whether that’s the actual reason or not remains to be seen. Indeed, other datasets suggest that ‘off course’ horse racing betting turnover has actually been falling year on year since 2009 – suggesting that affordability checks nor the pandemic can be used as rationale.
In 2009, the total turnover for off course horse racing betting was a cool £5.7 billion. By the 2018/19 financial year that had fallen to £4.1 billion, with the pandemic – and the reduced racing fixture list – exerting more downward pressure.
But even in the aftermath of that, the trendline is one that points diagonally downwards – barely £3 billion in 2021/22 had become less than £2 million by 2022/23.
It’s catastrophic for a sport without huge commercial pull – particularly as the bookmakers continue to do well. Indeed, despite the number of bets being placed declining, many of the leading firms’ profits continue to grow as a result of them increasing their margins on the major race meetings. Some firms went with a 130% book for the Cheltenham Gold Cup in March; a staggering deceit for one of the most popular betting heats on UK soil.
So the biggest losers are punters and the sport of horse racing as a whole – neither of which will delight racing’s key stakeholders. It’s thought that media rights deals are negotiated with betting turnover as one of the key metrics, which may lead to a cut in the price of TV and streaming contracts in the future.
As such, this may ultimately mean that the gap between British and Irish racing continues to grow – a point made by Arena Racing Company chief Martin Cruddace. “Our industry needs clarification and certainty as to our key income line or the funding gap with jurisdictions such as France and Ireland will simply grow and, I fear, exponentially so,” he said.
In the Ring
It was back in 2023 that ministers were warned that the rollout of affordability checks could cost racing some £50 million a year.
So has that online betting turnover disappeared off to the black market, or has at least some of it been moved to the on course betting ring?
A number of proprietors have spoken positively about an uptick in their fortunes in recent times – with some alluding to 20% increases in bets taken at the Cheltenham Festival in 2023.
Although the number of punters in the crosshairs of affordability checks is a relatively small part of the wider betting community, they would still account for a significant amount of money – particularly those who bet for a living, or who are connected to horse racing yards personally.
Indeed, Seamus Mulvaney laid an £11,000 bet on State Man at the Cheltenham Festival in March from an on-course punter – and watched on in horror as the Irish horse ground out victory in the Champion Hurdle.
There’s no affordability checks in the betting ring – bookmakers simply wouldn’t have time, and the fact that more and more of them have invested in tap-and-pay and chip-and-pin technology, in an age when cash is no longer king, also stands them in good stead.
But it wasn’t all rosy at Cheltenham, with one prominent on-course bookmaker – Martin Davies – reporting a downturn in bets placed of around 15%, which falls in line with the lower attendance at the Festival than has been the case in recent years.
Will racing’s main decision-makers be able to come up with a solution? If recent history is anything to go by, don’t bet on it.
