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British horse racing needs ‘collaborative approach’ to overcome decline in media and betting revenues

• Betting shop closures likely to result in drop in media-rights revenues
• Bookmakers sharing betting data to develop more compelling fixture list
• Conservatism of the sport has tended to stymie media innovation

Senior stakeholders from British horse racing have said the industry will have to take a more collaborative approach if it is to cope with the likely decline in media and betting revenues associated with the closure of multiple retail bookmakers.

The closures have been precipitated by legislation introduced in the UK in April limiting the maximum stakes on fixed-odds betting terminals (FOBTs) in betting shops. Bookmaker William Hill announced plans in July to close 700 licensed betting offices, blaming a fall in FOBT revenues.

Horse racing has historically earned healthy media revenues selling bet-to-view media rights to individual high street bookmakers based on the number of stores they run. The average betting shop pays around £30,000 (€33,000/$38,000) per annum for the rights to broadcast a range of live sports, meaning widespread closures will lead to significant losses in media income for racing. The closures are also likely to impact betting revenues which are channelled back into the sport through the Horserace Betting Levy, a statutory 10-per-cent levy on betting operator profits.

Speaking at this week’s Betting on Sport conference in London, Will Lambe, executive director of the British Horseracing Authority, said the sport was ‘at a crossroads’ and that stakeholders like the racecourse owners and betting operators needed to work together on a single strategy to plug the anticipated shortfall in income.

“We need a common understanding, we need one version of the truth as to the different income streams and outputs in our sport which for quite a few years now has been provided piecemeal,” he said.

Lambe said the BHA had commissioned Portas Consulting to carry out an independent analysis of the financial and economic state of British racing. The research would help to identify how the number and timing of races on British Racing’s fixture list impacts on the commercial success of the sport. Lambe said the stakeholders had already agreed to adopt a ‘less is more’ approach, organising 30 fewer races in 2020 compared with 2019 while the study continued.

“We at the BHA believed it was a time to just put the brakes on,” he said. “There’s been a reduction in fixtures for next year, while we as a sport take a proper look as [this] big economic project which kicks off with everybody involved,” he said.

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Bookmakers first

Ben Keith, founder and owner of bookmaker StarSports Bet, said smaller racecourses should be under no illusions that they ought to prioritise bookmaker needs and the racing levy over the need to develop ticketing revenues.

“On a Tuesday meeting, we’re not expecting, or trying really, to get thousands and thousands of people there,” he said. “I know the purists don’t want to hear it, and they might consider what I’m saying ignorant, but as a bookmaker, I need content, I need evening races at Kempton.”

Tom Byrne, operations manager for the Horserace Betting Levy Board, the body that channels the racing levy back into the sport, said it was taking an equally collaborative approach with bookmakers to identify the best way to encourage more betting on the sport. Byrne explained how five bookmakers (BetFred, Ladbrokes, Coral, Paddy Power, Betfair, SkyBet and William Hill) were now sharing data about their retail and digital turnover with the organisation to develop a more coherent betting strategy. The partnership has already resulted in the sport trialling more lunchtime races because the data indicated these were more likely to attract greater betting spend.

“It might be that the correct number of [annual] fixtures is 1,000 or 2000; it might be that we should have four races in a race card, or 12 races in a race card. It doesn’t matter. What matters is the way you’ve come to that decision and that you can base that decision on evidence,” said Byrne.

Byrne described British horse racing as a ‘good product’ rather than an ‘excellent product’ and argued that races needed to attract more internationally-trained horses to attract foreign visitors to UK racecourses and build the value of the global media rights.

Innovation before tradition

All of the speakers agreed that the Race Course Media Groups’ four-year media deal with ITV had benefitted the sport, even though the channel’s coverage was not always to the taste of racing purists. Although the broadcaster’s decision to employ reality TV star Chris Hughes as a presenter was not well-received by traditionalists, it had succeeded in attracting younger audiences to the sport. Lambe admitted that the complicated web of stakeholders and the conservatism of the sport was not always helpful in delivering a media-friendly product, although he felt it had made progress in this respect.

“We are behind other sports, for a number of reasons, not least how fragmented we are. In terms of that fan engagement, there are frustrations at times, absolutely, on enforcement and cooperation with the media, but I think we’re on an upward trend there,” he said.

Lambe said greater transparency in how media and betting revenues were allocated to horsemen and women would encourage them to take a greater interest in fan engagement initiatives.

Bookmaker Ben Keith called on the BHA to take a more autocratic approach to overcome all of the vested interests and intransigence, even though Lambe said this was not a role the organisation wished to adopt.

“You said that you don’t want to have a dictatorship at the BHA? Well, I’d say dictatorship worked well for Bernie Ecclestone and Barry Hearne and it worked very well for their sports. And I think that people should learn to get behind you.”

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