With many sports, there is little question they would continue to exist without any gambling activity. If you take football, for instance, people genuinely enjoy playing the sport, watching the game, and also have their favourite teams, players and so on. As such, there will always be a good demand for it. Horse racing is rather an outlier in this respect because although it has a popular following, a big part of this is solely to do with the gambling element.
If there was a ban on horse racing bets overnight, attendances at racecourses would plummet, as would TV audiences. Part of what attracts so many to the sport is the thrill that comes with staking money on the action. People generally do not have individual figures they passionately support race-in race-out like they would in other sports. Instead, they simply cheer for whichever horse they have money on.
Punters may feel an affinity to certain jockeys, trainers and horses, which can grow quite strong over the years, but this is nothing like the passion fans of sports, like football or rugby, feel. Of course, there are some people that just enjoy the sight of racing, without needing to put money on, but this represents a small proportion of racing fans.
Without betting there would be a huge drop in viewers across the sport, for both the big and small races. Could racing continue in such circumstances? The safe assumption is no it would not, certainly not in any way resembling its current form. The racing industry is so reliant on betting money that removing this entirely would likely see the operation collapse very quickly.
How Would Racing Lose Money with No Betting?
Because so many people watch horse racing in order to put on a bet, removing gambling from the sport would trigger a financially devastating domino effect. Here are the various revenue streams that would disappear entirely or be significantly reduced.
Racecourse Income
Without the ability to place bets on the action happening in front of them, the majority of race-going punters would find something else to do with their time. Few would have an interest in watching horses compete with no money on the line. This would lead to a huge drop in ticket sales. Currently annual attendances across Britain stand at just under five million but it would end up being a tiny fraction of this without gambling.
Not only would racecourses suffer from the reduction in gate receipts but there are additional financial blows they would take. As there is no betting, there would be no on-course bookmakers who usually pay a fee for their place on the concourse. There would also be a huge drop in revenue for food/drink outlets due to the reduction in spectators. Under the circumstances, it is hard to see how any racecourse would be able to remain financially viable.
Sponsorship & Media Income
Horse racing has long been a target for bookmakers to spend some of their advertising money. Whether it is sponsoring a particular race, an entire meeting or a visible presence inside a racecourse, there are numerous ways for bookmakers to prop up the sport.
Although racing sponsorship can be costly at the highest levels, bookmakers believe it is a worthy investment due to the number of spectators and in particular the demographics of them. If there was suddenly a huge drop in viewers, in response to a betting ban, bookies would suddenly have no real interest in having a presence in the sport. There would be little point in sticking around even on a cut-rate deal as those still watching the sport would generally be people with little to no interest in betting.
According to the Betting and Gaming Council, horse racing receives around £350m annually through sponsorship, media rights and betting levy payments. With levy payments (discussed later) worth £82m during the same period, this means sponsorship and media rights are worth well over £250m annually.
You also must remember that businesses other than bookmakers pay good money for sponsorship deals within racing. The Grand National, for example, has been sponsored by Randox since 2017, while the Epsom Derby Festival was previously sponsored by Cazoo. There are many other examples to provide, and in all cases these deals could not exist in their current form if there was a huge decline in interest. Companies pay good money to sponsor races because it increases visibility of their brand. If they are not getting this within racing then they will move their attention to other means of marketing and promotion.
Betting Levy
In a typical year, the racing industry can expect to enjoy close to £100m through the Horserace Betting Levy, which is collected by the Horserace Betting Levy Board. The levy rate is 10% of gains on leviable bets above the £500,000 threshold. In the 2021-22 financial year, this totalled £98m. The bulk of this money is used for providing prize money for races, although there are a range of other areas it helps funds.
As the horse racing levy is only collected on gross earnings from British horseracing, without betting this money would disappear entirely. This would have a severe impact on prize funds available for races. Being a racehorse owner is often not a lucrative pursuit at the best of times and a huge cut in the value of prize pools would turn it from a challenge to a virtually impossible endeavour. Nobody would want to get involved in a sport that is only paying paltry fees for winning races. Horses are expensive to maintain and without sufficient prizes, it would not be sustainable.
As well as seeing owners leave the sport, you would certainly have trainers doing the same. Trainers cannot just reduce their costs because owners are getting less money. Running a yard would not be lucrative with far fewer horses and nobody willing to pay the current going rates. This means waving goodbye to all the big names, some of which may decide to move abroad if gambling remained part of the sport elsewhere.
What About the United Arab Emirates?
We have painted a picture that British racing, which is already struggling a little now, would be decimated by a betting ban. It would quickly go from a mainstream sport watched by millions, to a niche interest, lacking any sort of television coverage, that very few people watch in the flesh. Some of you may be thinking our assessment is a little over-the-top though, given that the sport is seemingly thriving in the United Arab Emirates, a place where betting is illegal.
Meydan Racecourse in Dubai is home to several of the world’s top races, many of which pay out some extremely large prizes. The total prize fund for the 2023 Dubai World Cup weekend for instance was a massive $30.5m, of which $12m went to the Group 1 Dubai World Cup. This is a much bigger amount than any individual race in Britain, and this is without any gambling being permitted within the country.
The big difference here is that the country is happy to chuck money at the sport even if it results in a loss. It is believed Meydan racecourse cost a whopping $1.25bn when it was built in 2010 and various aspects of the sport are subsidized to attract the best horses to the region. Whether it is covering the cost of return travel for both horses and staff, or free stable access, little expense is spared in recruiting the best around.
This is not particularly unusual for the region as there are numerous other examples of neighbouring countries running sporting competitions at a loss. Whether it is the ludicrously expensive Qatar 2022 World Cup, or Saudi Arabia’s LIV Golf League with its extremely generous prize funds, the motive here is not making a yield. What having a world-famous racecourse with many top names does achieve though is getting wealthy and influential people to visit, as well as giving the nation some positive press.
In most other countries though, horse racing, like any other sport, needs to be largely self-sustaining. In the case of British horse racing, this is only possible thanks to the revenue directly tied to betting.
A Balancing Act
With (non-Middle Eastern) horse racing so dependent on the money provided by betting and bookmakers, governments must tread carefully when taking a tougher stance on gambling. In an interview with the Racing Post, Betting and Gaming Council chief executive Michael Dugher said there was a “clear and present danger” to British Racing if the government got their upcoming gambling proposals wrong.
On the one hand, the government is under pressure to reduce problem gambling and associated harms. On the other though, they do not wish to damage an industry that is responsible for 119,000 jobs and £3.2bn in tax to the Exchequer (£7.7bn in gross value to the economy).
It is an awkward spot to be in because tightening the rules on bookmakers will risk harming horse racing, and much more so than it would for any other sport. Only time will tell how the British government responds following their review of the Gambling Act 2005 and what this impact will have on the horse racing industry.