Horse racing has a £1.4 billion black hole according to industry experts

On the latest episode of the Racing Post’s The Front Page show, host Tom Kerr was joined by Bill Barber and Jonathan Harding to discuss the latest figures from the British Horse Racing Authority (BHA) that reported a £130 million decline in online betting turnover.

Betting turnover on horse racing has been declining since 2022 and if the trend continues, until the end of 2024 British horse racing will be facing a £1.4 billion deficit.

Barber says that a “major cause” is the Gambling Commission’s proposed affordability checks on horse racing punters.

Pilot schemes are currently running for the checks that will require operators to implement spending thresholds for customers who will then be required to provide evidence they can afford to wager above the set limits.

Barber also suggests that some of horse racing’s biggest bettors have turned to black market operators in response to the affordability checks which has further lowered turnover. 

A result of reduced turnover is a reduction in the value of media rights deals for racecourses and events that rely on money from media deals.

Harding said: “I think those racecourses that rely quite heavily on media rights will have to tighten their purse strings a little bit in the future as a logical knock-on effect. I’m also thinking if racing comes to a point where it is no longer attractive to bookmakers they might potentially look at investing in other products that have a better return for them.”

To help boost the British horse racing scene the BHA launched Premier Racing for the 2024 season which features 170 race days that offer advanced prize money across some of the racing’s biggest contests throughout the year..

Harding says that at the time of the announcement he thought the move was “perfectly logical” however he has been disappointed with its implementation.

“It just has been half-committed to,” explained Harding. “They’ve done enough and they’ve got the KPIs and it’s all very logical but it just felt like the softest of soft launches. How can you expect something to succeed if you’re not going to be 100% behind it.”

In the second part of the show, the discussion turns to tomorrow’s (4 July) general election. The latest polls suggest that Labour will win with a large majority and the trio take a look at how this result will impact the horse racing industry.

Harding said: “Racing has relied on some friendly ears in parliament, it has direct links to some MPs. So there’s a whole host of MPs who have put racing’s case forward in a fairly direct way that perhaps other sports haven’t enjoyed.

“[Racing] almost needs to find some new friends in the new government. That’s why it’s significant because it begs the question of the writing has been on the wall for a while of Labour coming and what have you done to forge links there create that dialogue with the incoming party.”

Barber also provided some facts on the potential swing of MPs that will be representing the 58 constituencies with racecourses in them.

Currently, 38 out of the 58 constituencies are represented by Conservative MPs and he estimates this will flip with between 25-29 being led by Labour MPs after the election with gains as well for the Liberal Democrats.

Coming back to the debate over the affordability checks, Barber predicts that Labour will allow the process of implementing the checks to go through as the party has been “broadly supportive” of measures proposed in the Gambling Commission’s white paper.

To end the episode the panel did a round-up of the other latest news in racing including the story that Betfred is the new sponsor of the Newmarket’s 2,000 and 1,000 Guineas from 2025. This means that the firm is now the title sponsor of all five British Classics, which alongside the Guineas are the Derby, the Oaks and the St Leger.

Betfred also revealed that it will be offering a £2 million bonus to any horse that wins the Triple Crown of the 2000 Guineas, the Derby and the St Leger.

On the announcement, Barber said: “Betfred being the first sponsor to sponsor all five classics is pretty noteworthy.

“I suppose there will be people who think the fact that a bookmaker is sponsoring all five classics is worrying that the sport can’t reach outside but it might be a reflection that the captains of industry in Britain are no longer racing fans or can’t get it past their boards to do these sort of sponsorships.”

Industry experts warn of £1.4bn ‘black hole’ in horse racing