New statistics from the UK Gambling Commission suggest that punters are betting less on horse racing and football online.
The data shows that, since 2022, the amount of turnover generated – turnover, in this sense, being how much is wagered each year – has fallen 7% on football and 16.3% on horse racing.
And when another vital sport for the bookies, greyhound racing, is added into the mix, the total loss of turnover since 2022 reaches a whopping 36%.
Counting the Cost
Punters in the UK have been counting the cost of a financial squeeze over the past few years.
Inflation has been out of control, the cost of petrol has fluctuated to new highs and interest rates have also peaked at eye-watering percentages. Factor in the struggles of businesses, which may have put a freeze on pay rises and other perks, and it’s no wonder that our leisure spending has fallen.
The government’s Autumn budget, which saw many small businesses hit with minimum wage increases and National Insurance hikes, could see independent firms within the gambling industry hit harder still.
The battle for bookmakers now will be to plug the gap of what the Racing Post has described as a ‘£3 billion black hole’ for the financing of British horse racing.
At the end of the financial year in March, online betting turnover in horse racing had fallen to £8.3 billion – down from the £10 billion recorded in 2022. But when you factor in the increasing inflation of the past two years, the actual deficit is closer to £3 billion.
Martin Cruddace, the chief executive of the ARC group that manages the interests of 16 different racecourses in the UK, has pinned the blame for the falling profitability on the UK Gambling Commission.
“Bluntly, the Gambling Commission increasingly appears to be unaccountable and out of control,” he said.
“Moreover, they continue to be unable to demonstrate any evidence as to the impact that the current affordability measures are having on problem gambling rates.”
In an open letter, Gambling Commission CEO Andrew Rhodes described those criticisms as ‘unfair’ and based on ‘significant misunderstandings’.
A Question of Affordability
Some stakeholders within the betting sector claim that it’s affordability checks that are hitting turnover the hardest, with big-money punters and ‘whales’ refusing to share their personal data with bookmakers.
The so-called ‘frictionless’ method of conducting affordability checks is currently being trialled by the UK Gambling Commission, although the numbers would suggest that checks carried out directly by bookmakers, which have been implemented over the past year, have impacted the amount of bets being placed.
And so, in turn, they are placing their bets elsewhere – either with on-course bookmakers at the racing, or perhaps even with overseas firms in the black market via an intermediary.
The general consensus is that horse racing has more big bankroll professional punters than any other sport in the UK, while cash-rich owners of racehorses are more inclined place bets when attending a meeting.
Another key difference is that horse racing is part funded by betting revenue as part of the statutory levy system, which sees bookmakers and betting sites contribute a small percentage of their profits back into the fund.
So with the amount being wagered falling, it means bookies are paying less into the betting levy… which in turn means that the sport of horse racing is losing out on a key funding stream of its own.
And the amount being paid into the horse racing levy could be impacted by a new statutory gambling levy, which will again see bookmaker profits squeezed by mandatory payments.
Nick Timothy MP, whose Conservative constituency in West Suffolk incorporates Newmarket Racecourse, has already spoken in the House of Commons on how the current levy system isn’t working.
We need to secure the future of British horse racing, with:
– a higher betting levy
– the levy applied to bets on races overseas
– changes to disproportionate affordability checks, which are hitting the wrong targets and pushing people to the black market.
This is my speech: pic.twitter.com/0JZD39fqwT— Nick Timothy MP (@NJ_Timothy) October 24, 2024
If the flow of funding into horse racing is diminished, it means that the ‘quality’ of the sport – particularly the prize money on offer – also falls, which may see some owners and trainers leave racing altogether.
It’s a vicious cycle from which nobody wins, and it’s vital for the future of horse racing in particular that a solution – be it the scrapping, or the modification, of the affordability checks system – is found… and fast.