Worrying times

These are worrying times. Attendances at Irish race meetings last year fell to a new low of 1.23 million, down 11% on 2008, which was in turn down 8% on the 2007 peak of 1.52 million, negating the gradual gains that had been achieved over the previous four years.

Total prize money in 2009 was €53 million, down 14% on the 2008 figure and a return to 2005 levels. Commercial contribution to prize money was down almost 18% to €5.6 million, the number of racehorse owners in the country was down 9%, while the average number of horses in training was down 5%. On the breeding side, the number of foals born in Ireland was down 18% last year, the number of stallions standing here was down 13%, and the total value of bloodstock sold at public auction was down 32%. Tough times.

We are living through chastened days. Downward trends are commonplace, and survival is the primary objective in many walks of life. The slashing of the government’s grant to HRI has had obvious ramifications, most notably for prize money, and you can’t expect individuals or organisations to own racehorses or sponsor horse races if the business that provides them with the means to do so is being curtailed.

We have been here before. When economic times are good – and they were – it is difficult to imagine that they will ever turn bad. The converse is also true, on a rainy day it is easy to think that the sun will never shine again. Yet we know that it does, we know that the economy goes through peaks and troughs, recessions and recoveries, and that we just have to survive the trough, emerge from it intact, so that we can jump on the recovery bandwagon and allow it carry us back upwards. The trick is to survive the trough.

That’s the worry with the on-course betting ring, however: survival is not a given. The degree to which on-course betting has contracted in recent times has been disguised somewhat by the fact that almost every other indicator of the strength of Irish racing is down as well. As you skim over the reports from the big meetings – attendances down, Tote betting turnover down, bookmaker betting turnover down – it is easy to conclude that everything is suffering similarly.

However, the results from the recent Punchestown Festival brought the issue into focus. Attendances for the week held up well at over 93,000, down just 2% on last year. Tote turnover was actually up 24%, primarily due to an initiative which enabled French PMU customers bet directly into the Tote pools, and for which the Tote are to be commended. The amount bet by the French into the pool was just over €800,000, which was only slightly more than the amount by which turnover was up, which means that, even without the French initiative, Tote turnover at this year’s Punchestown Festival would have been almost identical to last year.

By contrast, betting with the bookmakers was down a staggering 18%, from €9.6 million in 2008 to under €7.9 million, and the 2008 figure represented a decrease of 27% on 2007. Justin Carthy of Chronicle Bookmakers said after the meeting that he wouldn’t have been surprised if the decrease had been greater than 18%.

It is a measure of the way that the ring is going, and it isn’t just a blip, it is a significant trend now. Whereas most of the other Irish racing indices fell to around 2005 levels last year, betting in the ring plumbed new depths. Turnover of almost €122 million was down 27% on 2008, down 40% on 2007, and it was actually down 30% on the 2005 figure. It was even 28% lower than 2001 levels in absolute terms.

The betting landscape has changed irrevocably of late. Technology, the advent of the internet, has facilitated the greatest alterations to the betting industry since betting shops were legalised. The fact that you can watch every race live now from the comfort of your own living room means that there is less of an incentive to go racing than there once was. You can bet on-line or on the phone, with a bookmaker or a betting exchange, tax free and at competitive prices, with double result and guaranteed odds all in your favour. Christmas.

It used to be the case that you had to go to the races if you wanted to see anything other than the top races that were covered on terrestrial television. It used to be the case that you could bet tax-free on course while you had to pay for the privilege of having a bet in a betting shop. It also used to be the case that, if you were fast enough on your feet, you could nick 9/2 about a 4/1 shot in the ring. None of those factors hold true any more. The homogeneity in the betting ring is governed by the machines that sit behind the boards, the betting exchanges impacting the on-course market, just as they do the off-course market. Gradually, all of the competitive advantages that used to apply to the betting ring are being eroded.

It is hardly surprising that the number of bookmakers standing in the ring is steadily declining. Many bookmakers are spurning the smaller meetings, some are suffering the cost, which they have to pay anyway whether they attend or not, rather than make the journey and spend the day at the races standing on a box. The volume of business simply doesn’t justify the opportunity cost.

The big meetings are obviously better than the small ones, there are still enough people going to the festivals who like to bet in cash in the ring and get paid in cash when they win, but even the feature days are not immune. More and more, people are going to the races and betting on their mobile phones. Francis Hyland, chairman of the Irish National Bookmakers’ Association, said that there were vacant pitches at the Punchestown Festival this year for the first time ever.

A vibrant betting ring is an integral part of the Irish racing scene. Take away the betting ring – as we saw at Leopardstown during the bookmakers’ strike in 1995 – and you take away a significant element of the tapestry that makes the Irish racing experience what it is. Yet, unless action is taken to reverse the current trend, the future looks decidedly stark.

Survival is the objective.

© The Racing Post, 4th May 2010