There are potentially few more important industries in the United Kingdom than the horse racing sector. Not only does the industry bring back millions in terms of tax, but it is also a major source of employment for millions across England, Scotland, Wales, and Northern Ireland.
The sport is enjoyed by millions across the UK, and it ranks only second to football in terms of average attendance figures. But, how profitable is the horse racing industry in the United Kingdom, and what is the economic impact of the sport in the wider picture?
How Big is Horse Racing?
For those that aren’t passionate fans of horse racing, it may be hard to judge how prominent the sport is in the UK landscape. However, racing is the second-most popular sport in the country, with only football out-ranking racing in terms of attendances and revenue.
This can be reflected by the fact that the British Horse Racing Authority generates around £4.1 billion annually. The sector also gives back to local communities, as over 100,000 people are employed within the sport. This is vitally important sector, especially in rural areas where there are few other job opportunities.
The betting levy is also important when assessing how the sport works, as racecourses rely on this to generate funding for prize purses for races. The levy brings in around £100 million per year, ensuring that the sport has never been in a healthier place when it comes to competition on track.
How Does it Compare to the Rest of the World?
The United Kingdom is by far the biggest horse racing industry in the world, due in large part to the popularity of the sport throughout the season. Unlike other nations, the UK racing schedule is split in half, with jumps being the more popular action across the winter months. The summer months are made up by flat action, which centres around huge events such as the Epsom Derby, Royal Ascot, and the Guineas.
The USA has a huge racing market in its own regard, but the popularity peaks in the months of May and June due to the Triple Crown races being run in a six-week window. These are the most profitable in the industry, with millions wagered on the Kentucky Derby on the first Saturday in May. The prize money for this race is $3.1 million.
Next there is the Preakness Stakes, whose prize money is $2 million. You can find more information about this upcoming race at twinspires.com.
The Breeders’ Cup is also a hugely popular event held at the end of the season. Unlike in the UK, races being worth millions of dollars aren’t a rarity throughout the campaign in North America.
Australia’s horse racing industry is one of the most developed in the world, and it is also regarded as one of the most profitable. The crown jewel in Australian racing comes in the form of the Melbourne Cup, which is the richest turf handicap on the international schedule. Taking into account gambling and breeding, the Australian racing industry is worth billions to the economy.
Owning a Racehorse
One of the main dreams for many with a passion for horse racing is to one day own a star that is capable of competing on the biggest stages. However, for many, this is nothing more than a pipedream. Due to the money on offer in the biggest races, horses that are capable of competing at the highest level cost millions. Even those looking for a side business will need to put aside a healthy amount to even get to the table.
On average, the cost of owning a racehorse can cost between £30,000 and £70,000, depending on the frequency that a runner is on track. That doesn’t event take into account the price that will need to be put aside in order to buy a runner.
Some of the most talented horses can sell as yearlings for well over £1 million. Therefore, syndicates and part-ownerships have been prominent among fans of the sport in recent years, as smaller costs can be put aside in order to live the dream.
Challenges That Face The Sector
Horse racing is in a very strong position economically in the United Kingdom, but there are also big threats that could upset the status quo. Among those include the contentious issue surrounding prize money, with many British trainers believing that bigger purses should be on offer to ensure that talented horses aren’t sent overseas to pick up prizes.
A major issue facing the issue also comes in the form of the proposed affordability checks, which poses a severe danger to the betting industry. The Racing Post found that half of the UK’s bettors would be betting significantly less should these checks be imposed, and that could see a staggering £250 million loss for the sector. As a result, this would jeopardise jobs and leave the sport vulnerable for years to come, with many racecourses worried about their long-term future.
