ECONOMIC IMPACT STUDY HIGHLIGHTS BRITISH RACING AS WORTH BILLIONS TO BRITISH ECONOMY

29 Sep 2009 Pre-2014 Releases

  • British Racing worth more than £3.7bn to the British economy in 2008
  • Return to racing from betting in Britain up to 8 times lower than other major racing nations

Racing has retained its position as the second biggest sport in Britain after football, including revenue generation and attendance, in a major new Economic Impact Study published today. British Horseracing generated expenditure of £3.4bn in 2008, up from £2.86bn in 2005. Once capital expenditure is added this figure rises to more than £3.7bn.

The study, which is the second of its type produced for British Horseracing by the Sports Business Group at Deloitte, reiterates the value of horseracing to the British economy. The British Horseracing business contributed at least £325m in tax in 2008, taking the five year tax total to over £1.5bn. British Racing has 18,600 full time equivalent jobs within its core industry, a vast number of them within the rural economy.

According to the report, there are an estimated 52,000 full time equivalent jobs in the onshore betting industry which, given the considerable proportion of gross win provided by Racing (to the betting industry) indicates that a significant proportion of these jobs are supported by the sport.

Taking into account secondary expenditure generated by the Racing industry in the economy, over 100,000 full time equivalent jobs were supported, directly or indirectly, by British Horseracing.

Other key findings of the wide-ranging study, which has sections on the sport’s varied participants and customers, as well as comparisons with the leisure market and international competitors, include:

  • Core British Racing industry expenditure of over £1bn, with racecourses generating £361m
  • Owners’ gross expenditure totalled £367m, whilst receiving income of £92m through prizemoney to give a net contribution of £275m
  • The expenditure of the breeding industry was estimated at £207m
  • Capital expenditure over the last five years within the industry of £706m, of which 80% was accounted for by racecourses, and a further estimated £110m by trainers and breeders
  • Bookmakers’ gross win on British Racing in 2008 totalling £1.05bn

In terms of Racing’s standing within the competitive sports market in Britain:

  • Racing once again had four of the top eight attended sporting events in 2008
  • Total attendances of 5.7m last year placed Racing second only to football, with Rugby Union overtaking Greyhound racing to third place, followed by Cricket and Rugby League

The Study also analysed betting turnover and returns to racing of the major racing nations.

Britain was second only to Japan in the total amount bet on racing, with £12.1bn wagered in Britain compared to just under £14bn wagered in Japan. However, the return to racing in Japan was £741m (5.3% of the amount wagered) against just £118m in Britain (1%). Both the USA and France see 8% of money wagered returned to racing (£589m and £531m respectively).

The study is available to be downloaded for free at britishhorseracing.com.

Nic Coward, Chief Executive of the British Horseracing Authority, said: “Deloitte’s study reiterates that British Horseracing, as the second biggest sporting activity in Britain, is a significant contributor to the leisure, agricultural and rural economies in Britain.

“It also highlights the disparity regarding the returns to the sport from betting compared to other major racing nations. If further demonstration of our broken system was needed, we have the second highest betting turnover of the major racing nations yet the lowest return by far from the betting industry to our sport.

“British Racing’s economic impact was over £3.7bn last year and over five years has generated over £1.5bn in tax revenue for Government. Our sport is of enormous value to Britain, and whilst we face challenges, there are opportunities that racing must take which can ensure our standing and importance within Britain can be maintained.”

Alan Switzer, Director in the Sports Business Group at Deloitte, said: “Like all sports, Racing faces a significant challenge as a result of the economic downturn. While sport is certainly not immune from its effects we have seen an encouraging resilience across many sports.

“One impact of this has been a ‘flight to quality’ with consumers increasingly focusing on the country’s, and respective sports, top events. Racing has the advantage that it has a number of such events, with attendances at the top festivals in 2009 generally holding up well. A key challenge for Racing will be to find ways of increasing the profile of the next tier of fixtures.

“Many of the metrics in this report are likely to experience declines in 2009, but we are confident the sport has the ability to bounce back once economic conditions improve.”

For further information please contact BHA Head of Public Affairs Will Lambe on 020 7152 0028 or 07816 914409 or Media Relations Manager Paul Struthers on 020 7152 0166 or 07966 590105.

29th September 2009

Notes for Editors:

The report can be downloaded from:

http://www.britishhorseracing.com/resources/media/publications_and_reports/reports.asp

About the British Horseracing Authority

Launched in 2007, the British Horseracing Authority is the single, unified governing and regulatory body for British Horseracing. Its role is to ensure the continued health and successful development of the sport. It is the Authority’s responsibility to:

  • provide the most compelling and attractive racing in the world
  • be seen as the world leader in raceday regulation
  • ensure the highest standards for the sport and participants, on and away from the racecourse
  • promote the best for the racehorse and
  • represent and promote the sport and the industry.

About the Sports Business Group at Deloitte

Over the last 15 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.

For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup