Autumn: the ‘season of mists and mellow fruitfulness’ capable of inspiring classical poets from Keats and Shelly to Robert Browning and Robert Louis Stevenson.
A season more recognisable by the day as morning chills hover for longer than expected, leaves change colour before your eyes and Ray Winstone’s gravelly, pre-match command to “get yer mobiles out” establishes itself once more as a regular feature of midweek Champions League football.
We’ve had 16 such fixtures over the past two days and seen Ray nodding with a contented air as he confirms that the recently-calculated odds displayed on your screen during half-time are “tasty”.
But ‘Carlos Kickaball to score next: 7/1’ is not just an additional opportunity for Mr Winstone to look and sound like a poorly-attired cockney gangster. Millions of viewers watching this week’s European contests consider it an invitation to have a flutter before the second half kicks off.
There’s nothing wrong with this at all. For centuries, sport has provided a platform for people to enhance their enjoyment of a well-balanced duel by having a bet on the outcome.
However, while punters are presented with a staggering variety of markets upon which to stake a few quid, such an array of regular options is sucking stake money away from one sport and thereby making bookies’ margins on football considerably more attractive than say, those offered by horse racing. The longer-term commercial implications for the latter could be significant as income from bookmakers accounts for a sizeable proportion of the racing industry’s turnover. More wagers were placed on racing outcomes than on any other sport. They still are – and by some distance – but live television coverage of football, spread over two or three hours, coupled with the availability of high-speed internet access, offers bookies the chance to dramatically broaden their spread of betting opportunities.
The almost inevitable consequence of this shift in betting habits is a thinly-veiled warning to racecourse owners, breeders and trainers that betting on horse racing is nearing the point where bookies are beginning to question its commercial viability.
“Demographics play a huge part in this shift,” says Chris Hutcheon, of Betrescue.com, one of the UK’s leading odds comparison companies. “Younger people, those with iPhones, iPads, tablets and the like, are much more inclined to have a bet on a football match than on a horse race.
“Moreover, as the number of markets offered by bookmakers on a regular Saturday Premier League fixture will invariably exceed 150, there’s a constant flow of outcomes upon which they can wager.”
When Ladbrokes revealed its most recent interim accounts, the company’s chief executive, Richard Glynn, fired an early shot across the racing industry’s bows.
“If turnover trends do not improve and if the current cost structures are maintained for horse betting in particular,” he said, “it may rapidly reach the point where it becomes unsustainable as a product.”
Figures issued by the Gambling Commission do little to contradict Mr Glynn’s view that betting margins on horse racing are becoming thinner.
In the five years between 2008-2013, reported turnover on ‘off-course’ horse race betting fell by more than £120 million a year, although it’s worth noting that despite an aggregate fall of 10.5 per cent, turnover still exceeds £5 billion annually. Over the same period, the total value of horse race betting stakes less winnings, known in the industry as ‘gross gambling yield’, fell even more dramatically – by 17 per cent, from £843 million to £697 million. Yet while bookies are concerned by the apparent shift of punters away from racing, the value of football betting remains modest by comparison.
During the same five-year period, football betting turnover increased by more than 20 per cent, to £1.2 billion, though this is still four times smaller than horse racing, while football’s gross gambling yield in 2013 was £293 million, more than £400 million less than horse racing. Despite this differential, football betting continues its dramatic growth while betting on horse racing heads in the opposite direction.
Like any other business sector, bookmakers, particularly those like Ladbrokes and William Hill listed on the stock market, are constantly mindful of maintaining their margins. Shareholders demand it. It’s no surprise, then, when the industry points out that, over the past decade, as margins on horse race betting and gross punter numbers have fallen, their collective costs have doubled, thanks to the statutory horse racing betting levy applied to all ‘off-course’ bets and the cost of media rights, which, they say, rose by a fifth between 2008-13 alone.
It’s easy to dismiss these figures as the consequence of one vested interest (bookmakers) undertaking some early, don’t-tax-us-any-more, pre-general election lobbying. That is until we examine the horse racing industry’s finances and discover that bookies account for approximately 20 per cent of racing’s gross income.
If one major bookmaker decided it wasn’t worth taking any more bets on horse racing, it could be a disaster for the racing industry as several others might be tempted to follow suit.
In the medium term, however, this appears extremely unlikely as bookies perfect their ‘cross-pollination’ strategies, incentivising punters who place bets on racing to have a flutter on football and vice-versa.
The racing industry is far from out on its feet. According to the British Horseracing Authority, the numbers attending race meetings continues to rise. Last year, 5.6 million people attended almost 1,400 UK meetings and there are signs that younger folk are returning to the ‘sport of kings’. The Jockey Club report that more than half (52 per cent) of attendees are aged between 16 and 34.
Nevertheless, bookies, preparing to be hit with a 15 per cent online betting tax from December, are, according to Ladbrokes, already paying close to 70 per cent of profits in taxation, while duty on gaming machines is scheduled to rise in 2015.
Conversely, the racing industry maintains that annual income raised from the betting levy has fallen by almost £30 million since it reached a peak of £110 million six years ago.
The irony is that racing and bookmakers need each other. There’s no easy answer to increasing the volume of betting on horse racing without bookies squeezing their margins still further, even though more people are enjoying the sport ‘live’.
Given this quandary, we can expect bookmakers to close more of their high street shops, furiously cross-sell their online football and racing products, ensuring that one, at least, will surely extend Ray Winstone’s contract.
