How Important Is Horse Racing to the Economy?

Horse racing is something that is ingrained in British history and it has been a favourite sport of the country for a long time. Every year, events like the Grand National attract big names. Even royalty have attended the races to experience the thrill that it provides. Everyone knows that the late Queen and her mother used to keep horses.

Those stallions and mares would run in various events throughout the year. It was even customary for members of The Royal Family to place a bet or two. Some of them have even competed in equestrian events before, too. Princess Anne’s daughter, Zara Phillips, won a silver medal at the 2012 Olympics in eventing.

Horse racing is commonplace in the UK but does it have a big impact on the country’s economy? Is it of significant importance in this area? Well, many would suggest that it is, considering that it helps to generate about £200 million in bets each year. Of course, there are those campaigning against horse racing events, too. Animal Rising recently invaded the racecourse at the Grand National in 2023. Their reason for doing so was to draw attention to a plight. They say that we shouldn’t be exploiting horses for our entertainment and for sport.

If horse racing events stopped up and down the UK, would it have a big impact on the economy? That’s part of what we aim to look at today. We want to know more about it as well, though. Of course, horse racing provides employment to people, adds to the Treasury in taxes, and so on. Exactly how important is it to the country?

Challenges Faced Highlight Its Contributions

There is little doubt that horse racing is not what it used to be. In fact, during COVID-19 lockdowns and since the pandemic, it has faced many challenges. The average attendance at events has fallen, for a start. Also, in comparison with international competitions, the UK prize money level is lower. In November of 2022, the UK Parliament highlighted financial support for the industry. In particular, it made note of the horseracing betting levy.

It was at that time that Lord Risby intended to speak to the government on how they would support the industry. While doing so, he would submit evidence of how helpful the horse racing scene is to the UK economy.

In 2020, the British Horseracing Authority (BHA) explained figures on the size of the industry. In written evidence to the House of Commons DCMS Committee, it said:

“British racing is the UK’s second largest sport behind football in respect of attendances, employment and revenues generated annually. In 2019, 5.62 million people attended over 1,500 individual race meetings held across England, Scotland and Wales…”

The text then went on to note the economic impact that this has on the UK. It said:

“This translates into a significant economic benefit for the UK, with our industry generating £4.1 billion in direct, indirect and associated expenditure annually for the British economy. Much of this is focused in rural areas with over 20,000 people directly employed across our 59 licensed racecourses, hundreds of training yards and thousands of breeding operations – all of which play a key role in the life of the many hundreds of rural communities they operate in.”

Yet the impact of COVID-19 caused financial loss for the industry. This included lost revenue for racecourses, trainers, breeders and jockeys. It pinpointed a figure of £100 million in losses, while suggesting future impacts of the pandemic, too. The reduced prize money is one such problem stemming from that. While the pandemic took the blame for this in part, it’s not completely responsible. The issues of falling attendance and lower prize money have been brought up before.

Economic Impact Clear for a Single County in the UK

In November of 2020, Go Racing In Yorkshire commissioned a major study. This looked at the economic impact of horseracing in the county of Yorkshire. The Centre for Regional and Economic Research conducted the study. This took place via Sheffield Hallam University, with funding from the Racing Foundation.

By utilising data from 2019 (pre-COVID), the team made a discovery. This suggested that the horseracing industry in Yorkshire contributes £300.2 million to the economy there. That, it said, occurred through racing and non-raceday events.

According to the research, racegoers spent £34.1 million off-course. That went on transport, food, beverages and hotels. At the same time, people attending the racecourses for non-racing events spent £15.3 million. Often, these venues will hold conferences and similar events for people to attend. Whenever this happened in the county of Yorkshire, it benefitted the economy there.

At the same time, the industry supports over 3,600 full-time jobs. More than 3/4 of those jobs are in rural areas. The county also trained 2,400 horses, representing 17% of all British trained horses. Yorkshire is also home to 15% of all Britain’s trainers.

An initial study of the economic impact of horseracing in the county occurred in 2010. That study utilised 2009 data, so Go Racing In Yorkshire felt it important to update the findings.

Nine racecourses exist within Yorkshire, and they stage some of the most important races. Two major training centres exist in Middleham and Malton. There is also a huge sales venue in Doncaster, and the National Racing College is there.

“The study was commissioned before the COVID-19 pandemic struck”, said John Sexton, Chairman of Go Racing In Yorkshire. “This timely piece of research reinforces how vital horseracing is to the Yorkshire and rural economy, plus the social and community aspect of the industry. Early assessments show that COVID-19 could reduce the impact of racing on the Yorkshire economy by 72% at a cost of £114.8 million, underlining the sooner we can get back to normality the better”.

Of course, those exist as figures that are specific within the county of Yorkshire. Yet it’s clear to see how vast the industry is from such. If those are the figures for Yorkshire, then it will likely have an economic benefit everywhere.

Racing’s Economic Impact Isn’t New

The figures reported on already are from recent studies. Yet the economic impact that horse racing has on the UK isn’t new. Back in 2006, a study confirmed racing as the second biggest sport to the country after football. That related to both attendance and revenue. The industry reportedly generated expenditure of £2.865 billion in 2005. That helped to cement its position as a large economic contributor.

Despite the recent issues surrounding attendance and so on, the expenditure has increased. Today, it generates around £3.7 billion in total. At the same time, it provides roughly £1.1 billion in taxes, while more than 17,000 people remain employed in the field.

Those tax levels have increased in a significant way since the 2004/05 period, too. Back then, horse racing contributed a total of £282 million in taxes. Four of the top eight attended sporting events back in 2005 were race meetings in the UK.

Once the COVID-19 pandemic hit, the British Racing Industry Group created a plan. This 3-part schedule came about in the form of Response, Resumption and Recovery. That was set up to secure British horseracing and the industry in general. Not only that, but as a consequence, the economic contributions would also stay safe. Of course, at the start of the pandemic, the economic impact for any sport was difficult to work out. Horseracing has a complex industry landscape as well and there is a selection of interdependencies between stakeholder groups and it was difficult for pre-analysis to take place.

Yet the written evidence submitted to Parliament in 2020 brought detailed information to light. It said that British racecourses had lost £8.2 million per month since lockdowns began. The equine industry in general suffered as a result of COVID-19 restrictions. That was, of course, the case for many businesses throughout lockdowns. One instance saw Bransby Horses lose £300,000 while the country’s first lockdown was in effect. The equine charity suffered the severe revenue losses when closing in March under government orders. Before that, the Bransby site suffered extreme floods in November of 2019. This saw it lose £200,000 in revenue. This was due to various horses moving out of the area and events suffering cancellations.

Of course, this has a link to the equine industry, and contributes to the economy in its own way. While it would be wrong to say that there were no issues before COVID-19, it has highlighted various problems. Many people don’t realise how much horseracing in the UK contributes to the economy. The pandemic managed to bring more attention to this. It also managed to place a focus on how much betting on such events contributes in the same way.

Other Factors Hitting the Horse Racing Industry

The pandemic is one issue that has caused concern within the industry. Yet there are various other things to consider as well. Many weren’t sure how Brexit would affect British horse racing. Yet in June of 2021, the industry suffered a hit by rules surrounding exports. The UK’s exit from the European Union (EU) brought about certain new export rules. This led to the number of horses racing in the EU dropping in a dramatic way since 2020. Smaller operators within the industry suffered in a big way, according to BBC Politics East.

Brexit has, in general, also affected many industries. While things are better than what they were in the initial stages, they remain difficult for some sectors. The increase in administration to export horses to the EU meant a decline in such taking place. The government aimed to tackle the red tape surrounding such to assist the industry.

Then came the issues surrounding the UK gambling reform white paper. This threatened to target gamblers in the country who placed bets on horse races. A lot of the funding that the horse racing industry receives comes from betting. As highlighted earlier on, it helps to generate around £20 million in sports bets every year.

The government published the gambling white paper on April 27, 2023. This came about following a series of delays throughout 2021 and 2022. Not long after it saw the light of day, many looked to the horse racing industry. The chief executive of the BHA, Julie Harrington, gave her thoughts on it. In specific, she was asked whether the proposed legislation considered a big difference. That between betting on racing and other sports in comparison to on games.

“There is some good language in there, accepting that there is a difference between sport and evidence of faster losses on those casino-based games”, she said.

Yet what she failed to speak of was the affordability checks for gamblers. In this area, the language did not differentiate between gamers and bettors. That makes it a significant threat to the funding racing receives from betting. In turn, it becomes a threat to the contributions horse racing makes to the economy. The thresholds of when a gambler will have to prove they can afford to bet is no different. Initial checks will come when someone suffers a net loss of £125 over one month. That implies the same to someone who loses on the horses or someone who loses on a slot machine.

Where some suggest there should be a difference is the nature and pattern of the losses. Some race bettors only gamble on major meetings like Cheltenham or Aintree. Others only bet on football or a sport with a lower profile. Even those more professional gamblers will likely hit a losing streak at some point down the line. Yet they will still suffer an affordability check because of this. Casino gamers tend to lose funds in a much quicker way on the slots and table games.

Some have estimated a potential loss to racing of between £8 million and £14 million. That is all down to the potential introduction of affordability checks. Of course, those figures could be an underestimate, too. The loss to racing could be a lot higher. A few campaigners have also already called for the tightening of trigger checks, too.

This stands as something else that the horse racing industry may have to weather. Of course, losses to the horse racing scene likely mean economic losses as well. The government isn’t one to suffer significant losses in a light way. It doesn’t like haemorrhaging money – unless it is in control of that!