British on-course bookies and small breeders face extinction as they struggle to make a profit in an increasingly competitive industry
Standing alone outside -handwritten odds in a piece of paper at hand-, Kevin Bridges stared at the horizon, trying to catch a glimpse of the race track while working at Chelmsford City Racecourse. The 69-year-old retired bookmaker would not see any horses unless he entered the premises and stared at one of the many screens inside.
The tracks at Chelmsford are good but the rest of the place lacks “comfort”, said Bridges who came all the way from Cambridge to help a fellow bookie during a hectic race day. His description of the racecourse reflects his perception of how much the horse racing industry has changed since he started working as a bookie half a century ago, when the first international regulating body was created.
Bridges is one of the 40 on-course bookmakers in the UK that have surrendered their licenses in the past four years as a result of reduced profits. While global horse betting continues to increase its contribution to the British economy reaching an estimated £3.5bn in 2017, local businesses have failed to benefit from such growth.
Online betting takes over the market
“Everything changed with online gambling,” said Bridges. He decided to retire after his profit margins got reduced. “It didn’t just take over my clients but it also pushed the Government to raise taxes and license fees”.
Since he retired in 2015, remote gambling has continued increasing its market share controlling over 37% of betting in 2017, according to data published by the Gambling Commission.
“I really enjoy not worrying about profits anymore,” said Bridges. The bookmaker that occasionally hires him takes care of all operating costs such as gambling licenses -which can exceed £1.300 every year-, screens and computer maintenance for the betting stand, and more basic needs like transport and accommodation. “You depend on how many people show up to the race, and these days it’s more about the restaurant and the DJs. Weekdays can be challenging”.
Traditional bookies like Bridges seem to be an endangered species. The number of licenced on-course betting operators has decreased by 7% to 528 since 2014, says the latest data published by the Gambling Commission.
Chelmsford City Racecourse was the first track to be built in the UK in 81 years, which means it is the first one meant to adapt to the globalized industry from scratch. The owner is Fred Done, founder of Betfred, which became the dominating betting website in the British landscape after buying Totepool, the body that managed state-controlled bets.
Done has described the project as a “racino” -a casino for horse racing-. The concept describes well the atmosphere at the venue, which grandstand offers no direct view of the tracks while most amenities are indoors.
“There is so much satellite TV that the racecourse is not so reliant on people to go to the race to make money,” said David Dunford, a Chelmsford-based historian who wrote the book Full Circle: The Rise, Fall and Rise of Horse Racing in Chelmsford comparing the past and present of horse racing in Chelmsford.
A hundred years ago, “horse races were bringing business to the area; pubs, restaurants and hotels thrived whenever one of those events took place two or three times a year,” said Dunford. The two racecourses that existed in the Chelmsford area attracted enthusiasts from all over the country.
“They could have put the new racecourse anywhere else,” he said, “you don’t see many tourists coming to Chelmsford to enjoy the races”. Chelmsford City Racecourse is located almost nine miles away from the city that inspired its name and there is no public transport to access it.
The broadcasting business
“It is not meant to be a touristic attraction,” said Bridges when asked about the limited access to the racecourse, “the location serves them fine because it is close to Newmarket, which is perfect for trainers and owners. The business is based on hosting high-profile races and selling the broadcasting rights”.
“Internet betting firms telecast live racing from other countries,” said the US-based horse racing consultant William Shanklin. The globalized industry provides 24-hour broadcasting for bettors. “European races begin the day in the early morning, then the USA races come on mid-day and continue through the evening, and Asian and Australian races are carried late at night”.
The breeding business
Shanklin said the main benefit of globalization has been an increased level of sophistication in thoroughbred horses breeding. Global regulations allowed horses to be transported across borders, a crucial aspect of breeding since “thoroughbred registries do not allow for artificial insemination”.
“This is where the dollars are generated,” said Shanklin, “some prominent stallions stand in the Northern Hemisphere in the breeding season and then are shuttled to a Southern Hemisphere location where the breeding season is the opposite.”
Such a competitive industry makes it difficult for small and medium-sized British breeders to succeed. Many of them “are facing extinction”, says a report by the Thoroughbred Breeders’ Association. In the past 5 years, there has been an 8% decline in the number of breeders in the UK, which accounts for over 350 businesses that have closed their farms for good.
The industry has replaced them with the “leading farms, such as Darley (owned by the Ruler of Dubai) and Coolmore (owned by John Magnier of County Tipperary Ireland)” that own “farms in the multiple locations” across continents and can afford the high costs of high-performance breeding, said Shanklin.
“I don’t see any negative effects of globalization in horse racing, quite the contrary,” said Shanklin, though old-style industry employees may disagree. If the next step in horse racing effectively is artificial intelligence as Shanklin has predicted, his job as a horse racing consultant is as likely to be replaced by computers as Bridges’ job has. Maybe then, Shanklin will feel more empathic about the bookie’s longing for “the good old days”.