By Robbie Butler

I had the pleasure of lecturing the Thoroughbred Horseracing Industries MBA class at the University of Liverpool this week. We discussed funding horse racing in Ireland and the possible consequences of Brexit. The group came from a variety of industry stakeholders throughout these islands. 

At a general level, horse racing in Ireland is in relatively good health. According to Horse Racing Ireland (HRI), Irish bloodstock sold at public auction was to the value of €161.5m last year. While racecourse attendances continued to decline in 2018, large racing festivals are starting to attract record attendances again in recovery-Ireland. Prize-money also grew by 3.9% to €63.5m in 2018. it should be noted, more than 60% of this is sourced from budgetary support. 

While this annual report is largely positive, Brexit cases a shadow over the (very near) future. The eight "No" votes last night in the UK Parliament means a hard Brexit in early April remains a possibility.

30 years of progress within Irish racing could be undone over night. Chief concerns are centred on the Irish bloodstock industry, animal welfare and the tripartite agreement between Ireland, Britain and France. It remains to be seen how this will be affected in the weeks ahead and it should come as a concern that Aintree 2019 might be the last as we currently know it. 

While Irish racing successes in Britain have probably never been as obvious, the next two weeks will dictate if this could continue into the future, or come to a crashing halt. 

By Robbie Butler

On the 1st of January 2019 Irish racing was shown for the first time on the newly launched Racing TV (formerly Racing UK). The move ended more than a decade of coverage by Attheraces (now Sky Sports Racing) and effectively placed Irish racing behind a paywall for the first time. 

I should be clear, Attheraces was not free to all Irish television users, but came as part of Sky's "Entertainment" pack – 90 channels that formed part of Sky TV's basic package. Other sports channels in this offering include Eurosport, Sports News and Sky Sports Mix. Up to the end of 2018, Attheraces had provided 100% coverage of all Irish racing. Not a single meeting nor race, at any of the 26 tracks on this island, failed to be covered live.

Some cited their concern, when it was announced last year Irish racing would move to Racing TV until at least 2023, and argued that the packed UK schedule might see Irish racing slide down the list of priorities. A recent piece in the Irish Examiner supports this view and cites a Saturday card at Gowran Park where races were short of lead-in time and lacked information of betting markets. Spilt screens were used during broadcasts, and some races were only joined midway through. The most damning of all was the failure to show any coverage of the last race at Gowran.

In the weeks leading up to it's launch, Racing TV advertised a price of €31 to Irish customers. If my memory is correct, the price was subsequently dropped to €12 for a promotional period, and can currently be purchased for €15 per month for one year. 

Aside from the fact that €31 is more expensive than my Sky Sports subscription, which provides access to many sports, and Irish racing does not get the same coverage as it has done previously, I fear there is a bigger problem for those selling the product. 

Pay-walled sport works because it is the only way to access coverage. Sky Sports has been a spectacular success since its launch in 1992 because it was the only way to watch live Premier League action until 2007. Since then it has been joined by others such as ESPN, BT Sport and soon Amazon; all also subscription channels.

28 days of Irish racing will be shown this year on free-to-air RTÉ. These include the biggest days on the Irish racing calendar and events such as the Irish Grand National and Irish Derby (which must be shown free-to-air),  Punchestown Festival, Galway Festival, Leopardstown and most recently Thyestes Day from Gowran.

Think of this comparison. If BBC or ITV had the right to show the 28 biggest Premier League games each season, how many people would subscribe to Sky Sport or BT Sport? The 28 would include Liverpool vs Man Utd, the North London Derby, the Manchester and Liverpool Derbies, Chelsea vs Arsenal all home and away, and a smattering of other games.

The business model works because this is not the case. Free-to-air customers have to waiting until 10.30pm on Saturday evenings to watch Match of the Day. While some would continue to pay subscription sports channels, I suspect the number of subscribers would collapse dramatically if free-to-air providers could cherry-pick the best games, as happens with Irish racing. 

From the perspective of the Irish racing consumer, long may the cherry-picking continue. 

By Robbie Butler

In the last year or so, I have encountered a number of research papers that focus on the economics of horse racing. This culminated in (what I believe was) the first ever horse racing session at the European Sports Economics Conference at the University of Liverpool last August.

Work in the area is now developing and members of this blog, as well as colleagues in the UK at the University of Lancaster and University of Liverpool are exploring the economics of horse racing. There is really so much to explore (e.g. labour markets, betting tax, efficient markets, government support of the industry, and the impact of Brexit).

Some focus has recently turned to UK’s pending exit from the European Union and the impact on the industry, but this has been limited. The scale of a hard Brexit, which is now becoming more likely by each passing day, has the potential to decimate the industry. Remember, this is an industry that only survives in Ireland thanks to generous Exchequer support each year. More than half of all public monies are then used as prize money at Irish racecourses. 
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I have explored the issue on prize money on a number of occasions in the past. While the biggest prize funds on offer are on the other side of the Irish Sea (see here and here) the average level of prize money across all tracks remains higher in Ireland. This is particularly obvious at lower grade racing and has encouraged English horses to travel to Ireland (see here and here).

The difference in funding may be set to grow further. Last week Arena Racing Company which owns and operates 16 racecourses in Great Britain, announced that it would be reducing prize-money by £3 million as a direct response to the British government's recent decision on Fixed Odds Betting Terminal (FOBT) stakes. Leading trainer Mark Johnston’s response to this decision was:

“The prize-money is quite ridiculous and the whole situation of Arc cutting prize-money in anticipation of a potential cut in the number of betting shops and funding due to the FOBT reduction, which is hypothetical at the moment, is out of order. It gets to a point where it’s just not viable to take a horse all the way to Lingfield for that sort of money”. 

Others have responded in a similar fashion to ARC's decision. This resulted in a reduced card at Lingfield on Saturday, and one race on the card not attracting a single entry! The solution to the problem may be reduced cards in the short run, but in the long run trainers may need to look elsewhere. Independently owned Chelmsford City Racecourse is being used as an exemplar to demonstrate the type of money that should be put on offer, at lower grade races, to attract entries. 

Of course, another solution is for more horses to travel from the UK to Ireland to compete. Generally, horses and labour flow one way and not the other. A glance at prize money on offer last Friday night at Dundalk (Ireland) and Lingfield (England) demonstrates the difference. 

Dundalk's 8 race card had an average prize fund of €8,543.75 per race. Lingfield's 6 race card reports a figure of just €3,839.75. 

The total amount of money on offer at the Irish race course was €68,350, which is some €45,000 more than the €23,039 on offer at the English track. 

​All things equal, this should incentivise trainers in the UK to send more horses across the Irish Sea to race at venues such as Dundalk.

However, the extent to which this may now happen will largely not be decided to prize money on offer at Irish courses, nor reduced stakes at FOBTs in the UK, but rather events in Westminster over the coming weeks.

By Robbie Butler

Nearly two years ago RTE's Conor McMorrow wrote a piece entitled "Unease in Irish racing industry over Brexit hurdle". The story ended with Irish trainer Dermot Weld saying:

                 "When we had the original old border, there was always the danger when you brought horses to the North                        that they could be held up for a while. That's a long time ago. We don't need that again. We need free                            borders." Those comments sum up the views of an entire industry, if not an entire country".

Last night, following a Commons defeat on the Withdrawal Agreement, the United Kingdom government is no closer to securing a deal with the European Union once the country leave the trading bloc on the 29th of March this year.

To say this is a problem for the horse racing industry, indeed almost every business on the island of Ireland, would be an understatement. As of today, the use of World Trade Organisation (WTO) rules or a hard BREXIT, seems to be the most likely outcome, something that would not have been expected in June 2016.

This week, well-known Irish trainer Ted Walsh added to the debate and said on BREXIT that:
              "We rely on them (the UK). They have been good neighbours but we rely on them for most of our exports, a                   lot of imports and a lot of jobs for people".

There is probably not a sport on this island that is as connected as horse racing when it comes to the relationship between Ireland and the UK. As Walsh says, Ireland exports a large volume of product to the UK. The breeding industry is largely dependent upon UK customers. The reverse is also true; buyers in the UK depend on Ireland to breed horses. Ireland also exports labour to the UK in the form of jockeys, trainers, stable staff, etc. 

The relationship is further underlined by Horse Racing Ireland's (HRI) governance of both Down Royal and Down Patrick, two races courses located in Northern Ireland that are managed and partially funded by the Irish semi-state HRI.

And on a practical level consider this. The 2019 Cheltenham Festival starts on the 12th of March this year. One of the great aspects of the event in the past decade or so has been the English vs Irish dynamic to the races. The crowd is also littered with sports tourists from this island and the term "Irish invasion" is often used to describe the volume of Irish that attend the Cotswolds. People and horses will travel freely again this year.

Less than 4 weeks later, the Grand National Festival will start. Last year the first 4 horses in the race were Irish trained. Will this be the case this year in a post-EU Britain? Hardly if things keep going they way they are. 

Cheltenham will be the same this year. Aintree might not be. Everyone will lose if this is the case. 

By Robbie Butler,

Following on from our successful workshop last week on sports betting, it is rather appropriate that we re-start our blog with the traditional Galway Races exercise that puts the Fama's Efficient Market Hypothesis (EMH) to the test.

Last year we branched out and followed two leading trainers. A profit of more than 31% was reported for Willie Mullins, but Dermot Weld followers would have incurred a loss. As this is our 6th attempt, and with last years draw, the scorelines stands at 1.5 - 3.5, in favour of the bookies. Not deterred, we go again this evening, and for the next six days. 

The rules are as follows. A hypothetical stake of €2 (to win) will be wagered on on all Weld and Mullins trained runners shorter than 4/1, and €1 each way on all those 4/1 or greater. Guaranteed prices are assumed. The trainers will be evaluated separately. 

Updates during the week will follow.

2018 is not a year to forget quickly. An excellent return is reported. In total, 156 horses were wagered on. Mullins saddled 112 and Weld 44.

​Following both trainers resulted in a profit of €56.32 for a €2 stake per horse. That's a 36.1% return. Things were even better for Mullins alone, with a reported profit of €71.52 for a €2 stake. This is a massive 63.9% return! 

By Robbie Butler

There are presently 86 racing courses operating in the United Kingdom (UK) and Ireland, or British Isles to use the geographic terminology. The breakdown by country is England (52), Ireland (24), Scotland (5), Wales (3) and Northern Ireland (2). Racing at these locations is an all year round occurrence, with only Christmas Day and Christmas Eve in the UK certain to have no fixtures each year.

The regularity of the sport ensures a constant stream of live content for sports broadcasters. Traditionally available on free-to-air television and within bookmaker betting shops, the market for live content changed in the early 2000s with the arrival of subscription channels. Much like the market for Premier League football a number of broadcasters now exist and “compete” with one another.

As Hoehn and Lancefield (2003) identify, completion occurs in a two-stage game; the first stage involves competing for rights to the race courses, if rights are non-exclusive or face close substitutes, broadcasters compete in respect of the quality of their coverage and analysis. The second is competition in the downstream market for consumers.

In the UK, there are two main racecourse owners. Arc Racing Company and Jockey Club. Between the two they control almost half of all British race courses. The remainder are owned independently.

Ireland is somewhat different. Horse Race Ireland (HRI), a government financed government body, manages the sport on an all-island basis with the two tracks in Northern Ireland directed from Co. Kildare. While ownership of the courses is largely private, direction, fixtures and the vast majority of funding comes from HRI.

Racing is available on free-to-air channels in the UK and Ireland on a weekly basis. That said,  the number of races shown is limited and coverage is normally restricted to a Saturday. Remaining races can be viewed on a subscription basis by purchasing one of two channels; Attheraces (to be rebranded Sky Sports Racing from on or before January 1st, 2019) and Racing UK.
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As on May 2018 Attheraces has the rights to all 15 Arena Racing Company, Hereford Racecourse (run by the local council), a number of independent tracks and all 26 race course on the island of Ireland. Racing UK holds the rights all 14 Jockey Club tracks, two run by Chester Race Company and numerous independent course.

Things are set to change however as it was recently announced the Racing UK had won the rights to show all racing from Ireland from 2019 onwards. While Sky Sports Racing recently announced an agreement to take over broadcasting of live races from Chester Race Company’s course in Bangor-on-Dee and Chester, the loss of 26 courses will be seen as a major blow. The graphic above demonstrates the change in market power from 2018 to 2019 for both channels.
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Attheraces coverage of Irish racing has been excellent over the past decade or more. It will be interesting to see how the move to Racing UK (which may now require rebranding) works out.

By Robbie Butler

This week we had the privilege of addressing the University of Liverpool's MBA in horse racing class on Merseyside. We had a good conversation about many racing issues, particularly the tendency for Irish horses to travel to the UK in large volumes but a much smaller flow of traffic the other ways across the Irish sea.

In many respects this is unusual given the prize money on offer in Ireland. I have previously addressed this here and here. With Punchestown's Festival in full flow this week it is notable that there are far fewer English horses running in Ireland than Irish trained horses as the English equivalent - The Cheltenham Festival. Prize money however might answer this.

Four years ago I addressed this issue, and while prize money in Ireland tends to be better on average than the UK, the same cannot be said when comparing Punchestown to Cheltenham. Below I compare the various races, which match up quite well across both festivals, and the corresponding prize money. Just one, the Champion Bumper, has larger prize money in Ireland than the UK. 

Cheltenham continues to dominate in terms of the money on offer and therefore it is no wonder the flow of horses tends to be from these shores to the Cotswolds rather than the other way around. 

By David Butler

To my knowledge a new record was set at Southwell Racecourse last Friday when just 13 paying customers arrived at the track. The bitter cold and schedule reorganisation were offered as reasons for the surely record breaking turnout.  

The data on attendance at UK meetings from 1989 to 2015 shows that prior to Southwell last Friday, the previous lowest attendance was at Wolverhampton in December 2012. This meeting was held three days before Christmas – 111 showed up and only 5 bookmakers were present on course.

From 1989 to 2015, 952 UK meetings have attracted below 500 punters. The data shows that 644 (67%) of these were held at Wolverhampton racetrack. Southwell held the second highest percentage of meetings with under 500 attendees - 123 meetings (19%). Along with Lingfield, these meetings at these tracks appear to be designed for bookmakers shops and off-course bettors rather than racegoers. It is also the case that the vast majority of races run at these tracks are on an all-weather surface. Wolverhampton Racecourse only hosts all-weather events on its recently installed Tapeta surface.

The weather, and perhaps the Christmas season, appear to be important regulators for meetings in this <500 club too. The chart below shows the data by month for the 952 meetings. Typically, these events fall into months with adverse weather conditions. While not denying the importance of race quality and facilitates,, this might be something authorities need to consider more when organising the racing calendar to help smaller racetracks improve attendances. That is of course, if the motivation is to attract greater attendances.

By Robbie Butler

A number of weeks ago the Irish Labour Court rejected an appeal by Ballydoyle Racing Stables, which attempted to prevent changes to the categorisation of its employees. The stable's failure in the Labour Court could have a significant impact on horse racing in this country.

For those unfamiliar with the case here is a brief summary.

Employees of the horse racing industry in Ireland have historically been deemed to be “agricultural workers”. According to 2010 Employee Regulation Order covering this sector, an agricultural worker is defined as:

       “a person employed under a contract of service or apprenticeship whose work under the contract is or includes              work in agriculture, but does not mean a person whose work under such contract is mainly domestic service”.

Importantly, this means that such workers can be asked to engage in:

​      “a wide variety of activities, which are weather dependant, seasonal, unpredictable and often require 7 day week         flexible working arrangements”.

In 2015, the Irish Workplace Relations Commission (WRC) changed legislation covering the horse racing industry so that employees were no longer classified as “agricultural workers”. This has had serious consequences for the number of hours and days employees could be asked to work without a break.

On a routine inspect of Ballydoyle stables, the home of many world famous Aidan O’Brien trained horses in May 2016, the WRC found the employers to be in breach of the law. Ballydoyle’s failure to overturn the ruling in the Labour Court has left the industry at a crossroads. A further appeal to the High Court is possible, and if successful, could result in a return to the status quo.

It is worth pointing out that the definition of “Agriculture” under the 2010 Order is as follows:

““Agriculture” means horticulture, the production of any consumable produce, which is grown for sale or for consumption or other use, dairy farming, poultry farming, the use of land as grazing, meadow or pasture land or orchard or osier land or woodland, or for market gardens, private gardens, nursery grounds or sports grounds, the caring for or the rearing or training of animals and any other incidental activities connected with agriculture”.

It is also worth pointing out, that Irish Government support for the horse racing industry has, since 2011, been provided by the Department of Agriculture. 

By Robbie Butler

In recent days, English trainer Nicky Henderson has come in for criticism for his alleged delay in informing the public of the setback that star chaser Altior had in preparation for the upcoming Tingle Creek Chase at Sandown.

This central issue, and the main source of this criticism, concerns the integrity of the ante-post betting market. For those unfamiliar with horse racing, ante-post markets allow one to bet on a race in the weeks and months prior. Larger prices are offer but these are offset by the greater level of risk. If a horse fails to run, money is not returned. This is not the same as betting on the day of a race, where punters are refunded for non-runners.

The issue of non-runners appears to becoming a matter of debate with some questioning the timing of these. The Turf Club in Ireland produce some excellent data, available online, which sheds light on non-runners in Ireland. The most recent publication covers the 2012-2016 period.

The number of non-runners in Ireland has decreased over the past five years. 2,126 non-runners were reported in 2012 compared to just 1,863 in 2016. This is slightly up on the previous year when 1,607 horses failed to run after being declared.

Some of the drop can be put down a decline in the number of horses in training. However, given a total number of runners over the past 5 years, the percentage of non-runners is relatively stable between 6% and 7%. Ireland it seems does not have a major issue on this front.

The reason for declaring a non-runner is also provided. Almost 40% are down to ground conditions. Lameness is the next more common reason for withdrawal with between 9.8% and 17.4% of horses not running for this reason. Coughing and stone bruises account for around 10% each respectively. The remaining 30% are down to variety of other reasons such as a temperature, being off-feed or injured.

The full document and data can be found here.