Civil war between bookies and racecourses places vulnerable sport on the edge

Major betting entity Flutter is entangled in a media rights dispute with top racecourse management group Arena Racing Company (ARC), creating a scenario that many in the racing community should regard with significant concern.

As the parent company of Sky Bet and Paddy Power, two of the most prominent names in UK betting, Flutter has recently declined to offer odds on three ARC racecourses (Bath, Chepstow, and Lingfield), arguing that the low-quality racing does not justify the streaming fees they are being charged. Bookmakers are lamenting the decline in quality, lower turnout, and inadequate prize money, branding British racing as ‘unprofitable’ for bets.

If it weren’t for legal intervention by ARC chief Martin Cruddace—who has a solid legal background thanks to his time at Betfair—these meetings would likely have gone uncovered. Flutter chose to set the race odds just before they started, relying solely on the starting price. An increasing number of bookmakers are voicing dissatisfaction regarding the cost of streaming racing and its poor return on investment.

Inevitably, these concerns have implications for consumers, particularly the bettors. Flutter must discover ways to ensure profitability, and without any flexibility regarding a racing media rights contract that extends to 2027 with ARC, average bettors should be aware that they might face less favorable odds and terms increasingly often. Value is already scarce in ante-post markets, while benefits like Best Odds Guaranteed and extra places are phasing out.

There is no question that the golden era of online racing betting is nearing a tumultuous conclusion. Bookmakers are beginning to question how racecourses are utilizing funds from their media rights agreements, as it does not seem to be invested in prize money or enhancements to the overall quality of racing.

In a scathing midweek article in the Racing Post, Flutter’s CEO Ian Brown remarked: ‘Our data indicates that dwindling prize money results in smaller field sizes, rendering the product less appealing for customers. This leads to diminished betting revenues, which in turn reduces funding for the sport. It creates a distressing cycle.’

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This disagreement is only the surface of a much larger issue. Racing has consistently marginalized the betting sector, despite its crucial role in funding the sport. The survival of horse racing hinges on investments from owners and bettors alike. It’s easy to label this as just the tale of the big, greedy bookmakers crying foul again. However, both racing and betting need each other, and the betting industry has far surpassed the evolution of racing over the past two decades.

Football remains a lucrative market for bookmakers, with options like Bet Builders and the varied schedule of domestic football providing innumerable betting opportunities across different matches and levels—it’s a gold mine. Political instability during election years in the UK and USA typically attracts a lot of betting interest, and other sports like golf and darts are experiencing upward trends in betting activity.

Sport is not the only area where racing faces competition. Anyone accessing an online sportsbook is also subject to casino alternatives. A significant flaw in government gambling policies has been their failure to differentiate between casino and sports betting, an oversight that large bookmakers have capitalized on throughout the 21st century to secure substantial profits. With gambling reforms tightening, racing could face severe repercussions if a one-size-fits-all approach to online gambling is implemented.

As Britain’s betting boom begins to wane, the USA is embracing its opportunities. Flutter, for example, has relocated its operations to New York. The ongoing dialogue between Flutter and ARC may signal the beginning of a pivotal transformation in racing.

Bookmakers also run extensive commercial ventures. They excel in self-promotion, often overshadowing individual sports. How many companies sponsor your preferred sports section in the paper? How many fund your favorite sports podcasts? How many support the country’s major sporting events? They make significant financial contributions to these sectors and, whether appreciated or not, wield considerable influence.

Flutter has alternative strategies when racing does not. This ongoing debate between Flutter and ARC could escalate into a broader conflict between racecourses and bookmakers. Racing circles should be apprehensive, as this struggle has the potential to get messy, with bookmakers holding more leverage than previously.

PERFORMANCE OF THE WEEK… GOLIATH silenced many critics by decisively winning the King George and Queen Elizabeth Stakes. The French contender, initially priced at 25-1, thrived under a moderate pace that suited this hold-up runner, expertly launched by Christophe Soumillon. The reasons for Auguste Rodin’s disappointing performance remain unclear—be it the ground conditions or overly ambitious tactics employed by the front-running horses.

SELECTION OF THE DAY… FLIGHT PLAN (5-1, bet365) found the fiercely contested Queen Anne Stakes too challenging during the Royal Ascot but is set for a more favorable drop back to Listed level at Pontefract today (3.12), which aligns perfectly with the expectations of in-form trainer Karl Burke. Last year, he came second to Poker Face in the Pomfret Stakes, but today he aims to secure a win.