World-Wide Hurt

by Ed Meyer

posted on January 13, 2009 in News | 1 Comment >>

2008 saw a contraction in the Irish horse racing industry for the first time in over 15 years, as the effects of the economic slowdown coupled with unprecedented bad weather conditions, hit the sector in the second half of the year.

The industry has enjoyed consistent growth across all key measures since the introduction of the Horse and Greyhound Racing Fund in 2001, and is today a significant employer, a vital part of the rural economy and a showcase for Ireland in terms of thoroughbred breeding and elite international sporting achievement.

Participation in the sport in 2008 grew to its highest level ever, with record numbers of fixtures, races, runners and owners. There was also a rise in total prize money, which remains the vital catalyst for economic activity in the industry, by driving investment in bloodstock and providing the commercial incentive to put horses into training.

However, most of the other key performance indicators were down and staff cutbacks and redundancies are now a stark reality for many businesses within the industry. Attendances at the 27 racetracks fell by 9%, from their record level of 1.527m in 2007, to 1.390m last year. More than 50% of the overall drop can be attributed to the significant number of meetings lost due to inclement weather, especially from August-October.

There were 42 cancellations in total, up from 12 the previous year, including important race days at the Tramore, Tralee, Galway (September) and Listowel Festivals, as well as Irish Champion Stakes Day at Leopardstown.

More than 112,000 racegoers attended the equivalent fixtures in 2007, whereas the rescheduled dates in 2008 saw a combined total attendance of just 38,000.

The most dramatic decline during 2008 was in bloodstock sales at public auction, which dropped by 43.6% to €99.5 million, reflecting a breeding industry now under significant pressure.

On-course betting turnover also fell significantly by 18.2%, with bookmakers (down 21.5%) faring worse than the Tote (down 10.1%).

The drop in these measures must be viewed in the context of an industry that has enjoyed significant growth. Between 2000 and 2007, on-course betting rose by 25% and off course betting grew by a massive 208%.

Fixtures increased by 23%, while prize money nearly doubled. Over the period, the number of foals produced grew by 44% and the number of horses in training soared by 52%, creating significant extra employment.

Brian Kavanagh, Chief Executive of Horse Racing Ireland (HRI), said: “While 2008 will be remembered as the first year of contraction in the industry for some time, once again we saw some outstanding performances on the racetrack.”

He noted: “Irish trained horses won a staggering 29 of the 44 Group 1 flat races held in Britain and Ireland, while three of the top five horses in the world in 2008 were bred in Ireland, and two of these were trained here.”

“This level of consistent success showcases our industry at the highest international level. Our challenge now is to protect our enviable record and to focus on building upon the achievements of recent years.”

Referring to the drop-off in attendances, Mr. Kavanagh said: “The combination of lower spending and poor weather, particularly during the second half of the year, saw overall attendances decline from a very successful year in 2007, but encouragingly all of the major Festival meetings held up reasonably well.”

He added that the improvement of racecourse facilities remained a priority for HRI in 2009: “We need to deliver high quality, competitive racing at appealing venues that offer good value for money. Racecourses generate employment and tourism activity, and the industry needs long-term certainty of funding so that we can put in place the borrowings required to undertake the necessary capital investment.”

However, he went on to warn: “With a range of cutbacks already in place for 2009 due to the reduction in our Government funding, owners, trainers, breeders, and all of the 16,500 people who rely on the industry for their employment, will need to brace themselves for the tough times that lie ahead.”

Kavanagh concluded: “With so many demands on Government resources and finances, now is the time for the racing industry to become truly self-financing, as it is in most other countries. This can be done with a meaningful levy on betting, including all off-shore internet and telephone betting which has wrongly escaped the taxation net up to this point.”

“Horse racing is one of the very few fields in which Ireland is recognized as a world leader, due to its indigenous skills base and tradition of enlightened Government policy. HRI welcomed the changes announced in Budget 2009 in this regard and believes that, working with the Government, we can ensure that the mechanism of the Horse and Greyhound Racing Fund can be fully financed by betting duty.”

Indeed, this is now more important than ever given the significant part the industry plays within the economy. It is a major net contributor to the Exchequer and plays a critical role in the rural and agri-economies. As the economic downturn develops, it is vital that the industry has the long-term certainty of funding that will allow it to plan and invest.

“This focus will ensure that Irish racing and breeding maintains its dominant position in one of the world’s most competitive international markets.”

One Response to “World-Wide Hurt”

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