Existing structures have all attempted to address these fundamental drivers at some point. However, the world has changed and many protagonists have forgotten the once practical underlying purpose of now arcane procedures. Considering each key driver in turn:
Fixture volumes are largely optimised from a ‘big picture’ perspective: improving on an average of c. 28 races per day practically every day of the year can only be tactical or operational in nature. While optimisation is very important, GB horseracing is fulfilling its strategic Common Interest requirements spectacularly well. Equally, the need to ensure weather redundancy (especially in the critical jumps season), maximise the use of regional horse populations, provide the three major codes (jumps, flat turf, All Weather), and give individual turf courses a rest, means that talk of racecourse ‘rationalisation’ often misses vital elements of infrastructure provision. Moreover, a nil direct contribution to this infrastructure and sub 20% indirect commercial support should only be seen as exceptional Common Interest value for bookmakers: the vast majority of races are run when they are run to suit a ‘bookmaking pattern’, not a racing one.
Base levels of competitiveness are another story, however. A stabilisation (indeed slight growth) in field sizes to approaching 9 per race is only 0.93 of a horse above the 8-runner field which gives each way terms interesting to the mass-market customer, while too many races (c. 15%) go off with a practically pointless from a betting perspective 5 or fewer runners. More critical to competitiveness than field size (though linked) is the price of the favourite: adding no-hopers to bulk up races will add no value. Nearly 15% of races go off with odds-on favourites and this is also bad for bookmaking outside a few ‘superstar’ horses which do more for profile than they cost in short-odds winnings. As well as providing betting ‘slots’ racing must also provide a betting ‘pay-table’ with broad appeal (ie, the framework of betting opportunities from short odds ‘near certainties’ to long-odds ‘punts’, the ability to create attractive multiples, etc: the greater the number of runners and competitiveness, the better the pay-table for the mass market; small fields and odds-on favourites appeal almost exclusively to a small group of more ‘professional’ bettors and exchange users). Racing is providing the slots effectively but the pay-table is patchy at best, with clear and increasingly structural points of failure.
The racing calendar is peppered with glamourous and/or nostalgic events, many of which guarantee sell-out crowds. However, anecdotal evidence suggests that only the Cheltenham Festival has been a standout success in recruiting new customers and driving volume growth. However, ‘Cheltenham’ is only one event and (poor for recycling into more racing) occurs toward the end of the jumps season. The Derby has tried some mass-market innovation to appeal to a wider audience, as well as maximise sponsorship value; the Grand National has gone for ‘teatime’, and; the All-Weather Championships combine a league with a quality finale (on a relatively new raceday – Good Friday); these are positive innovations, but they are too few and too tactical in nature to confidently predict that the declining hopper of dedicated race bettors is being refilled by new generations of engaged customers. Critically, betting has had relatively little to do with trying to address this engagement issue, despite it being a fairly obvious and long-term critical Common Interest.
Writing that GB racing is well regulated and strong on integrity the week after a ‘misidentified’ horse romped home might raise eyebrows, but racing’s track record is creditable in this field. Transparency has also increased dramatically in the recent past, as has a willingness to learn and change. This is not yet universal, but the regulation and integrity of the sport works. The key question here is whether or not such key Common Interest symbiosis should not be better reflected in a division of costs and representation.
Accessibility is another area of issue. Racecourse attendance has typically been strong within leisure-cyclical and amenity-driven bounds, often boosted by an increasingly rich programme of non-racing events. However, on-course Tote is a relatively sclerotic product while on-course bookmakers are practically museum-pieces. Wifi is increasingly available, but this is the limit of innovative accessibility from a betting perspective. Certainly, bookmakers do not help themselves here either, by typically offering Byzantine lexicons and user journeys; not putting off the seasoned punter is of course crucial, but this is too often an excuse to accept an ‘inevitable decline’ in relative engagement comfortably slow enough to keep the lights on while growth is sought elsewhere. This tactic (accidental or deliberate) might work when double digit growth is easy to come by (be it FOBTs, SSBTs, in-play or slots), but it is very dangerous in a more difficult growth environment – especially given the still significant size of horseracing as a betting product (c. 42% of retail; c. 30% of remote and by far the biggest pre-match market). The ability to stabilise and grow the appeal of betting on racing (or otherwise) is therefore likely to be a key driver of UK bookmaker performance into the medium term, for both landbased and online.
Common Interest III – what should be done
The biggest structural failures of Common Interest are currently competitiveness and mass-market appeal / accessibility. Usefully these two drivers are linked, and fixing the second is pretty pointless without fixing the first. Equally importantly, these failures will not be fixed by tweaking the status quo or by either racing or bookmaking alone (let alone at loggerheads). Historically, bookmakers have demanded more races and got them. This has increased the number of fixtures on a declining (GB) horse population of relatively static efficiency – the result, fairly predictably, was fewer runners per race. This trend has been relatively impervious to significant increases in Prize Money: