BGC: iGaming Operators Anticipate Record Media Rights Investment in Horse Racing
Rising costs are looming in the realm of iGaming operators and horse racing in the United Kingdom. The financial contributions directed toward the media rights of horse racing by prominent iGaming operators are set to observe a significant augmentation. Notably, the entities under the spotlight for these elevated commitments include Entain, Flutter, bet365, 888/William Hill, and Betfred, all members of the Betting and Gaming Council (BGC).
Historically in 2022, BGC members allocated £270.1m for the privilege of live-streaming races, sharing them with customers and showcasing them within betting establishments. This cost is projected to swell to £285.3m in the current year, denoting a 5.6 per cent augmentation. Further, a prospective increase to £315.2m is anticipated in 2024, signaling an additional 10.5 per cent augmentation. Thus, between 2022 and 2024, the combined augmentation for media rights costs is anticipated to be 16.7 per cent. These figures are initially sourced from the BGC’s largest members and then calibrated to include smaller iGaming operators, who also bear the responsibility of media rights costs.
In a previous annual tally, the BGC members directly funnelled £384m into British horse racing via a triad of financial streams: levy, media rights, and sponsorship deals. This notable influx shows a growth trend, compared to preceding years where the contribution from the regulated sector was gauged around £350m per year. Additionally, an amount of £125m was dedicated to marketing, intended to elevate the visibility of racing and betting through advertising and partnerships, which ostensibly bolsters the sport’s terrestrial coverage and provides additional revenue for print media.
Simultaneously, the media rights expenses aren’t the sole financial entity experiencing an uptick. Levy payments, as stated by the Horserace Betting Levy Board, are foreseen to climb to £99m in the fiscal realm of 2022/2023, a rise from £50m in 2016/2017. This record investment has also been utilized to allocate a record prize money pool of £179.3m in 2022. Despite the financial enhancements and horse racing being the UK’s second-largest sport, there is a documented decrement in its popularity over the years.
The Horseracing Levy is on the agenda for review by the Department for Culture, Media, and Sport in the forthcoming year. Administered by the Horserace Betting Levy Board, this levy plays a crucial role in financing improvements in the sport, enriching breeding, and bolstering veterinary care. Concurrently, iGaming operators are orchestrating collaboration with the British Horseracing Authority and racing stakeholders to induce necessary reforms to the fixture list and race program, with an aim to escalate commercial returns from the levy and media rights.
Moreover, the BGC, along with governmental entities, is working on potential reforms derived from a White Paper. The aim is to ascertain a balanced approach whereby betting enthusiasts can continue their engagement without undue interference, whilst also fortifying safeguards for those who experience betting-related struggles.
With betting shops currently facilitating around 42,000 jobs, and contributing £1bn annually in tax to the Treasury and an additional £60m in business rates to local councils, their impact is significant. Broadly, the regulated betting and gaming industry offers £7.1bn to the economy, creates £4.2bn in tax, and underpins 110,000 jobs.
In April, the DCMS presented the Government’s new White Paper on gambling reform, which encompasses several pivotal measures the BGC had campaigned for. These comprise a new obligatory Ombudsman for the regulated sector, augmented spending checks online, and a novel mandatory levy to finance research, education, and treatment aimed at mitigating gambling-related harm and addressing problem gambling.
Michael Dugher, Betting and Gaming Council CEO, said: “BGC members are already making a record contribution to horse racing and these figures show that is only going to increase.
“This comes despite a reduction in betting turnover on racing in the last five years and a worrying decline in participation in horse race betting overall.
“Horse racing remains a hugely important, world-leading sport, enjoyed by millions of fans and like the betting industry it continues to support large numbers of jobs.
“I know racing is trying to modernise and reach out to new fans, while also trying to bounce back from the Covid pandemic and deal with some difficult economic headwinds, plus deal with the hit on its funding caused by the Government. The betting industry is dealing with many of the same pressures on our revenues and costs.
“The BGC and our members remain fully committed to working together with the leadership of the sport, including the BHA and others, to ensure a better future for racing. But the fact that we are making a record and growing contribution to the sport cannot be ignored.”