An executive overseeing two of the UK’s leading sportsbooks recently urged for a change in British horseracing at a time when profits for the sector have been growing despite a shrinking audience. Earlier this week, Ian Brown, the CEO of Flutter Entertainment’s UK and Ireland division, submitted an op-ed for the Racing Post, highlighting a number of issues affecting horseracing in the country currently.
The recent announcement comes at a time when Sky Bet and Paddy Power, two leading betting brands from Flutter, discontinued their offering of early prices for meetings at Chepstow and Bath this month.
At the same time, the brands’ parent company tried to change its existing deal with Arena Racing Company (Arc) to include better conditions regarding the payments for betting and streaming rights. Ultimately, Flutter identified the high cost of such expenses and actively seeks to improve its profitability in this particular segment.
Brown raised similar concerns, revealing that based on company data, the decreasing prize-money resulted in a dip in the number of players. This also helped make horseracing a less appealing product, he explained.
Highlighting the severity of the issue, Brown said that a decreasing field size ultimately results in lower revenues and plummeting proceeds for the sport. He deemed the process “a clear and concerning spiral.”
“Our data shows how declining prize-money leads to declining field sizes, making the product for customers less compelling. This, in turn leads to lower betting revenues, and so less revenue for the sport.“
Ian Brown, CEO at Flutter Entertainment’s UK and Ireland division
Flutter Cannot Afford to Keep Investments in an Unprofitable Product
Earlier this year, Flutter announced the shift to primary listing on the New York Stock Exchange (NYSE). The move came at a time when the leading gaming and betting company seeks to streamline and optimize its operations, growing further its footprint on US soil.
This came as no surprise, considering the prospects of the iGaming expansion across the country and the flourishing sports betting market. Concurrently, Flutter’s focus on the US can also be translated to optimizing operations in other jurisdictions, such as Ireland and the UK.
“We, as Flutter, simply cannot afford to keep investing in horseracing as an unprofitable product with a shrinking audience, where media costs are escalating at significant rates, and the underlying quality of the product is declining.“
added Brown
In that line of thought, Brown said that based on company estimates, the “overall streaming revenue is around three times the prize-money for meetings like Bath and Chepstow – and that’s also before the levy contribution.” He said the company wonders where the remaining money is going.
But more importantly, Brown spoke about the unprofitable horseracing product that has rising media costs, declining quality and a shrinking audience. He said that under the current conditions, Flutter cannot afford to retain its investment in such a product.
The terms of the contract between Flutter and Arc are private. What’s known is that the media rights contract has a deadline in 2027. It is yet to be seen what changes if any Flutter will be able to negotiate and what impact they may have on the horseracing industry.
