There are two sayings that very often lead you to the crux of the matter: “Follow the Money” and “Actions speak louder than words”. This month has led GBGC to believe that the rate of decline in the horseracing product is set to steepen further. On 1 July 2010 Stan James decided to end its sponsorship of the 1,000 and 2,000 Guineas. Presumably the firm’ marketing department have evaluated the strength of the Guineas “brand” and have decided the money can be spent better elsewhere. The Guineas are two of the five classic races in Great Britain. Next up, growing Irish bookmaker Boylesports decided not to renew their £315,000 sponsorship programme with Cheltenham’ International meeting. 

• Bookmaking sponsorship down 
• Bookmaking margins on HR down 
• Levy down 
• Turf TV will steepen decline 
• Racecourses to close 
• Levy and media costs now exceed bookmakers’ EBITDA on horseracing 

Perhaps even more telling is the departure of class act David Hood from William Hill. Hood was the director of racing and public relations and was in attendance at practically every major horse race meeting.
Hood, reflecting on his change of circumstances in the Racing Post, said “Part of the reason for my departure was a realisation that the bookmaking business was changing. I love racing and betting, but the non-racing element is taking increasing precedence”. 
“It’s a sign of the times, the resources that can be spent on promoting racing are increasingly limited – and racing has to come to terms with this and the pressure it is under.” 
This all coincides with Neil Wilkins leaving Victor Chandler and Mark Davies leaving Betfair. Victor Chandler stated “I don’t feel I need a full-time UK PR manager”.
As we have said before the horse racing industry has wasted money, not allocated resource where it will deliver the best return and has not committed funds to reserves.
Now we have the recession. This one is called the Great Recession and it is causing business to really think about the way it operates and is creating efficiencies previously not considered. A recession exposes faulty business models and those who have not been prudent during the boom are being tested.
We are now in a period where the niceties of life have to be placed on one side. We are beyond politics now; it is the time when all sides have to be unfailingly realistic. 
The Horserace Betting Levy is probably the only surviving subsidy in the UK. It has survived because of racing’ great skill with PR which is directed toward maintaining and improving the levy at all cost. You cannot argue against this policy. It has served the horseracing business very well for 50 years. In the same position you would do the same.
The problem is that racing many years ago started to believe its own PR that the product was infallible and that everyone would pay regardless of price.
So Turf TV came about as much as a payback to the bookmakers for setting up SIS. Few realise today that SIS was indeed a breakthrough in technological achievement, it was the world’ first satellite TV channel and it was owned and built by bookmakers.
However in spite of being gifted 10% of SIS equity at birth, the racing industry soon began to kid itself that it was being swindled.
Turf TV will be recorded as a colossal failure in years to come. It has destabilised an industry to the extent that the betting industry no longer has the resources to help racing out of a fix of its own making. 
The benefactors of Turf TV, the racecourses, receive in media rights £16 million yet the bookmakers are paying out in excess of £40 million for the service. Bookmakers are paying in excess of £200m to have pictures in their betting shops. The total cost of levy and TV media now exceeds bookmakers’ EBITDA on British horseracing.
It reminds us of a time when the late George Best returned to the Hyatt Hotel in Birmingham after a prolific win at the casino. The concierge helped him get undressed; the bed was covered in money and an ex Miss World was laying on the bed waiting for George who was drunk.
The concierge asked “George what went wrong?” While others would have envied George the concierge was able to see the man was sick.
The racing product is now in decline and the product unaffordable. If the rumblings we hear from clients are correct, few bookmakers are likely to renew their Turf TV contracts.
Horseracing the world over is in decline. Most of us came into gambling because of horseracing. It is sad to see where it used to be as a betting product to where it is today. 
At GBGC we keep the global statistics and they are not a pretty sight. For example, California’ on-course betting handle has fallen from US$ 981 million in 1995/1996 to US$ 590 million in 2008/2009 – a decline of 40% in little over a decade. In Japan, betting turnover on horseracing is down 15% in the six years between 2003 and 2009. In 2009 turnover fell below the JPY 3,000 billion mark.
Even in countries where horseracing is granted monopoly betting status it is in decline. 

 It is inevitable that some racecourses will have to close. Wye racecourse was the last to close in 1975. None have closed since, with the exception of the short lived Great Leighs, which barely opened. Thirty one racecourses have closed since 1913. Gatwick racecourse is now an airport. Bromford Bridge, Birmingham is now a huge housing estate.
Fewer racecourses could be beneficial to the racing industry and more jobs and revenues generated if former racecourse sites were given planning permission for change of use. 
Would, for example, Cartmel or Carlisle racecourses be more beneficial to those communities if they became a business park instead of a racecourse that races a few days in every year?
What of the shareholders who own those racecourses? They would be substantially better off. This is why whenever a racecourse comes up for sale investors want to buy.
What is the future for the levy? The levy was created by politicians and it has survived because of them.
GBGC’ prediction is that government need not make a decision on its future. It will ultimately wind itself down. However it would be better for government to control its decline and avoid unnecessary dislocation.
As for the ‘horsemen’. Like any investment there is a time to buy and a time to sell.