UK horseracing is getting more out of the betting shop than ever thanks to media rights and the horserace levy. But Minister Tracey Crouch MP will at sometime in the future bring in a replacement to the levy. The question arises, what form will it take and how much will be paid by the bookmakers? In my experience nothing is ever replaced where the new cost is less (or even the same). If that were the case, racing would not ask for it.
The number of betting shops is in decline. If new draconian regulations are passed on Fixed Odds Betting Terminals (FOBTs), then the decline will accelerate.
Shops used to be sited in localities that were good for the “over the counter” punter catchment, near to a good pub, restaurants, post offices and banks where there is footfall and a modicum of leisure facilities, enabling people to congregate. As the high street started to lose sales to internet retailers, shops became vacant. Rents fell and bookmakers started to think more about trading on the High Street.
The FOBTs made that move possible – a reliable, weather-proofed business product that produced reasonably consistent returns. The terminals, coupled with lower rents, caused a migration from the back street to high street.
Bookmakers are now trading next to the likes of Top Shop, Tesco Express and Costa. Members of Parliament do not seem to like that! So having legalised the business in 1963 where should they trade? In the middle of a field where no one lives or works?
I suspect that some form of restriction on FOBTs may be introduced that will cause the closure of shops.
The fall out will hit bookmakers and racing. High street shop leases taken in good faith on reasonably long tenures will be closed, and landlords will be invited to offer reversed premium terms in which to hand back the lease.
Racing will be hit quite hard because experience shows that when you have three shops in a locality and one closes, the revenue from the closed shop seems to evaporate into thin air rather than going to the remaining shops. Some revenue maybe picked up, but not much. The two shops left will not match the turnover of the three shops had they all stayed open. So there will be a levy loss, but more important these days is the loss in media payments which are collected on a per shop basis. Racing will have to cut its cloth accordingly, something it finds hard to do.
Betting shop windows given over to advertising horse racing will disappear, the local newsagent near the closed betting shop will sell fewer copies of the Racing Post and interest in racing will decline.
You would think that given the problems and the symbiotic nature of racing and betting that both would be able to settle the issue pragmatically. It has not happened in fifty years, I doubt it will start now. The falling value of betting shops demonstrates there is no more fat left to eat on the meat of betting shop profits.