Will UK’s betting machines move hobble Irish horse breeders?
Cantillon: UK racing could lose £40m in levies from bookies, which is bad news for us
The UK is cutting the maximum single stake that can be wagered in bookies’ betting machines from £100 to £2. File photograph: Daniel Hambury/PA Wire
At first glance UK government moves to cut the maximum single stake that punters can wager in betting machines in British bookie shops to £2 from £100 has little impact on Ireland.
Paddy Power Betfair believes that it could cost up to €52 million in revenues, around 2 per cent of its total. Following its annual general meeting , chief executive Peter Jackson was far more sanguine about the ruling than rivals, who warn that it will cut industry profits by £200 million and cost hundreds of jobs.
The Irish group is less exposed to its impact and Jackson maintains that its British outlets are bookmakers rather than high-street casinos, suggesting that they are less dependent on the machines.
Furthermore, the change will not apply in Northern Ireland, making this even more remote from an Irish perspective. Unless, that is, your business is breeding thoroughbred racehorses.
Bookmakers in Britain pay a levy to racing – provider of their mainstay product – that is tied to revenues. British Horseracing Authority chief executive Nick Rust estimates that the stakes reduction could cut money to the sport by £40 million to £60 million.
A proposed extension of the levy could mitigate this, but the move may still leave racing poorer. Britain is the biggest market for Irish racehorses, taking around two out of every three sold.
Less cash in British racing’s pot means less returns to owners, which could potentially mean less demand for horses, with an obvious knock-on effect for anyone who produces and sells them.
Rust acknowledged to the BBC that British racing does not yet know exactly how this will play out. His organisation will be watching carefully as things unfold; so will plenty of Irish breeders.