RACECOURSES have been warned to prepare for a 10% drop in media rights revenues in 2020.

The expected fall in payments from the rights holder SIS to Irish racing is due to two factors – the weakness of sterling against the euro, and the unexpected rise in betting shop closures in Britain.

The current deal, which runs out in 2023, sees racecourses receive approximately €7,000 per race for live pictures. However, the payments are in sterling and are linked to the number of betting shops taking the coverage.

Racecourse managers were given an update on the payments this week at a meeting of the Association of Irish Racecourses [AIR]. Paddy Walsh, AIR chief executive, said: “We were very happy with the deal when it was agreed but we always knew there was a risk that the payments could be reduced. We are forecasting the licensed betting office [LBO] rights will be down 10% next year, although that will be partially offset by increased revenue from live streaming, which is growing but still a much smaller figure.”

The recent severe reduction in the maximum stakes allowed to be bet on fixed odds betting terminals in British betting offices has been a major contributory factor. “Dropping from £100 to £2 was more than anyone anticipated,” Walsh said. “That has led to shop closures which in turn affects our deal.”

This year alone William Hill closed 700 shops in Britain and Ladbrokes is in the process of shutting down 1,000. There are still over 8,000 shops in operation in Britain. In Ireland at least 26 betting shops have closed this year, reducing the total number here to around 840.

Media rights account for approximately half of racecourse revenues, according to Walsh. Attendance figures for the first half of 2019 indicated that the average attendance was up 6.2% and Walsh believes that the second half of the year was “pretty much lineball” for most tracks.

Rising costs

However, running costs – such as rates and insurance premiums – continue to creep up. Walsh said: “The insurance market has definitely tightened up. We have a good policy which covers major disasters but other areas, such as insurance for jockey injuries, is tricky enough.” He said racecourses have not suffered too much from the ‘compo culture’ which has affected other public liability insurance costs.

The rollout of free public WiFi at all racecourses is virtually complete, Walsh says. “It’s already installed on 19 tracks and another six will have it before their first meetings in 2020. That only leaves Laytown.”

The Irish Field understands there are still plans to have this service sponsored, most likely by a major bookmaker.

Paddy Power is thought to be the front-runner and the successful party could pay up to €300,000 to have users directed to their website upon logging in.

Such a deal could pose problems for racecourses who have sponsorship deals with other betting firms. It is possible that those tracks could be forced to pay a hefty ‘stand-down’ charge to the WiFi sponsor if the track wishes to avoid embarrassing its race sponsor.