The issue of choice – and the inherent freedom of man to choose – lies at the heart of existential thought and practice.
Sartre made it pretty clear; “every choice made has its pay off and price and which is which, in many of the choices either willingly undertaken or forced upon [us], is not readily predictable and foreseeable”.
The existential choice for the horse racing industry is whether to exist or not.
Forget the fact that the state levy is an outmoded and anachronistic throwback. It would, if conceived today, be as likely as the government taxing Uber to pay for black cabs.
Forget the fact that it was racing that initially pushed for Fixed Odds Betting Terminals to be permitted in Licensed Betting Offices.
Forget the fact that even to this day, some of the most influential parliamentarians are connected to horse racing; perhaps through location, proximity to power, school or even heredity.
Forget the fact that horse racing chose not to pay up for its own pari-mutuel betting business, at a time when this format is, at last, due to the economics above, coming back into vogue.
Forget the fact that bookmaking now takes over 40% of its revenue from UK racing from customers based abroad. Yes, it pays tax; no, it pays no levy.
Forget that due to its rather pugnacious approach, the betting industry is all but ensuring a “right to bet” is at least considered seriously, or actually imposed, by what is in effect a free market, non-interventionist government.
And forget the fact that the industry has a long track record of internecine squabbling, fighting among themselves like hungry rats in a sack and ultimately sacrificing strategic common sense for short term advantage, especially where racing is concerned.
The reality is that racing and the betting industry are at war.
Racing is a highly commercial business. It owns vast swathes of private land. Hotels sit on this land. It hosts rock concerts. It owns and distributes picture rights and digital rights (neither even considered when the Levy was conceived). It is a multi-channel entertainment business with a core equine product.
It is irrefutable that modern youth prefer football. They could probably not even name the four legged stars, let alone the two-legged supporting act.
The racing product has failed to move with the times, to grow its share of Generation X. Whereas the industry would have some believe that betting on horseracing has grown over the last two years, it is a product in decline.
The betting exchanges generate vast, algorithmic based volume for “professional” (of course non- licenced, non-taxed, hugely wealthy) amateurs. These trades lock in a tiny margin. Consequently, pricing in the industry, the source of profit, is under continual pressure. As are the marketing teams of the bookmakers who need (ill) conceived, ever more fanciful concessions and free bets, all to attract a canny if shrinking client base which they hope to cross across to play on slots and casino games.
It is unquestionable that racing is rapidly becoming a loss leader for UK bookmakers. Levies, taxes, concessions and media rights cut into declining revenues.
By creating the myth of approved betting partners, racing is treating bookmakers as naughty school boys who can be told what is the right way to behave and given a badge to wear (not at Ascot of course) for so doing. Inflammatory definitely; patronising at best; incendiary at worst.
But racing still has a place.
It is the fish and chips of an increasing and varied international betting buffet. It could and should be made more modern, more appealing, part of a Saturday afternoon’s betting entertainment. It must become integrated into the betting mix, not standing aloof and alone.
Despite everything that bookmakers claim, there is real evidence of financial cross over between racing bettors and machine players.
Racing is still a contributor to shop profits and underpins many high earning shops. Racing and greyhounds are wonderful filler products, especially in the morning and afternoon and especially if virtual products are included. Betting does not want to lose this product if at all possible.
A pivot point has been reached. If the conflict becomes truly existential, government will be forced to deliver the Judgement of Solomon. We cannot cut the baby in half, but do we let the baby die? Which of its mothers really loves it?
The existential outcome to this conflict is clear: if sense does not prevail, meaning a commercial deal where racing benefits from the overall growth of the bookmakers’ profits on racing and related products and with government once and for all out of the equation, then racing will die. But, after much pain, betting will survive.
Betting in the UK will be smaller. Shareholders will suffer during the transition. Some smaller businesses will fail. The transition will be painful. It may even be that some entrepreneurs in racing become bookmakers themselves (and vice versa).
But the ultimate outcome is foregone. Bookmakers cannot take the product once it becomes uncommercial to do so. And so long as ALL of the industry acts in a similarly logical fashion (if not, of course, collectively) then racing, as we know and love it today, has no future.
Racing’s best chance is to appeal to the great affection that most bookmakers have for the industry. Moreover, it must continue to assume, as part of its strategy, that the bookmakers’ uncanny ability to act for short term corporate gain, ignoring industry dynamics, will subsist. The perfect example is when Corals, a few years ago, split from the industry and so effectively gave birth to the modern day, much reviled, racing picture right, just when racing was ready to concede.
The time for posturing will soon be over. In a world where bets are placed and bluffing abounds, it pays to know the probabilities. In this case, the probability of outcome from an existential clash, if racing crosses the Rubicon from contributory to non-contributory, is 1: that is the death of a marvellous sport.
Death due to the inability of those governing racing to accept that they do not have a perpetual birth right.
Death due to the inability of government to accept it has no place in a commercial sport.
Death due to the continued refusal to recognise and legislate that the betting exchanges are dominated by professionals (be they human or algorithmic) who often earn more than bookmakers (or are indeed bookies laying off taxable profits) and should be regulated and taxed, especially on racing, accordingly.
Death due to the inability of the betting industry to disclose the true economics of the sport and not to turn, myopically, on itself.
But death due primarily to the inability of both sides to accept that this need not become an existential dispute and to find a broker, honest preferably, but objective necessarily, to steer such entrenched egos through to a place where the question can become one of entertainment not existentialism.
Al Insky
July 2016