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Cancelled Races to Take Toll on Betting Industry - Market Business News
26th April, 11:10The gambling industry in Britain has already nosedived in recent weeks due to the lack of live sporting events during the current coronavirus outbreak, with cancelled horse races taking a major toll on the betting industry.
Between them horse racing and football are responsible for 75% of sports betting turnover, racing being the second most watched and gambled on sport in the country making it crucial within the general betting industry.
Racing has been suspended in Britain since March 18, in UAE since March 22 and in Ireland since March 24 with some meetings allowed to continue in the United States and Australia, though this does not bring in the kind of revenue the bookmakers are used to.
Gambling levels have fallen sharply due not just to betting shop closures, but because of the absence of live sport and racing in particular which is crucial for online betting turnover.
Sports betting overall in the UK brings in around £1.4billion to bookmakers annually, though several of the key players have said that their profits for this year will be significantly affected by social distancing measures taken to attempt to curb the effects of COVID-19.
While the headlines are of doom and gloom, some bookmakers are not yet ready to panic. bet365, one of the main horse racing bookies in the country has guaranteed no layoffs during the crisis though the same noises have yet to come from other major players.
The Stoke-based online betting behemoth set out a multi-million-pound package for its workforce to cope with the current crisis, meaning its huge worldwide team of more than 4,500 people will not see any cuts to their wages.
GVC Holdings, owner of William Hill and Ladbrokes along with Flutter Entertainment which owns Paddy Power, Betfair and American giant TVG have saw shares fall 35% this month and it remains to be seen how such firms will react.
Around 50,000 people are employed in betting shops around the country and another 10,000 are active within the online sector, now the main source of revenue for gambling firms.
While the coronavirus and its effect on horse racing have proven to be generally bad, one online bookmaker has actually seen an upturn in fortunes with 888 Holdings reporting being up 31% in terms of its stock.
Usually stock markets tend not to react well to profit warnings, however investors were more than a little encouraged by the coolness of 888's recently revised outlook versus forecasts put out by its main rivals.
The reason for the rise in its share price is said to be because, while the cancellation of many sporting events including major horse races has impacted on profits, the hit is now said to be thought of in terms of single-digit millions rather than the nine figures suggested by other companies.
Shoots of recovery have sprouted within racing too. There is talk of Britain being able to run its first four classics a month late, the 1000 and 2000 Guineas taking place in June and the Derby and Oaks in July although this is not yet confirmed.
Meanwhile, the French racing authorities are keen to get going again as early as May 11 which would be a huge relief, however once again there is no confirmation yet on whether British horses will be allowed to travel to take part in events meaning betting interest could be minimal.
Horse racing has taken several hits recently during these exceptional times, with its reputation dragged unfairly through the mud when criticism was made after the Cheltenham event went on as planned on March 10, despite the fact that two million people a day were using the tube, airports remained open and other major sports events and concerts were allowed to go ahead too following government advice.
Given that horse racing and gambling are inextricably linked, the sport is fully invested in what happens to the gambling industry as a whole and vice-versa.
The betting sector has already had to deal with a recent wholesale ban on the use of credit cards to fund accounts, something put in place as of April 14 by the Gambling Commission.
The regulatory body imposed the ban in order to better manage gambling related harm, the timing seen as apt given that more gamblers have turned to online betting of various types to relieve boredom during a so far month-long lockdown during the pandemic.
If horse racing were to resume in June in Britain which is the current estimate, the long term hit will be minimal but for sure the cancellation of horse races has absolutely made its mark.