Racing in Australia will be very different in 2050 than it is now.
It is my fear that racing-2050 will be far inferior to robust industry what we currently know and love. I actually think the changes will come in a much shorter time frame, sadly.
My Cassandra-type view is in sharp with contrast with accepted wisdom.
Most would say that racing is ‘flying’, on an ‘upward spiral’. They would point to the record prizemoney of $670M, which was distributed last season, up 7% on the previous year and double compared to what it was ten years ago; that yearling sales are up 20% so far this year; and stud fees are expected to rise again this season.
But, to me, alarming ‘straws are very much in the wind’.
Racing is very much a mature business and one which I believe is showing the characteristics of up-coming of decline.
Businesses, as a rule, don’t last forever. For example, of the 100 hugely successful companies that made up the 1918 Dow Jones Index, 87 are now defunct, only 13 originals remain.
Racing is not exempt to change. My dad, bookmaking guru Bill Waterhouse, thankfully hale and hearty at 96 years of age, often reminisces of his bookmaking golden years. Interestingly, that included greyhound live-hare coursing and pony racing. Both are long gone.
Dad reminds me that more patrons would go to the trots, in the sixties, on the coldest, wettest Friday night of the year than would go the Golden Slipper race meeting. He can’t believe that practically ‘zero’ crowd attends Saturday night trots now.
But what are these foreboding ‘straws in the wind’?
The only income racing gets is from punters. Everyone else is a ‘supplier’, including owners (who are paid the lion’s share of the $670M prizemoney).
Punters are betting less and will bet even less in the future.
The TAB pools over the last two years have dropped, silently, by 20%.
Several companies that operate of state-wide TABs had bookmaking businesses. They have all been closed or sold. Luxbet is the most recent to disappear: simply closed its doors recently.
All the taxes have gone up. And the State governments are now introducing a “15% consumption tax”, as already operates in South Australia. Foolishly, racing didn’t oppose this new impost. This is the ‘straw that breaks camel’s back’ and makes most corporates’ business untenable.
William Hill wants out. Others are said to be considering their future. In two years, I think there might be just one corporate, the biggest surviving. Pity help punters!
The big losers are the punters (and racing). The new taxes have forced the bookmakers to increase their margins, often barring or restricting anyone who ‘refuses’ to lose less than the 10% profit margin they now need (the average percentage loss is now more than that). Five years ago, Corporate bookmakers were pleased with an average 4% margin.
When the margins increase, turnover automatically decreases as the punters, as a whole, lose their money more quickly. Racing suffers.
The government has barred credit betting this month, with no kick-back protest from racing. And at a time when credit and credit cards are the norm for every business. A bitter blow to betting turnover and racing.
Apart from the money aspect, the fan base has not been properly renewed. Young people see racing as a place to party. They don’t bet or aspire to race horses. Ugh!
I’m pessimistic about our future. Cassandra, was given by the Greek god Apollo, trying to win her affection, the power of perfect prophecy. When she rejected his advances, he inflicted on her the curse that would never be believed.
I fear that I might be a new Cassandra.