Financial crisis threatens racing industry again
Italy: Horseracing has hit another crisis as its deep-rooted financial problems continue to bite, with speculation that racing might be cancelled between September and December to save on paying out prize-money.
The latest bombshell for the 50,000 people in Italy who rely on racing for a living, is that €35 million promised to the sport by the government in February will not now be forthcoming, while the Banca Nazionale del Lavoro (BNL) has refused to extend any more credit to Assi, Italian racing's independent governing body, which is expected to cease existing next month.
The government has set August 20 as the date to turn into law a bill proposing the cancellation of Assi, transferring its functions to a new structure within the ministry of agriculture, while the customs agency is to oversee the betting industry.
The ministry is expected to deal with a number of management issues which they believe have hindered the process of restructuring the racing industry in Italy, while they are exploring the idea of working with Lega Ippica, a group made up of sections of the racing industry, such as racetracks and breeders.
The €35 million was promised by agriculture minister Mario Catania on February 29 but last week he has appeared to backtrack. "I am not the minister who holds the cash," he said.
"I can act as a go-between for the racing industry within the ministry of economy, but I still don't have the direct financial assets needed to solve certain problems.
"Horseracing has been in a crisis for a couple of years now, which is not helped by the decrease in betting movement. I will work with the racing industry to try to find all the possible solutions."
Betting turnover has been in decline for several years, with 13 percent and 12 percent drops in the last two years as punters have been more keen to wager on French and British racing.
The upshot of all these factors is that prize-money in Italy, which was this year set at 40 percent lower than last year, is likely to be slashed again for 2013 and there will be delays this year in the payment of any prize-money earned from May onwards.
Fabrizio Procino, racing secretary at San Siro racecourse in Milan, said: "The problems could arise in the long term, as the budget for 2012 is likely to be respected and prize-money for the month of May should be paid towards the end of August, and for the month of June towards October - probably 70-90 days at least after races have been run.
"All sections of the racing industry have come together as 'Lega Ippica' and have shown their availability to handle all the operational side of horseracing, leaving the administration side to the ministry."
Franco Raimondi, director of SGA Sales, said: "The BNL problem is a technicality, the situation is chronic regarding the lack of financial support and there will be a delay in the payment of prizes.
"Whereas the situation is not bright at the moment because horseracing operates in a sort of 'oversized' world compared to what its income is at the moment, its lower-level activity should be cut.
"Investment has been lacking in the good years and the crisis means expectations have fallen, therefore horses are sold and in the last three months 15 horses of good level have been sold to foreign buyers as a sign of internal market weakness.
"The industry needs to move forward, strikes or long stops in the sport have coincided with a breakdown in betting movement, and with the restart of racing you can only claw back very little of what is lost, freezing the activity means freezing income and betting movement.
"The Lega Ippica is a private organisation created by racecourses, breeders and other sections of the industry, that's the only opportunity there is at the moment for a reorganization of the system."