British racing is running out of road - and only bold reform can stop it failing

British racing is on an unsustainable course. Foal crops are falling, crowds are thinning, betting is weakening, and the 'Racing Tax' would only deepen the strain. Strength at the top end cannot mask the weaknesses across the rest of the sport. As a former participant and now an investment analyst observing from the outside, I can see the same truth from both perspectives: the sport needs change. 

What does 'success' look like for British racing? Is it growth in betting turnover, higher prize-money, fuller grandstands or stronger television audiences? Ask different stakeholders and the answers is likely to vary. In a healthy system, a competitive product lifts betting volumes, fills the stands and strengthens media-rights income. That income helps fund higher prize-money, rewarding owners who reinvest and creating the virtuous circle on which racing depends.

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The reality is very different. The sport has been moving in the opposite direction. Attendances at Flat meetings have fallen by almost a million since 2015, betting turnover dropped 17 per cent in just two years between 2022 and 2024, and the foal crop is projected to decline 25 per cent by 2026. Instead of reinforcing the virtuous circle, these pressures spin it in reverse: fewer horses, smaller fields, weaker betting and less money flowing back into the sport. The Racing Tax would compound pressures the model is already unable to withstand.

The sport's deepening crisis

• Attendances at Flat meetings have fallen by almost one million since 2015
• Betting turnover is down 17 per cent in just two years, reversing 15 years of growth
• Britain’s foal crop is falling rapidly, threatening to make the fixture list unviable
• The levy remains steady, but only thanks to unusually high bookmaker margins
• Without reform, the sport is sleepwalking toward a breaking point

The underlying fault lies in governance. Successive structures have failed to bring alignment – incentives pull in different directions, and no single authority has the power to steer the sport. Disputes have become more frequent and more public, leaving little sign of common purpose. The prolonged delay to Lord Allen’s appointment as BHA chair symbolised those fractures: a visible reminder of how hard it has become to find unity when it is needed most. If this level of infighting exists amid apparent stability, imagine the strain when the cycle turns. 

While governance rows dominate the present, the stage was set long ago – most notably with the Office of Fair Trading’s intervention in 2004. That ruling redrew the sport’s power map, weakening the then BHB’s influence and formalising greater commercial control for racecourses to stage and monetise their own programmes through media and data rights. The BHB (and later the BHA) retained only a small pool of 'strategic fixtures' and the centre of gravity had shifted. What followed was a steady acceleration in fixture-list growth and the rise of the media-rights economy that now underpins British racing. 

That shift was soon visible in the numbers. Over the past three decades, Flat prize-money has risen from around £35 million in the mid-1990s to £131.2m in 2024. On paper, that looks like genuine progress but, set against the fixture list, the picture is less flattering. The number of Flat races has increased by more than 60 per cent – from roughly 4,000 a year in the 1990s to 6,470 in 2024 – with almost all the growth concentrated at the lower end of the programme.

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Back in the 1990s, around 2,000 races fell into the old Class E-G bracket; by 2024, Class 5 and 6 contests alone exceeded 4,000. The average purse at this level has gone from £3,700 in 1994 to £7,600 in 2024 – more than doubling in nominal terms, but, adjusted for inflation, that £7,600 is worth just £2,850; rather like buying a packet of crisps and finding it half the size it used to be. 

On the betting side, data from the International Federation of Horseracing Authorities (IFHA) shows turnover at £11.3 billion in 2004, rising to £15.3bn by 2019 – a compound growth rate of around two per cent a year, despite the increase in the number of races staged over that period, and barely keeping pace with inflation. Gambling Commission figures, while not directly comparable, show that progress has gone into reverse: turnover fell from £13.4bn in 2019-20 to £11.8bn in 2023-24, wiping out 15 years of growth. The main driver has been the impact of affordability checks, which have diverted activity towards the black market, meaning protection lost for customers and funding lost for the sport. Racing did not set these rules, but it lives with the consequences. 

Despite the drop in betting activity, the levy – which provides around a third of prize-money and is based on bookmaker profits rather than turnover – has so far held steady. That stability, however, rests on shaky ground. Gambling Commission figures show bookmakers’ gross yield, the share of stakes they keep after paying winnings, rose to 10.8 per cent last year, well above the ten-year average of 9.1 per cent. With turnover already on course for another mid-single-digit decline, a return to more normal yields would reduce levy receipts by more than 20 per cent. The levy has been managed prudently to smooth good and bad years, with currently £44m in reserves, but that buffer would quickly erode under sustained pressure.

Britain’s showcase meetings remain resilient, yet away from those peaks, attendances have been falling. Royal Ascot, Glorious Goodwood, York’s Ebor festival, Champions Day and the St Leger meeting still draw strong crowds, but the wider picture is far more concerning for what remains Britain’s second most-attended sport. In 2024, Flat attendances were almost a million lower than in 2015 – 2.95m compared with 3.87m. Median attendances at tier one Flat tracks have dropped sharply over this period – Ascot (-42 per cent), Doncaster (-44 per cent), Newbury (-46 per cent), Newmarket (-32 per cent), Sandown (-22 per cent) and York (-20 per cent). Strikingly, just six Flat courses in Britain have managed to grow their median attendances since 2015, underlining how isolated success has become in an otherwise shrinking landscape. The marquee meetings hold firm, but they are propping up an everyday product in steep decline.

One of the most pressing challenges for British racing lies in the sustainability of the foal crop. In 2023, the Thoroughbred Breeders' Association commissioned PwC to produce an industry review that made for sober reading. The report found the median yearling sale carrying a loss of around £33,000, a figure that has been climbing steadily since 2014, driven in part by escalating stallion costs. Yet public perception, shaped by the eye-watering prices paid for a select few yearlings, often masks the truth. The market is heavily skewed: most sell at a loss, while a handful of big-ticket successes disguise the fragility beneath.

PwC warned that losses have reached a level that calls into question the sustainability of the British breeding industry and that, if unchecked, persistently negative profitability will force breeders out - leading to a continued contraction in numbers. The TBA said in May the foal crop is already running below earlier estimates and could fall a quarter from 2022 levels by 2026. Average field sizes, which peaked at around 12 runners per race in 2000, have since fallen to nine. They have been broadly stable in recent years; however, PwC projects that without a reversal, they could shrink to just 7.1 by 2030 – a level that should make much of the fixture list unviable. 

Crowded fixtures, thinning attendances, fewer horses on the ground and declining betting turnover all point to the same conclusion: the sport is being asked to carry more strain than its current foundations can support. The proposed Racing Tax would only add to those pressures, although it hardly needs more ink spilled. Governance has left the sport divided, and that disunity has been compounded by a funding model that delivers less back to racing than almost anywhere else. 

Paul Bittar, then BHA chief executive, captured it neatly in Deloitte’s Economic Impact of British Racing report (2013): “The quality of our racing may be the envy of the world, but our central funding model is quite the opposite.” 

The comparison with other jurisdictions underlines the point. On the latest internationally comparable data (2019), Britain’s betting turnover was twice France’s, but France delivered nearly eight times more back to racing. In countries where tote monopolies prevail between five and nine per cent of betting flows back into the sport. In Britain, the return amounted to only 0.5 per cent of turnover, based on IFHA data that excludes the opaque, privately negotiated media-rights payments. Even allowing for those, Britain still trails those tote-dominated systems by a wide margin. 

Setting Britain against tote-monopoly neighbours is a fool’s errand. It isn’t apples with apples – it’s more like weighing an apple against a watermelon and wondering why the scales don’t balance. Australia offers the lesson worth heeding. Once a tote monopoly, their tote has shrunk from 85 per cent at the turn of the century to just 34 per cent in 2023. Tote betting has flatlined, but the bookmaker market has exploded, turnover soaring from A$1.4bn to A$16.8bn over the period. That boom has powered the sport itself, with prize-money rising from A$299m in 2000 to A$1,036m in 2024. 

Over the past 30 years, Flat prize-money in Britain has grown at around five per cent a year, compared with 5.6 per cent in Australia. But below stakes level the gap of average race prize-money is striking. In 1994, the average non-stakes purse was A$6.2k in Australia and £5.8k in Britain. By 2024, Australia’s had risen to A$41.7k, while Britain’s reached just £13.6k — a near seven-fold increase in Australia compared with only 2.4x at home, not even keeping pace with inflation. 

Australia’s foal crop has declined by around a third since the mid-1990s – a trend matched by a gradual 18 per cent reduction in its fixture list. Yet despite staging fewer races, it has grown both turnover and prize-money by optimising the programme and extracting more value from each race. Britain has gone the other way, expanding its fixture list by 60 per cent to deliver diminishing returns. One model rewards efficiency; the other leans on volume, and the difference could not be clearer.

At the top of the sport, the picture is more encouraging. While Britain’s Group-race prize-money lags behind Australia in absolute terms, its growth trajectory has been broadly similar. Against nearer neighbours such as France and Ireland, average purses from Group 1 to Group 3 have been consistently stronger, and Britain’s average Group 1 prize-money is not far behind even the US. The emphasis on the top end has not been misplaced; often criticised within the sport, it nonetheless deserves credit, as that focus has kept Britain’s Group races among the world’s best, maintaining standards and prestige that still set the sport apart. 

That commitment has ensured Britain remains firmly in the global elite. Over the past 20 years, an average of 16 per cent of the world’s top-rated horses have been trained in the country, according to Longines, second only to Japan in recent seasons. More than 40 per cent of this year’s highest-rated horses (120+) worldwide have raced in Britain, showing the country still attracts and stages more of the sport’s best than anywhere else. 

Britain’s heritage runs deeper than most, but heritage alone is not enough. The top end has not been left to chance; it has been protected with intent. And it matters, for this is the shop window, the part that draws in the crowd and the capital. Let it fade and we weaken the very foundation on which the sport still stands tallest. 

The more concerning aspect is that, despite the strength at the top end, success is not filtering through to the rest of the sport. They are, of course, very different products: one still carries the lustre of the Sport of Kings whereas the other is closer to the Sport of the Middle-Class with Disposable Income, which doesn’t have quite the same ring to it, and certainly isn’t backed by the war chest that filled the ring at Tattersalls Book 1 this month. 

Which takes us back to the question posed at the outset: what does success look like? The truth is that British racing’s fragmented framework drives each stakeholder to pursue their own goals, often at the expense of collective progress. Everyone would gain from a stronger product, yet commercial realities keep focus fixed on near-term returns. As one of the great investors, Charlie Munger of Berkshire Hathaway, once said: “Show me the incentive and I’ll show you the outcome.” Racing’s incentives reward the next meeting, not the next decade — and that short-termism runs deep. 

The problem British racing faces is structural, a matter of who truly controls the product and how it is governed. Few examples illustrate that contrast better than the PGA Tour. Both the BHA and the PGA Tour are charged with running their respective sports, but the similarities end there. The PGA Tour controls its own destiny: it owns the media rights, designs the schedule and ultimately decides how the product is shaped and sold. It is not the golf courses that set the terms. In British racing it is the reverse. The BHA has shown little to no authority over either the commercial rights or the bulk of the fixture list — and in many respects the tail is wagging the dog. Which begs the question: under new chair Lord Allen, what levers does the governing body really have? 

Australia has shown that less can be more. Calls for something similar here have long met resistance. Arena Racing Company, which staged nearly half of Britain’s Flat fixtures in 2024, has been firm in defending the size of its programme. It’s not hard to see why: it runs fewer top-class races than its peers and 76 per cent of its programme sits in Classes 5 and 6. Its model is built on volume-driven media-rights revenues so cuts would hit it hardest.

Media rights themselves remain contentious, with deals closely guarded by both The Racing Partnership (TRP) and Racecourse Media Group (RMG). The risk is that racecourses become ever more dependent on off-course betting audiences while the live product weakens — smaller crowds, less atmosphere, fewer new fans. Newbury illustrates the shift: attendances have fallen almost 40 per cent from their peak over a decade ago, yet media-rights income has risen from just over £2m to £8m, now accounting for 43 per cent of racing revenues following its recent switch to TRP. 

Persisting with the status quo risks sleepwalking towards a breaking point. The foal crop is already flashing red: unless the trend reverses, field sizes will shrink further – and the consequences are clear. Smaller fields weaken the product; a weaker product depresses betting turnover; and falling turnover inevitably squeezes both media rights and prize-money. Carry on as we are and the decisions will be taken out of racing’s hands, and instead of shaping the fixture list we will be dismantling it under duress.

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This reliance on media rights carries another risk: that bookmakers start to question whether they are getting value. Unlike the levy, these commercial agreements are not set in stone. Flutter offered a glimpse of that last year when it pulled its prices from Bath, pointing out that media-rights payments now exceed the levy by more than two times, with little transparency over how much flows back into the sport. For top-tier bookmakers like Flutter, racing no longer sits at the centre — overseas growth is what drives their valuations and commands their focus. The real test will come at renewal, when the sport’s reliance on a few global operators is measured against their shifting priorities abroad. 

The problems run deep, but I don’t believe racing has passed the point of no return. Some argue for levy reform and sweeping government action outside of the Racing Tax push, but that is not a strategy. Lobbying has its place, but the sport cannot build its future on Westminster. It has to focus on what it can control. The reality is that under the current structure, alignment across stakeholders feels out of reach. If it cannot be found, something else will have to give.

The appointment of Allen offers hope that the sport can begin to think long term and bridge those divides. What is needed is a strategy that puts punters and owners back at the centre – the sport’s most important stakeholders, yet too often the most marginalised. Get that right, and every other stakeholder will benefit. That means building a stronger product, 'premierising' the programme, rewarding quality, not propping up mediocrity. It starts with rebuilding incentives – not around self-preservation, but around shared success. At this point, tinkering at the edges won’t do. Racing doesn’t need gentle evolution. It needs revolution.

Read these next:

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Levy Board halts funding for ITV's Champions: Full Gallop amid betting tax rise fears 

'Parts of the industry are in denial' - British and Irish foal crop declines by almost ten per cent in a year 

Why William Hill could close up to 200 betting shops - and how fear of gambling tax rises is a driving factor 

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