Flutter Entertainment Calls for Urgent Reforms in British Horseracing

In a recent opinion piece for the Racing Post, Ian Brown, CEO of Flutter Entertainment’s UK and Ireland branch, highlighted the pressing need for reforms in the British horseracing industry. Brown noted the paradox of rising earnings alongside declining prize money and audience participation, emphasizing the urgent need for change.

Financial Challenges Affecting Horseracing Profitability

Brown pointed out that the high costs associated with betting and streaming rights are negatively impacting profitability. “Our data shows how declining prize-money leads to declining field sizes, making the product for customers less compelling. This, in turn, leads to lower betting revenues, and so less revenue for the sport,” Brown stated.

This decline in engagement has created what Brown described as “a clear and concerning spiral,” where decreasing field sizes reduce the attractiveness of the sport, further diminishing revenues and making it difficult for Flutter to justify its investments.

Negotiating Better Terms

Sky Bet and Paddy Power, two of Flutter’s top brands, have ceased offering early rates for meetings at Chepstow and Bath as part of the company’s response to these challenges. Flutter also plans to renegotiate its agreement with Arena Racing Company (Arc) to improve payment terms for betting and streaming rights.

Brown underscored that the current media costs and the shrinking audience are unsustainable for Flutter’s continued investment in British horseracing.

Earlier this year, Flutter announced a shift to primary listing on the New York Stock Exchange (NYSE), aiming to optimize operations and expand its presence in the lucrative US market. “We, as Flutter, simply cannot afford to keep investing in horseracing as an unprofitable product with a shrinking audience, where media costs are escalating at significant rates, and the underlying quality of the product is declining,” Brown added.

Future of Media Rights Contract Uncertain

The media rights contract between Flutter and Arc is set to expire in 2027. The outcome of the renegotiations and their impact on the horseracing industry remains to be seen.

However, it is clear that significant changes are needed to sustain the industry and ensure its profitability and appeal to both operators and audiences.