As the margin generated by the PMU in November and December was better than expected, France Galop is making an upward revision of its net profit for the end of December from €8 million to €15 million.
As the Board of Directors has committed to paying out the entire surplus, €15 million will be redistributed for the 2020 season.
Prize-money and premiums (owners and breeders) of races that took place between 11 May and 31 December 2020, and which were subject to a reduction in prize-money, will be increased. Redistribution will take place in stages between 27 and 29 January 2021.
Over the course of the season, prize-money dropped by 20%: until the first lockdown, prize-money had been the same as in 2019 and showed an overall decrease of 5% compared to the previous year between 11 May and the end of the year. Hence, it is mainly the two months when there was no racing that explain the drop of prize-money in 2020.
The health crises has led France Galop to implement a deduction in prize-money from 1 March.
The evolution of the health crisis and the latest government announcements suggest that cafes and bars will remain closed until next June. 4,000 PMU outlets are thus closed, just as they have been since the beginning of lockdown at the end of October 2020. These operating conditions have led to a 25% drop in betting turnover, resulting in a decrease in the net contribution of the PMU of around €20 million each month.
France Galop has made the decision to budget for a prize-money package of €250 million, the equivalent of 2019, plus the added measures of support for the two-year-old flat racing program and those for the jumping recovery plan. In January and February, prize-money has and will be paid out at 100%.
As foreseen and presented to the France Galop committee last December, a deduction of prize-money and premiums will be applied from 1 March onwards. This is intended to manage the risk, which has become highly probable, of a 25% drop in betting turnover that is likely to affect the first half of the year. If caution is required, the objective remains to redistribute the amounts initially withheld at a later stage.
The level of the deduction will be decided during the second half of February 2021, following a meeting of the Flat racing and Jump racing boards. It will be applied in linear fashion to all races featuring in the program, but will not be applied to transport allowances, which will be paid out at 100%. By way of illustration, if it were to be decided today, the deduction would be 15%.
As in 2020, the board of directors will conduct a regular analysis of the development of the health crisis and the impacts of COVID-19 and of the government measures regarding the horse racing betting industry. It commits to pay, as soon as possible, all or part of the amounts withheld since 1 March, if the PMU’s annual net income is better than the forecast its managers can make today, given the assumption that 4 000 PMU outlets will remain closed until June.