The France Galop Board of Directors met on Monday, 23 November. The meeting was largely devoted to a review of the horse racing betting situation since the end of October when the country went once more into lockdown, to projections for the remainder of the year and the preparation of the budget for 2021.
Horse racing betting affected by new lockdown phase
While the horse racing industry is very fortunate that it could continue to race in this latest lockdown when many other activities have been forced to cease, betting turnover, which had actually seen an upturn since July, has obviously suffered during this second lockdown.
As a reminder, betting turnover had increased by 15% in July and August, 10% in September and 1.2% in October, a month already disrupted by the Government imposed curfew. The current lockdown saw the closure of bars, restaurants and 4000 of the 13 000 PMU betting shops.
In this climate, daily betting turnover fluctuates between 20% and 30% compared to last year and is obviously severely affected. As to online betting, compared to the past weeks it is growing rapidly, which is very encouraging, but cannot make up the lost revenue suffered from the closing of the betting shops.
If those closed betting shops remain shut throughout December, France Galop will suffer a loss of betting revenue of about €30 Million (i.e. €15 Million per month in lockdown). In this event, it is almost certain that France Galop will record a net loss at the end of the year and will unfortunately not be in a position to make retrospective prize-money allocations for races that took place when racing resumed at the end of May which was under consideration until the second lockdown was introduced.
It is, however, important to note that by the end of the year, France Galop will have paid out €185 Million, which is €10 Million more than the reduced budget of €175 Million that had been announced shortly before the resumption of racing in May. The bulk of these additional funds have been distributed to the on-course betting program of flat and jump racing, as well as owner premiums and transport allowances. In 2020, including the period when racing was suspended, industry funding will have regressed by 25.6% compared to 2019.
What is the budgetary framework for 2021?
The health situation, government measures and their economic impact have obviously been at the heart of discussions regarding the 2021 budget. As these parameters are difficult to predict, it makes for a very challenging budget situation. France Galop can nevertheless draw on the experience of the year 2020 as we now have a more accurate idea of the economic impact of the various situations we experienced (no racing, curfew, lockdown).
Without finalising the budget at this stage, the directors wanted to establish a framework and principles for managing the various expenses and investments of France Galop. This is a first draft that will benefit from the discussions that will take place when it is presented at the next France Galop Committee meeting. It is only after the Committee meeting that the Board of Directors will vote on the 2021 budget.
The directors have reiterated their objective of returning to the original prize-money level of 2019, added to which will be the first measures of the post-Covid recovery plan for flat racing, as well as jump racing, the latter one being currently discussed by the Jump racing Board.
Even though one month of racing in lockdown costs France Galop about €15 Million and considering that the risk of disruptions of this nature cannot be ruled out in the next year, the directors have nevertheless recommended to budget for the distribution of the prize money level of 2019, whilst retaining a percentage of the amounts due, similar to what has been in place for several years now for owner’s premiums in flat racing. The withheld amount would, as soon as it would become possible, depending on the evolution of the health situation, be paid in full or in part to the beneficiaries. It would therefore be a deferral of payment unless there is a serious worsening of the situation in 2021.
The management of France Galop also explained the principles for managing the expenses included in the 2021 draft budget. In exceptional circumstances, the way of monitoring and incurring France Galop’s expenses (operation costs and investments) will also have to be dealt with accordingly. France Galop’s strict budgetary measures have made it possible to reduce its expenses by €14 Million in 2020. The 2021 budget will be managed according to the same principles.
Evolution of female jockey allowance in flat racing
Following a renewed request by the Jockey’s association and Trainer’s association, the of the female jockey’s allowance was discussed by the Flat racing committee.
More specifically, the discussion focused on the accumulation of weight allowance granted to female apprentices and young female jockeys and the situation of their male counterparts who experience more difficulties than before to finding rides and to thus gain more experience.
The directors first reaffirmed their commitment to the 1.5 kilos weight allowance in flat racing that in just a few years has enabled female jockeys to gain experience and has brought to light new talents. However, they did recommend a few changes that will be incorporated in the 2021 general conditions of the racing code, which the Board will vote on in December. The principle of these changes is to cap the weight allowance for female apprentices and young female jockeys at:
- 2.5 kilos when they ride for a different trainer than the one they are apprenticed to
- 3.5 kilos when they ride for the trainer (employer) they are apprenticed to
Next France Galop Council and Board of Directors meeting on 14 December