Horse Racing To Feel Brunt Of CrackdownJake Cooper | 08 Mar 2018
Sponsorships of various sports, including horse racing, may be next in line for considerable cuts as Ladbrokes Coral gets ready to reign in its sponsorship spending following the significant reduction of the allowable maximum bets on fixed-odds betting terminals. The review of sponsorships by Ladbrokes Coral could effectively translate to taking its £8 million annual sponsorship-spending budget down by a couple of notches.
The crack-down on maximum bets at fixed-odds betting terminals has an enormous impact on the company’s business portfolio as a whole, as Ladbrokes Coral runs the United Kingdom’s largest chain of betting shops with fixed-odds betting terminals. The crackdown is bound to cause a ripple effect, affecting all of its other business endeavours as well.
Ladbrokes Coral collects more than half of its total revenue from fixed odds betting terminals. When considering the figures, it’s not hard to understand why the crackdown is having such an immediate effect on everything from sports sponsorships to day-to-day business transactions.
The crack-down follows the announcement of the acquisition of Ladbrokes Coral by online gambling operator GVC Holdings, which is based in the Isle of Man. British MP’s have not yet come to a final conclusion as to by exactly how much maximum bets should be curbed, but the general indication seems to be that it could be cut down to as little £2 on every £100, which will of course have an astronomical impact on retail business income for all involved.
A Ripple Effect
Ladbrokes Coral, specifically, having done the projections of what a change such as this may bring about in general income terms, have predicted that this could potentially bring about millions of pounds in losses. In the event that the motion does go forward and is put into practice, the company may very well be forced to make further cuts, and not limited to sports sponsorships.
Horse racing, especially, is an integral part of British bookmaking culture and as such, the company intends to focus on limiting cuts to this particular avenue.
However, should the significant bet cuts proceed, the impact will be far-reaching, affecting much more than just horse racing. The Association of British Bookmakers has issued a stern warning that a £2 cut to every £100 bet placed could result in as many as 4,500 betting shops across the country closing its doors for business, which will in turn, bring about many negative ramifications for the country’s economy.
Besides job losses and the like, the closure of such a large number of betting shops would have an enormous impact on media rights in the horse racing industry. This ultimately means that the horse racing industry could face up to £300m in losses as a result of a lack of media exposure.