The Cheltenham Festival is one of the world’s largest events of horseracing, and probably the second most important event of this nature in the UK after Royal Ascot by gathering more than 250,000 attendees generating a total of $23 million USD in revenue for the Irish population alone. The main event is the Cheltenham Gold Cup that will see some of the top horses of the UK and some foreign take part in the traditional jump races, which are so popular in Ireland – you can also click here to see all Cheltenham festival results from the past and the current top horses and jockeys for more information about this popular racing event.
Amongst this 4-day festival more than 220 bookies fight for a piece of the pie worth $430 million in betting alone, with a growing number of sports bettors both on the local scene and online from all around the world. Africans are a growing population in the online betting world, mostly in the international football arena.
Cheltenham Gold Cup Dispute
It takes place on the fourth and final day of the Cheltenham Festival that will be held this year on 17th March. Considered the best race of the National Hunt calendar, the race is the climax of four days of million Dollar races where Irish and international fans gather to watch as top horses tackle 22 fences over a 3-mile course. The horses require fluency in their jump and potent stamina to end on the podium.
This year the bookies find themselves in the middle of a dispute with the BHA (British Horse Racing Authority), government scrutiny over its practices and dealing with the impact of two major takeover deals.
250 thousand bettors are expected to place bets during the event, but the largest bookmakers are not responding with the interest that they normally do.
Ladbrokes, which is merging with Coral in a move to create UK’s biggest retail bookmaker, has refused to open its on track betting shops at the festival after losing the World Hurdle Sponsorship.
For the first time ever the Gold Cup, the festival’s main event, will not be sponsored by a bookmaker ever since 1980, after disagreement with the BHA over betting proceeds.
And the reason for the dispute?
The BHA entity that regulates all horseracing events in the UK, introduced a new system of “authorized betting partners” that encourages online sport books to pay an additional 7% to 8% fee on their online profits, which carry lower charges than bets made online.
Bookmakers that take on the deal can sponsor races, help set the fixture list and gain media rights to stream races online for its customer base, a key factor for live sport bettors.
The advantage of online betting vs physical racetrack betting is the in affection of local tax laws since most online racebooks find themselves located overseas, take for example UK foreign jurisdictions like Gibraltar. In this case companies have the option to take on a hire charge for special media treatment, which sounds like a fair one, the problem is big companies like Betfred who usually sponsor the Gold Cup, are now surprised with a millionaire fee if they wish to continue offering online streaming and sponsoring.
Ladbrokes, Coral and William Hill made an offer to pay 5% of online profits, but the BHA denied that option.
James Henderson, chief executive of William Hill said “There will have to be movement from the BHA”, as for now the betting industry will stand their ground in their decision of not levying more than they desire to sponsor high class events.
The Cheltenham Festival is an unfortunate time for these events, despite a decline in recent years but only if compared to the growth of football betting, horseracing is still the biggest betting sport in the UK accounting for 35% in 2015 of all betting in the country, according to Global Betting and Gaming Consultants.
Horserace betting generated $10.82 billion in 2016 and Cheltenham Festival has a big role to play in this figure.
So how much revenue are we talking about for the bookies?
A turnover of $430million is estimated for the entire betting industry from the Cheltenham Festival alone.
Simon Bazalgette, chief executive of the Jockey Club, who runs Cheltenham, says online betting profits could exceed shops (ground betting) for the first time in two years. “What it means is suddenly the whole sport is missing out on half the money it is owed. It also means the sport is being driven to support the shops but not the new channels where the growth is coming from, which is a bad position for any industry,” he says.