French racing losing €15m per month under lockdown
French racing was able to continue in the country’s second national lockdown caused by novel coronavirus (Covid-19). However, France Galop pointed out that the closure of all non-essential shops had resulted in a significant downturn in amounts wagered on events.
After stakes rose 15% year-on-year in July and August, the first two months following the first lockdown, growth slowed to 10% in August, then just 1.2% in October, when restrictions were once again ramped up amid rising Covid-19 cases.
This forced 4,000 bars, restaurants and shops of the 13,000 that make up Pari-Mutuel Urbain’s (PMU) retail monopoly to close their doors until 1 December. As a result daily turnover is “severely affected”, France Galop said, down between 20% and 30%.
“Online, for its part, is accelerating its growth compared to previous weeks, which is very encouraging but without being able to compensate for most of the turnover lost across the [retail] network.”
This averages a loss of around €15m per month, the governing body said, and should lockdown extend into December, would result in the business posting a net loss for the year. This, in turn, would mean France Galop would be unable to revise funding allocations as planned.
However, around €185m has been distributed to the industry from France Galop – €10m above the budgeted €175m figure – with the bulk of this awarded as prizes for flat and jump racing, owner premiums or transportation allowances.
“Over 2020 as a whole, including the suspension of racing, allocations will have fallen by 25.6% compared to 2019,” France Galop said.
This backdrop meant that setting a budget was a “delicate” process, it continued, as it was very difficult to predict revenue from racing and betting on racing in the year ahead. However, France Galop did note that its experiences of 2020, and the type of measures adopted by governments, meant that it had a clearer idea of the disruption the sector could face, and the ensuring financial impact.
This may force it to temporarily withhold some planned funding in the coming year, it said. Efforts would also be undertaken to reduce costs further, having cut outgoings by around €14m in 2020 to date.
The update covering the second French lockdown follows France Galop announcing a four-year strategy to help racing recover from the Covid-19 disruption in October.
This will look to incentivise trainers to bring new horses into competition, as well as encouraging foreign owners and trainers to participate in the country’s racing events.