The ARC to Reduce Prize Pools, Close 1,000 Shops

A horse at an ARC property.

The dip in the fixed amount for FOBTs terminals will occasion a few changes within bookmakers and specifically how much they contribute towards sporting events. The ARC has been the first company to break the news.

ARC Shrinks Racing Contributions in 2019

The Arena Racing Company (ARC) has said that it would be reducing the amount of contributions towards prizing money for horse racing events starting next year. As a result, the company will donate estimated 13% less than in 2018 for UK horse races.

The move is necessitated by the pending changes to the maximum bets permissible at Fixed-Odds Betting Terminals (FOBTs), which will see the maximum bet shrink down to £2 in April, 2019.

Originally, FOBTs weren’t to change their bet levels until October, but a wide government support and the resignation of a minister has prompted quicker actions.

In 2018, The ARC donated estimated £17.5 million that were contributed towards prizing money for horse racing events in the United Kingdom. This number is to now fall down to £15.3 million in February, 2019.

The company owns a number of prime racing venues in the country which hosts around 3,400 competitions every year. The cut will directly impact the majority of events across the portfolio, but rather evenly so as to avoid dropping the prize pools too low for competitors to participate.

The race horsing industry is preparing to re-position itself in anticipation of a massive betting shops shut-down. The ARC could see as many as 1,000 properties become defunct by the end of 2019, a direct result from the government’s decision to reduce the stakes.

Meanwhile, the United Kingdom is pushing towards a more strongly regulated industry, with the Advertisement Standard Authority (ASA) and UK Gambling Commission (UKGC) working to clamp down on illegal advertisement.

The Legal Pressure Mounts

Amid the tightening legal screws, the Remote Gaming Duty is also scheduled to raise to 21% from previously 15%, voted with the latest budget bill. The change will come into effect in October, 2019, when the FOBTs adjustment had to first take place.

The ARC Chief Executive Martin Cruddace remains aware of the needs of the industry and the calls for further investment. Mr. Cruddace did acknowledge that such reduction is a step back in the development in the industry, but one that was nevertheless necessary. He did cite FOBTs as one of the main reasons.

The well-publicised impact of betting shop closures on racecourses’ media rights income has already started to take effect, and will only increase in the months and years to come. – The ARC Executive Martin Cruddace

Still, Mr. Cruddace appeared to be supportive of the government’s ruling against FOBTs understanding the motivation to protect customers from gambling. Meanwhile, The ARC and the British Horseracing Authority (BHA) are trying to find alternative sources of revenue to help prizing pools continue to grow despite the dip in profits. The BHA is also in the process of reviewing whip sanctions.

Originally, The ARC was expected to add more funding in 2019 but the hurried FOBTs legislation caused a shift in planning. The company is preparing to again review its prizing strategy at the end of next year.


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