France Galop cautiously optimistic of racing's recovery

25 August 2020

France Galop, the governing body for the country’s flat and steeplechase racing sector, says that while proceeds from betting on racing will be down year-on-year, it has been encouraged by growth in the sector from June onwards.

This growth, it noted, had prompted horse race betting operator Pari-Mutuel Urbain (PMU), which France Galop co-owns alongside harness racing organiser Le Trot, to raise its full-year profit forecasts.

As of 16 August, France Galop said, stakes were down almost €1bn (£902.6m/$1.18bn) from 2019 - a decline of around 22% - with gross gaming revenue €335m behind the prior year. This was down to the suspension of French racing, which shut down from 17 March, and did not resume until 11 May as a result of novel coronavirus (Covid-19).

However, from 1 June, the sector had enjoyed something of a turnaround. For every week since, staking surpassed 2019 levels, and beat forecasts set by PMU in April.

As a result the operator has raised its projected net profit for 2020 to €640m. While this is €120m behind its pre-pandemic forecasts for the year, it represents an €182m improvement from its updated projections from April.

In related news, France Galop will look at raising the prizes and bonuses to be distributed to owners, trainers, breeders and regional racetracks. With many struggling financially as a result of the Covid-19 disruption, there are plans underway to increase the €187m set to be distributed to the sector.

This sum represents a 27% decline on the prizes and bonuses distributed in 2019, but is also €6m above the pool set aside for this purpose by France Galop prior to the resumption of racing.

While the France Galop board unanimously agreed to look at making more money available, this will only be done retrospectively and subject to a number of conditions. First, PMU will have to present a budget for 2021 that allows distributions to return to 2019 levels of €256m, while still remaining in the black.

France Galop, meanwhile, must be able to turn a profit for 2020, which in turn means that PMU must achieve its revised profit target of €640m.

The decision to raise money retrospectively was down to the “extremely volatile” nature of horse racing betting activity amid the ongoing pandemic, the governing body explained.

“Revenue forecasts remain very fragile as long as the virus is actively circulating, which has prompted directors to be cautious,” France Galop said. “Indeed, the slightest disruption of activity can very quickly result in a loss of several millions.”

The board will also look to provide tailored support for regional racetrack operators, looking to tackle the specific issues they face, which will be coordinated by the racecourse association Fédération Nationale des Courses Hippiques. This body will meet on 15 October to discuss actions to be taken.