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The Business Of Horse Racing: Revenue Streams, Sponsorships, And Local Impact
Horse racing is one of the most lucrative sectors in the world, with the industry bringing in millions of dollars on an annual basis.
The sport has the power to support local areas by creating hundreds, and sometimes thousands, of jobs for those living in the region.
Whereas some of the biggest events are attended by hundreds of thousands of people, giving a boost to various sectors across the area.
The funding model in horse racing thrives on an ecosystem that ensures that the sport is able to fund itself. This is something that bettors are typically unaware of when they are making today’s horse racing picks.
But, how does the sport support itself, and why is it a safe business strategy to ensure long-term success? What is the economics of horse racing?
Economics Of Horse Racing: How Big Is The Racing Industry?
Horse racing is one of the most recognised industries across the world, with the sport returning millions on an annual basis.
In the U.S., the Equine Economic Impact Survey in 2023 found that racing contributed a staggering $177 billion to the U.S. economy.
In the same year, around $1.3 billion was offered in prize money for the runners involved in races. They wagered a staggering $11.6 billion on the action throughout the season.
Also, in the UK, racing is the second-most attended sport after soccer. And this is evident based on the money it brings in.
Annually, racing contributes a staggering £4 billion to the national economy in the country, and it provides around 85,000 jobs.
But the ecosystem linked with racing in the United Kingdom is one of the key reasons why it is as successful as it is in the modern day.
Horse Racing Ecosystem
The horse racing ecosystem is a complex web. It holds together the structure of the sport, with every part of the system playing a key role in the success of the sport.
The main cog in the long-term success of the ecosystem is the racecourses themselves. It serves as the home for some of the notable events on the calendar.
Ticket sales, hospitality, and sponsorships form an integral part of their revenue throughout the season. The biggest events on the calendar typically record massive profits for race days such as the Cheltenham Festival and Royal Ascot.
As well as racecourses, there is huge pressure on governing bodies to regulate the action on and off the track.
These will safeguard the future of the sport. Also, it will make sure that all matters surrounding the sport are done above board to ensure fairness is a top priority.
Gambling
Betting is one of the factors that go hand-in-hand with horse racing. However, it is also an essential part of the ecosystem that ensures the long-term future of the sport.
Unlike other sports, bets made on racing will see funds go back into the ecosystem to help the sport continue to grow.
Betting on courses has been hugely popular for those who regularly attend meetings throughout the season. However, the growth of the online sector has made it more seamless than ever to make selections on races from across the globe.
Ownership
Racehorse breeding is one of the most important factors that directly impact the long-term future of the sport. It is estimated by the Equine Business Association that the sector is worth a staggering $300 billion annually.
Opening a successful racehorse can bring in enormous returns. More so, if it wins some prestigious events like the Melbourne Cup or the Kentucky Derby.
A top-tier horse can earn millions of dollars in fees even after the end of its racing career. They offer long-term profits to their owners.
Breeding & Sales
Breeding is the part of the sport that many lifelong fans have a passion for. It is the method by which a future champion will be born.
Moreover, breeding operations such as Coolmore and Darley are as famous as some of the most recognised trainers in the world. Also, the high-quality stallions on offer ensure that the sector remains as lucrative as ever.
This is a big part of the economics of horse racing. Thoroughbred breeding is a worldwide business with countries like Ireland, the United States, Australia, and the United Kingdom playing on the front foot.
High-quality horses that are bred for racing are sold in auctions for millions of dollars. However, pedigree and bloodlines play a huge role in determining the price.
The selling of the racehorses is a very profitable business. Some of the highest prices that a horse has achieved in history are $10 million. Moreover, the potential for a racehorse to become a breeding stallion has a significant impact on the price.
Media Coverage
Nowadays, horse racing events can be found on television channels across the world. Some of the most important dates in the diary being picked up on mega-money deals by streaming giants.
NBC is the home of the Kentucky Derby in the United States, and record viewing figures saw the broadcaster agree to a new deal to show the race until at least 2032.
The latest deal means that NBC is now the longest-running media rights partner for the most famous race in North America. Moreover, it has shown the opening leg of the Triple Crown annually since 2001.
It Is A Global Phenomena Now
Horse racing is also thriving on terrestrial television in the United Kingdom. ITV is announcing a new deal that will see it show over 100 race day events throughout a calendar year until at least the end of 2030.
The economics of horse racing includes significant events in the diary such as the Cheltenham Festival, Royal Ascot, and the Grand National.
The latest television deals across the world indicate that horse racing is in an extremely strong position as we move toward 2026.
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