Economic and Social Contribution of Horseracing in Europe

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Economic and social contribution of horseracing in Europe

Bertrand BlinguierEQUUS 2009 - 29 October 2009

The Association

Non for profit association based in Brussels Created in June 2007 Membership: European Pari Mutuel Operators directly contributing to Racing 10 countries represented : Austria, Finland, France, Germany, Ireland, Italy, Norway, Sweden, Switzerland, UK 14 billion of bets collected by EPMA Members in 2008 1,5 billion went back to racing and horse industry

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MissionPromote Pari Mutuel betting on horseracing and its business model

Lobbying in Brussels and in various European jurisdictions EPMA White Paper 2008 How the Pari Mutuel works, its benefits and theimpact of funding for Racing EPMA study on the economic and social contribution of horseracing in Europe 2009 Our position:

Right for Member States to define a national betting legal framework Recognising the right of horseracing sport event organisers to get a fairreturn Promoting the horseracing sport by preserving integrity Implementing obligatory responsible gaming rules Coordination of Member States to fight illegal betting activities

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Objectives of EPMA study

The document builds on a joint research investment by McKinsey and EPMA members on the horse racing sector in Europe, to describe the economic flows in the industry and compare the funding of horse racing across countries. Building a comprehensive and rigorous fact base on the horse racing sector at the European level is a progressive and long term effort that will be repeated by EPMA on a yearly basis in order to support their ongoing dialogue with policy decision makers in Europe.

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European horse betting and horse racing industry a large and vivid sectorThe European horse racing industryThe European horse betting industry People 40 000 breeders Over 300 000 jobs1 of which 155 000 people directly employed Land 500 racecourses throughout Europe 4% of European agricultural land used to produce horse feed2 Events 80 000 horse races per year On average 18 horse races/hour (considering the period 12am to 12pm) Horses ~170 000 race horses >EUR 390m of race horses public sales4

20 million punters EUR 35 bn of bets >EUR 1.6 bn of taxespaid to governments3

1 Estimates based on horse betting turnover when no direct information is available 2 Estimates based on 22 European countries 3 Calculated on 12 European countries (including all EPMA members except Austria) 4 Based on sales of 9 main European agencies/auction houses SOURCE: EPMA; IFHA; UET; Ecus; PMU; 2009 updated information from Equus 2001; ATG

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The horse racing footprint on the European economy is significant, with EUR ~6 bn of economic impactApproach to estimate horseracing impact/ other equine contribution Horseracing impact on the economy includes: Betting operators' contribution: betting revenues excluding returns to punters and governments Race goers' contribution: expenses incurred by race goers during race days (admission fees + hospitality when data are available) Owners' contribution: net expenses to train horses and take part in races1 Other contributions: e.g., revenues injected for sponsoring (other players than betting operators), State subsidies Other equine impact includes: revenues generated by sport/leisure activity and other activities Perimeter: Estimates on 6 countries (France, Finland, Ireland, Norway, Sweden, and UK) Extrapolation on Europe: Horse acing impact: rationale based on horse betting market share of these 6 countries versus Europe Other equine contribution: rationale based on the average ratio equine contribution/horse racing contribution calculated for countries having disclosed these data EUR millions Key figures Estimates in EuropeHorse racing impact Other equine impact

11,820

3,950 1,880

Extrapolated other equine contributionTaxes paid by betting operators (EUR millions)

5,630

2,070

2,250 670 1,580 1,290

680 6106,190

840 550

400 440

530

220 330

2,410 1,520

330 200

890Total UK 250 France Ireland2 Sweden Finland Norway 1,120 0 130 10 15 Other

1 No reliable data to include capital investment to buy horses 2 Excluding contribution from stallion/broodmare breeding SOURCE: McKinsey analysis; EPMA data; public data

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The horse racing sector is closely linked with the equine sector and beyond, flows through the overall economyImpacted sectors Not exhaustiveHorse racing Horse racing Horse racing bodies racing associations, racecourses, horse racing schools, Horse racing professionals trainers, jockeys, drivers, oncourse workforce, employees of training centers Horse betting bodies2 Pari Mutuel betting operators, bookmakers, Professionals at the intersection horse racing/other equine Other equine

Total equine sector End users Specific stakeholder

Owners Breeders Stable staff Farriers Saddlers Veterinary officers Veterinary technicians

Equestrian Sport riding schools, federations

Leisure/other farms dedicated to horse tourism, organizers of riding tours, horse therapy centers,

Punters

Race goers

Riders

Indirect impacted employees/sectors1 insurance agents, caterers, broadcasters, carriers, contractors, journalists/photographers, auction houses, brokers, farmers providing fodder,

State1 Assuming 100% of their activity is not dedicated to horses/horse racing 2 Partially active outside the horse racing sector (in particular, bookmakers who generally offer bets on a wide range of sports)

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Horse racing employs directly and indirectly more than 300,000 people throughout EuropeKey A wide range of different jobs are related to horse racing selected examples of direct employees Breeders Equine veterinarians

Stable staff

Racecourses' employees

Overall horse racing employment represents

Trainers

Farriers

~310 000 direct and indirect jobs1 ~155 000 direct jobs1 ~2.4% of jobs in the agricultural sector2 ~1.8 direct and indirect employees/race horse3

Jockeys

Saddlers

Drivers

Employees of the horse betting sector

1 Estimates based on horse betting turnover when no direct information is available 2 Ratio on direct employment 3 Ratio on total employment (direct and indirect) SOURCE: EPMA; Global Insight; IFHA; UET

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In addition, horse racing contributes to the preservation and care of a vivid countrysideHorses contribute to countryside preservation Area needed to produce horse feed Million hectares Europe2 6.8 % of national agricultural land Percent 4 as well as to land settlement. Some European regions benefit tremendously from horse-related activities Basse Normandie (France) Region profile 1.5m inhabitants 17 589 km 1st French region for horse breeding Key facts on horse industry: 93 000 horses1 (~10% of French horse population) 44 different breeds1 EUR 620m of revenues generated by the equine sector1 9 200 employees in the horse sector (including 933 employees in horse racing associations)1 ~26% of the worth agricultural land dedicated to horses (area for farms, grazing, hay production)1 Well-known racecourses in Deauville and Cabourg Sizeable yearling sales in Deauville (EUR 26m) World equestrian games to be hosted in Caen in 2014 County Kildare (Ireland) Italy Sweden 0,5 0,3 0,1 0,1 0,1 4 10 5 6 1 4 Region profile 186 100 inhabitants 1 693 km2 Key facts on horse industry: 15% of Irish horse meetings 11% of Irish breeders and 23% of Irish trainers ~EUR 43m of impact on local economy and 2000 part-time jobs generated by Punchestown festival ~EUR 28m of fees paid for in-training horses

Iceland

France

0,9

3Denmark Ireland Netherlands U.K.

Sweden Finland Norway

Estonia Latvia Lithuania Russia

R.S.F.S.R.

Belarus Germany Belgium Luxembourg Czech Slovakia Moldova Austria France Switzerland Slovenia Croatia Bosnia Serbia Bulgaria Montenegro Turkey Sardinia Macedonia Hungary Romania Poland Ukraine

Portugal

Monaco Corsica Spain

Italy

Great Britain

0,9

5

Albania Greece Cyprus

Malta

FinlandNorway Ireland Other

3,8

1 2006 data 2 Calculated on 22 European countries SOURCE: Conseil des Chevaux de Basse Normandie; 2009 updated information from Equus 2001; Tote Ireland; Internet

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Horse racing also fosters social cohesion, Some races are events of national importance Example Elitloppet races in Sweden Horse betting attracts numerous and various punters Example Profile of French punters

One of the worlds largest trotting race Horses and drivers from 10 countries participated in 2009 race ~53 500 visitors ~EUR 28 m of revenues ~EUR 9 m1 of economic outcome for Stockholm ~EUR 1672 of average expenses for visitors attracting diversified spectators Breakdown by age Other 16% 55-64 17% 23% 23% 45-54 1 2007 figure 2 Expenses for tickets, hotel, food, and shopping (excluding betting) SOURCE: Elitloppet website; ATG; PMU report 35-44 Visitors 62% Tourists 25-34 21% 38% Breakdown by origin

In France, horse betting attracts numerous people ~6.5 million of punters ~600 000 punters/day with a diversified profile Breakdown by age 18-34 >49 25% 42% Men 33% 35-49 who are keen on betting in group 67% of punters began to bet through their relatives or friends who already bet >50% of punters bet in group 60% 40% Women Breakdown by gender

Stockholm inhabitants

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as well as social insertion, and embodies a truly European activityHorse racing is a vector of social insertionDedic

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