10 - The peculiar economics of horse racing

Summary

HORSE RACING: A GLOBAL SPORT

Despite its much-referenced decline in the United State, horse racing remains a prominent sport in many regions of the world. It takes various forms, with thoroughbred racing and trotting (harness racing) being the most widely practised. This chapter deals mostly with thoroughbred racing, which features the highest-value horses, prize money and prestige. In 2018 countries staging the largest number of thoroughbred races included Australia (19,409), Japan (16,498), Great Britain (10,406), France (7,039) and Argentina (5,320) as well as the United States, which still offered 36,586 races despite the closure of many venues. Smaller jurisdictions with a high level of supply relative to their population sizes included Chile, Ireland, Hong Kong, Mauritius, New Zealand and the United Arab Emirates. In most of these countries, thoroughbred racing is entirely or overwhelmingly on the flat, although jumps races (over obstacles) account for roughly one-third of the programme in Great Britain and France and more than one-half in Ireland.

Horse racing, like motor racing, may be considered nearly everywhere as primarily a spectator sport, given that there is typically no underpinning recreational structure. And in many places it is an important spectator sport. In Mauritius, which has a population of barely more than 1 million, the Champ de Mars racecourse regularly draws crowds of more than 20,000. In Hong Kong, the 88 race days offered during the 2018/19 season attracted a total of 2.2 million spectators. In Great Britain, aggregate attendance at horse racing was 5.6 million in 2019, which was second only to football (and comfortably ahead of rugby and cricket). Irish racing reported 1.3 million admissions in the same year (from a population base of some 6.6 million).

Given the prominence and popularity of horse racing in many jurisdictions, it is surprising that the sport has attracted relatively little attention from academic economists, aside from the large number of papers on the efficiency of its associated betting markets. For example, Buraimo, Coster and Forrest (2021

) is, to my knowledge, the only horse racing attendance demand paper this century. And, except for studies related to betting, the Journal of Sports Economics, at least to the time of writing, has only ever published three papers on the sport, all related to the market for purchasing thoroughbreds.