The Cheltenham Festival is one of the most popular race meetings on the National Hunt calendar. Not only do the best and the brightest of the jump racing world descend on Gloucestershire for the duration of the Festival, but so do tens of thousands of racegoers. They are people that drink in the local pubs and eat in the local restaurants.
That is money that is poured into the local economy in its millions, helping the region in immeasurable ways. It’s not just the local economy that benefits from the racing, though. The wider economy of the United Kingdom also earns money from Cheltenham Festival, largely through the amount of money wagered on horses in the races.
The Local Economy
Cheltenham is known as the Festival Town, not just because of the horse racing meeting but also because of the Jazz Festival and Literary Festival that it plays host to throughout the year. The Regency town welcomes millions of people throughout the course of the year thanks to its association with the various events, with restaurants, hotels and bars benefitting.
It’s not just British and Irish people who head to Cheltenham, either. Oversea visitors have risen by a large degree, with the growth being faster than those from within the United Kingdom. The combination means that Cheltenham’s various Festivals are worth more than £160 million to the local economy. How much of that comes from the horse racing?
The Cheltenham Festival is considered by most people within the industry to be the pinnacle of jump racing, with only the Grand National rivalling it in terms of the number of people who watch it live and on television. It’s why more than £20 million is brought in through the sale of tickets, hospitality packages and sponsorship, whilst more than £4 million is offered in prizes.
That points to the horse racing earning around £100 million to the local Gloucestershire economy, which is easily the majority of the overall amount earned by the Festivals. With around 65,000 people attending the meeting each day, with most of them spending money in the local shops, pubs and restaurants. It’s for that reason that preparation starts in the Autumn.
Money Goes Back Into Racing
Whilst there’s no question that the Cheltenham Festival is a big money maker for the town and for the rest of the region, it’s also a hugely important one to horse racing in general. Ian Renton, the Managing Director of the course, is quick to point out that they Jockey Club, which owns Cheltenham Racecourse, reinvests all of the money earned back into the sport.
“Cheltenham contributes a significant proportion of our total revenues for the year – it is very important for us to be able to put this money back into racing”,
said Renton. It is the second-largest racing event in the United Kingdom after Royal Ascot, but Ascot also lasts for a day longer than the Cheltenham Festival.
The money being reinvested into the sport is owing to the fact that the Jockey Club is governed by Royal Charter. The Royal Family, of course, have a close relationship with horse racing and are keen for the sport to be developed as much as possible. Part of that reinvestment included the revamp of the course, which cost around £45 million thanks to the building of the new grandstand.
That is also money that goes back into the local economy thanks to employment of local builders, day traders and so on. The improvement also saw an increase in the money earned from hospitality, which increased from around £4.7 million to closer to £9 million. The £100 million that the local economy gets doesn’t even include money earned by the course, either.
On top of that, there’s also the money that the racing industry gets from bookmakers. Gambling businesses that take bets from UK-based customers can earn £500,000 without needing to pay anything, then from that point on they have to pay 10% of their gross profits back into the sport and the equine industry thanks to the Horserace Betting Levy.
How Much Does Cheltenham Contribute Overall?
British horse racing as a whole sees more than £1 billion spent on it each year, thanks in no small part to the 5 million plus people who attend race meetings. That is the amount spent directly on horse racing, but if you include the indirect amount spent the figure goes up to closer to £3.5 billion, with £275 million being given back in tax.
The Cheltenham Festival is ‘one of the most lucrative weeks in domestic sport’. Horse racing is now the United Kingdom’s second-most popular sport after football, which is why it is such an important one to the country’s overall economy. It is unquestionably the amount of money spent by bettors on the racing that contributes the most to the economy, though.
Whether it be serious betting experts or just casual punters, pretty much everyone with a betting account has a flutter on the races when Cheltenham Festival week rolls around. The meeting attracts more than £6 million in bets, both at the course, at the bookmakers and online.
Of course, that £100 million plus that goes into the local economy is also money that benefits the British economy as a whole. The restauranteurs, bar owners and hoteliers will be quick to spend that money themselves, whether that be in improving their own venues or in visiting different places away from the local area and spending their money there.
It’s also worth noting that the money made from Cheltenham has increased year-on-year. Back in 2012, for example, it was only worth about £50 million to the local economy, which is a large increase. It’s difficult to assess the true impact of the event to the British economy because of the fact that it’s about more than just the one-off event.
Horse racing in general contributes a huge amount to the economy of the United Kingdom. Whether it be breeding, training or taking part in races, there are vast numbers of people that are employed simply because racing exists. How many of those people would be unemployed or in lower paying jobs if the Cheltenham Festival didn’t exist is an impossible question to answer.