“[Horse racing] is obviously holding its own. It’s a difficult market obviously. It’s gone through a difficult patch, specifically with casinos and the likes of the Lotto. We continue to race over 400 times a year in South Africa, 364 times throughout the year, so it’s definitely a sport that continues to hold its own within South Africa,” Phumelela COO an group financial officer Andreas Heide told CNBC Africa.
Horse racing in South Africa can be traced back to 1797, and the three main horse racing events today are the Summer Cup, J&B Met and the Durban July.
Heide explained that the sport is however significantly expensive, and owners typically spend in the region of 800 to 900 million rand into the sport on an annual basis. The return that owners vie for is roughly 300 million a year. Based on the return, horse ownership can easily be seen as a loss-making hobby.
“The opportunity is on the betting side of the business. There are some attractive odds to those that would like to take a flutter on racing. I think the other element in racing is we’ve obviously diversified our business quite extensively into fixed odds as well,” Heide added.
“There are opportunities to bet not only on horse racing but on soccer, rugby and the like. We’ve even extended it to the likes of what we call numbers betting: it’s betting on the various results or Lottos around the world.”
According to Heide, number betting has particularly good odds, as just selecting four numbers can give one a seven to one shot, which is an attractive prospect for the player.
“There are a lot of industries as we know that are very difficult to make money in. This one is mainly about passion and love of the sport of horseracing, and definitely the most amazing creature in the world. Race horses fill people’s lives and it’s a lifestyle that is very difficult to put a price against,” said Tom Callaghan, CEO of Thoroughbred Breeders International.
Callaghan however explained that South Africa struggles to export its horses overseas due to a viral disease called African Horse Sickness (AHS), which means that much of the country’s industry operates within its own bubble.
“It takes us seven months to export horses, but when they do get overseas they win, and they win the big races. We compete on the world stage but in a very small percentage at the moment.”