The racehorse market - France

1.2 A fast-growing global market

Equine market:

According to theEquine Business Association, the global market size for the entire equine industry stood at *** billion USD in ****. The market is driven by Europe with **% market share (***).

Global equine industry market size World, ****, in billions of USD Source: ****

According to the same source, the market is expected to grow by *% every year to reach ***.* billion USD in ****.

Racehorse market :

In France, the racing industry's main source of revenue is horse betting, which accounts for over **% of the sector's sales. Assuming that this proportion is similar in other countries, observing the amount of horse betting worldwide provides a close approximation of the size of the global racehorse market.

Stakes have risen sharply in recent years. In fact, between **** and ****, the amount of sports bets evolved by +**%. In ****, the market is up *% on the previous year.

Amount of horse bets worldwide France, **** - ****, in billions of euros Source: ****

Japan bets the most, accounting for over a quarter of all betting amounts. Australia (***) complete the podium. France comes *th with *.*%.

Breakdown of horse betting stakes World, ****, in Source: ****

1.3 Domestic market

The racehorse industry is characterized by * main economic activities: breeding, trading, pensions and betting. The graph below shows the total market size (***) and each of the sales figures for the different activities making up the racehorse industry.

This market size for the racehorse industry stands at *.*** billion euros in ****, at the same level as the previous year.

Market size of the "racehorse" industry France, **** - ****, in millions of euros Source: ****

The following graph shows the breakdown of market size by activity. Horse betting is the most profitable activity, accounting for **.*% of the sector's sales. it should be noted, however, that of the *,*** billion in sales generated by horse betting, *,*** billion were returned to punters, i.e. **% of total bets. Breeding represents *.*% of the market size, trading (***) *.*% and pensions *.*%.

Breakdown of sales in the racehorse industry France, ****, in % of sales Source: ****

The following table shows in detail the breakdown of sales for each activity, in particular between galloping racehorses and trotters for breeding and trading activities.

Source: ****

1.4 A large trade surplus for racehorses

In all, *,*** equines were imported and **,*** exported in ****. The equine trade balance is therefore broadly positive, with a balance of +**,*** animals, i.e. a coverage rate (***) of *.**.

For racehorses, gallopers and trotters, there is also a large surplus:

For gallopers, which represent **% and **.*% respectively of total equine imports and exports, and with a coverage rate of *.**, below the equine average (***) For trotters, which represent only *.*% and **.*% respectively of total equine imports and exports, with a coverage rate of **.*, well above the equine average (***).

Equine imports and exports France, ****, in number of horses Source: ****

The main destination countries for French equidae, all categories combined, are Italy and Spain (***). Although these proposals do not concern racehorses alone, they do provide an overview of France's main trading partners.

The two most exported age categories for racehorses are *-* year olds and *-* year olds, for both gallopers and trotters.

Age categories of exported racehorses France, ****, in number of horses Source: ****

Imports of racehorses have tended to decline in recent years, particularly in ****, the year of the pandemic, when imports of gallopers fell by **.*%.

Evolution of racehorse imports France, ****, in number of horses Source: ****

Evolution of racing equine exports France, ****, in number of horses Source: ...

2.1 Demand for racehorses

The vast majority of horses (***). The category of horses purchased for racing use comes in a distant second, accounting for **% of transactions. However, *% of horse purchases are racehorses, but bought for sport-leisure-teaching use, bringing the number of racehorse exchanges to **%. A further *% of equidae are not intended for any purpose, and *% for work.

Breakdown of horse purchases by use France, ****, in Source: ****

On the other hand, among amateur buyers, the proportion of horses purchased for racing is much lower, representing just *% of equine purchases.

Demand for racehorses is tending to fall for trotters and to rise slightly for gallopers. In fact, between **** and ****, the number of trotter exchanges fell by **.*%, while for gallopers, the number of exchanges rose by *% over the same period.

Trend in the number of racehorse purchases: gallopers and trotters France, **** - ****, in number of equine purchases Source: ****

2.2 Profile of horses purchased

The majority (***).

Distribution of racehorse purchases by breed France, ****, in Source: ****

Horses intended for racing are bought on average at *.* years of age for gallopers, and *.* years for trotters. At least **% of gallopers and **% of trotters are purchased at the age of two or less. These purchases of very young horses can be explained by the fact that racehorses start racing from the age of *, and up to the age of ** in most cases. [***]

Two types of activity can be distinguished for racehorses prior to purchase:

Breeding, which accounts for **% of purchases, where horses are bought before their value is added **% of purchases are made from horses already racing

Breakdown of racehorses purchased by activity prior to purchase France, ****, in Source: ****

The vast majority of racehorses are purchased from breeders (***).

Distribution of racehorse purchases by previous owner France, ****, in Source: ****

2.3 Profile of racehorse buyers

Future buyers of racehorses have several ways of finding them. The main one is spotting at gatherings (***). Classified ads accounted for only *% of scouts. These proportions show the importance of the network in racehorse transactions.

Breakdown of racehorse purchases by search method France, ****, in Source: ****

More than * out of ** racehorses are not seen before purchase . In a quarter of purchases, future owners see the animal alone beforehand, and only **% are accompanied by a professional.

Pre-purchase trial France, ****, in Source: ****

The following two graphs show the distribution of racehorse buyers according to their status. Amateur owners (***) are the main buyers of racehorses. Next come breeders and professional owners. The "other" category includes managers of equestrian establishments, employees of racing stables, farriers, etc

Distribution of trotting racehorse players' statuses France, ****, in % Source: ****

Distribution of gallop racehorse players' statuses France, ****, in Source: ****

furthermore, racehorse buyers are used to this type of transaction. In fact, only *% of transactions are carried out by novice buyers (***).

**% of racehorse buyers consider their transactions risky (***). Only **% of buyers consider that they do not make risky purchases.

Risk-taking when buying a racehorse France, ****, in % IFCE -Horse industry outlook

2.4 Racing and betting: major determinants of demand

Horse betting is the racehorse industry's main financial resource (***). In fact, horse betting and associated racing are the two major determinants of the racehorse market.

Racing :

The total number of horse races has been stable overall in recent years (***) due to the cancellation of several races because of the health crisis linked to covid-**. In fact, only *** of the *** active racing companies were able to organize races in ****.

Number of horse races France, **** - ****, in number of races Source: ****

In ****, ***,*** horse races were organized worldwide. That year, France was the second-largest organizer of jump races (***).

Trotting races are the most frequent in France (***).

Distribution of races by discipline France, ****, in Source: ****

The following graph shows the evolution of the number of horses per discipline having raced between **** and ****. It can be seen that this number has fallen very slightly over this period (***)

Number of horses raced France, **** - ****, in number of horses Source: ****

Horse betting

The value of bets made by punters on horse racing in **** is *.*** billion euros. However, the health crisis and the cancellation of several races have led to a decrease in the amount wagered, which was *.*** billion in ****. Before the crisis, there was a slight decline in ...

3.1 Value chain

Below is a simplified value chain for the racehorse industry. Each link in this value chain is detailed in other parts of the study:

Breeding: see *.* Trading: see parts * and *.* Racing: see *.* and *.* Horse betting: see *.* and *.*

Source: ****

3.2 Production: racehorse breeding

The graph below shows the number of French breeders of mares covered by racehorses. The number of breeders is higher for trotting horses than for galloping horses. In both categories, the number of breeders will fall between **** and ****, by **% for trotter breeders and *% for galloper breeders.

Number of racehorse breeders France, **** - ****, in number of breeders Source: ****

it's worth noting that the breeding techniques used vary considerably from one breed to another. For gallop horses, it's almost exclusively "in hand", while for trotting horses, it's artificial insemination that predominates.

gallopers will increase by +*% between **** and ****

trotters

the trend in births is downward

Number of racehorse births France, **** - ****, in number of births Source: ****

France is the world's sixth-largest producer of Thoroughbred gallopers, a ranking dominated by the USA, Australia and Ireland. By contrast, France is the world's leading producer of trotters, ahead of the United States and Australia.

3.3 Horse racing

There are *** active racing companies in France. In ****, they organized *,*** "meetings" (***).

Geographical distribution of racecourses (***)

Source: ****

The two maps above show the distribution of racecourses (***). Normandy and Pays de la Loire together account for **% of racecourses. These two regions also organize the most meetings. it should be noted that Île-de-France, which has just * racecourses, is the third-largest race-organizing region. Normandy, Pays de la Loire and Île-de-France together account for **% of organized meetings.

Only * of the *** racecourses account for **% of the number of meetings organized in ****. These most active racecourses are listed in the table below:

Source: ****

Source: ****

3.4 Horse betting, a key industry activity

The main player in horse betting is the PMU (***): Betclic Enterprises Limited, France Pari, Genybet, Joabet, PMU, SPS Betting France Limited, Zeturf France Limited.

Racecourse betting accounted for just *.*% of value bets in ****. This proportion was impacted by the health crisis, which prevented the public from visiting racecourses for several months. In ****, *% of stakes came from racecourses.

The following chart shows the breakdown of horse betting:

Stakes distribution (***) France, ****, in Source: ****

**% of stakes are paid to punters, and **% are levies shared between several players: the state (***) such as France Galop and Trot.

Breakdown of horserace betting revenues France, ****, in Source: ****

Incentives:

The levies that accrue to racing institutes are largely used to finance the upstream industry, such as breeders and owners, in the form of "incentives".

For example, France Galop, the association that organizes and controls the gallop racing industry in France, and co-owns the PMU with the Trot, has a budget of *** million euros in ****, fed mainly by levies on horse betting. Of the operating budget of this non-profit association, ***.* million euros are paid out to owners, breeders, trainers and jockeys who win or are placed in gallop races organized in France. Encouragments are therefore largely financed by the ...

4.1 Adding value to racehorses

There are three ways of selling racehorses:

Auctions Claiming races Non-auction sales and claiming races

Horses are classified into * categories at sales:

Foal: thoroughbred colt less than a year old Yearling: thoroughbred foal in its second year Horses in training over * years old Mares and fillies (***) Broodmares, stallions and stallion shares: the stallion is represented in shares. A share entitles the holder to one or more services (***).

Auction sales

The average auction price for racehorses varies widely depending on whether they are trotters or gallopers. In ****, the average auction price for a trotter was **,*** euros, while that for a galloper was **,*** euros, more than three times higher than for a trotter.

Prices also vary by category. Among gallopers, yearlings fetch the highest prices (***).

These average prices are well above those of other sales channels (***) was ***,*** euros.

Average price of racehorses by category France, ****, in euros Source: ****

For trotters, *,*** sales of all categories will take place via auction in ****. For gallopers, the figure is *,***.

Claiming races

At certain races, known as "claiming races", it is possible to buy the horses that start the race. Before the race, the owner of the horse gives the amount for which his horse will be sold. ...

4.2 Supply trends

Soaring prices for gallopers at auction

As we saw in the previous section, the average sale price for galloping horses in all categories was **,*** euros, and **,*** euros for yearling gallopers (***). It's in this category that prices tend to soar, for "selection" yearlings, rigorously chosen for their origins and aptitudes, and considered as likely future racing elites. These very high prices for high-potential horses are not typical of the French market, but of the world market. The table below shows the average price of "selection" yearlings at the world's * most renowned auctions in ****.

Average prices reached ***,*** euros at France's leading auction in Deauville. At this event in ****, a female yearling bred by the Haras d'Étreham in Calvados sold for *.* million euros. In ****, again at Deauville, three yearlings were sold for more than a million euros (***). At the **** edition, an **-month-old English thoroughbred yearling went for *.* million euros.

Animal welfare

Animal welfare is a growing concern in society, and this theme is no exception in the high-level equine sector. In fact, according to industry players, there has been a real rise in awareness on this subject in recent years, accelerated by the pandemic and the hindsight it engendered. It's mainly the exhaustion ...

5. Horse betting regulations

Until ****, the PMU (***) was the only authorized operator for horse betting in France, either physically or virtually. in ****, however, Parliament passed Act no. ****-*** on the opening up to competition and regulation of the online gambling sector. This opening up of the market concerns only "the scope of games subject to opening up to competition is limited to games of chance, which also call on players' skills and present less risk of addiction.are less likely to be addictive than pure games of chance such as slot machines or other high-draw lottery games, for which maintaining the current system of exclusive rights is fully justified. These games, namely horse betting, sports betting and poker, are moreover the ones that are currently generating strong demand and significant unauthorized supply."[***]

This law liberalized online horse betting by opening it up to competition. However, this is not the case for online betting, which remains under the monopoly of the PMU and the racing companies for betting at racecourses during races. Indeed, at the time of the law's promulgation in ****, the French assembly considered that "the situation of the French market for so-called 'hard' games (***) is now satisfactory: demand is channeled through a controlled circuit ...

6. Segmentation

• PMU Pari Mutuel Urbain
• Betclic Group
• France Galop
• ARQANA
• Equidia
• Arquana
• Eqwin