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ECONOMIC IMPACT OF ASCOT RACECOURSE DECEMBER 2014 CONTENTS Executive summary 4 Introduction 8 Ascot Racecourse’s position in British Racing 9 Facilities 12 Racecourse attendances 15 On-course expenditure generated by 18 Ascot Racecourse Racegoers – Off-course expenditure 20 Betting 22 Employment 24 Taxation 25 Media coverage 26 Environment and Community 28 Report preparation, methodology and limitations 30 Glossary of terms 30 Contact details 30 This report has been written in general terms and therefore cannot be relied upon to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this report. Neither Deloitte LLP nor Ascot Racecourse accepts a duty of care or liability for any loss occasioned to any person acting or refraining from actions as a result of any material in this report. Further details about the scope, limitations and use of this report are set out on page 30. © Deloitte LLP. All rights reserved Photography: Getty Front cover: Her Majesty The Queen receives the winner’s trophy from HRH The Duke of Edinburgh following Estimate’s win in the 2012 Queen’s Vase. The filly was to return the following year to win the Gold Cup. B ECONOMIC IMPACT OF ASCOT RACECOURSE C EXECUTIVE SUMMARY Report purpose and basis Ascot’s position in British Racing Macro factors – employment, The economic impact of Ascot Racecourse • In 2014 ascot staged 11 Group 1 races, taxation and off-course betting The racecourse has been assessed in terms of its contribution the pinnacle of Flat racing, a third of all to the national economy, also focusing those held in Britain. Five Ascot races are in Employment hosted six of the on the local and international aspects the world’s top 20 Group 1 races with the • The Racecourse employs c.100 full where information is available. The report QipCo Champion stakes being the highest and part-time staff, with a further 40+ top ten most concentrates on key economic metrics as rated race in the world. employed by the catering company well as social and cultural measures of the based there. valuable British Racecourse’s worth. • The Racecourse hosted six of the top ten most valuable British flat races – in • These permanent staff are supplemented Flat races in 2014. terms of prize money – in 2014. British by a larger number of temporary staff Champions Day provides the highest prize on racedays who work in a variety of QIPCO British Overview Ascot Racecourse key metrics 2013 money on a single day’s racing in Britain. different roles. up to c.4,500 casual raceday ascot fixtures provided £13.3m (12%) of the employees and caterers work at the Champions Day total £114.2m prize money in Britain in 2013. Racecourse during the busiest days of Total direct expenditure Royal Ascot. provides the highest generated by the racecourse • The top quality races and global appeal £138m of Royal Ascot regularly attract top prize money on a international horses, with over 640 non- Total attendance British trained horses running at the single day’s racing 573,000 meeting since 2006. – of which Royal ascot in Britain. 279,000 • Ascot’s £220 million redevelopment – the £65m+ frankel completes an unbeaten career in the 2012 Champion stakes single biggest investment ever in British in taxation over max. number of people Racing – took place between september the last five years employed on raceday Betting 2013 Expenditure £m Racing expenditure 2004 and June 2006, and cemented Ascot’s 4,650 • There is a significant appeal to betting on • Admissions and related income – represents reputation as having the finest facilities of racing from Ascot due to its quality and Racing 1 the total amounts paid by attendees in all any British racecourse. Racecourse’s tax competitive nature. As a result the gross Admissions and related income 2 32.2 racecourse enclosures, with an average of contribution win from Ascot races represents 3-4% of Raceday catering 2 22.8 £59, ranging from free admission to the • Aside from the redevelopment, the £14.5m the total from British racing from under 2% on-course betting 3 2.9 Grandstand offered at the first flat fixture Racecourse has continued in invest in top Taxation of all fixtures. Media, sponsorship and other commercial 8.1 in April/May (plus under 18s being free for class facilities for racegoers, horsemen and • The Racecourse generates tax through: off-course betting turnover Levy distributions 3.0 all fixtures), to £120 for entry to the Royal horses alike, with capital expenditure over on racing at Ascot – Employment taxes from the full-time/ Economic Impact Enclosure at Royal Ascot. the past six years totalling over £13m. £350m+ part-time and casual employees; • Ascot Racecourse is estimated to have Total Racing expenditure 69.0 generated £138m in direct on-course and • Raceday catering – the catering function at • In 2013 ascot attracted 573,000 attendees, Total prize money – Value added Tax which is charged on off-course expenditure in 2013. Non-racing expenditure 1.3 ascot is provided through a profit share 10% of the total 5.7m in British racing. £13.3m sales that are not recoverable by the partnership with sodexo. The £22.8m is Royal ascot, which accounted for 279,000 – as % of British racing final user – notably on admissions and Total Direct Racecourse Expenditure 70.3 the total amount paid by racegoers for all of these (rising to 286,000 in 2014), is the 12% catering sales; and on-course food and drink. best attended racing festival in Europe and Racecourse attendee off-course in the top three best attended ticketed Capital expenditure – Gross profits Tax (“GpT”) paid by expenditure 68.0 • On-course betting is made up of amounts annual British sporting events. (10 years to 2013) off-course bookmakers on the profits paid to the Racecourse by on-course £237m from off-course betting on racing at Total Expenditure 138.3 bookmakers and commission from tote • Whilst the five days of Royala scot attract ascot Racecourse. in 2013, it is estimated and on-course betting shop operations. on average nearly 57,000 per day, ascot’s that well over £300m was bet on Ascot £13.3m Note: 2013 unless otherwise indicated. other 13 flat fixtures drew average crowds Racecourse races, generating over £3m (12%) of the total Notes: s ource: see body of report. 1. Only the Racecourse facility fee for British Champions Day is • Media, sponsorship and other commercial of over 16,000 in 2013, and the seven Jump £114.2m prize in GPT. recorded – the main items being payments from Turf fixtures that were run averaged over 11,000. money in Britain 2. Includes VaT 3. Bookmakers’ badges, commission from tote and betting shops TV for the Racecourse’s media rights to • In total it is estimated that the Racecourse in 2013 source: management information and estimates permit bookmakers to show live coverage generated over £14m in taxation in 2013, of racing from the Racecourse, terrestrial and over £65m in the last five years. television rights from Channel 4 and a range of sponsorship packages by local and national companies. 4 EConomiC impaCT of asCoT RaCECouRsE 5 EXECUTIVE SUMMARY • The Levy is the primary mechanism by which value is transferred from the betting industry to the British Racing industry. The £3m reflects all amounts paid to the Racecourse originating from the Levy, the majority of which is a contribution to prize money and covers integrity related costs. Non-racing expenditure • Ascot uses its facilities extensively outside of racing and generated over £1m in non- racing revenue in 2013, with approximately 200 events booked in 2014. Amongst other events, the Racecourse will host the Red Bull Air Race, which attracted over 50,000 attendees in 2014, for the next two years. Racecourse off-course expenditure in 2013 Accommodation £8m 12% • The four key types of off-course expenditure £14m 21% Ascot will host the Red Bull Food and drink – transport, food & drink, accommodation and fashion related spend – generated an estimated total of £68m in 2013. Air Race for the next two £13m 19% Environmental considerations Transport years, having attracted over • Ascot takes a number of approaches to address environmental concerns and 48% Community investment £33m incorporates sustainable practices into all Fashion/beauty • Ascot Racecourse is a major contributor 50,000 attendees in 2014. its operations. – economically, socially and culturally – to the local area. The Property Raceday raised • In 2013, total recycled waste was 547 £180,000 for children’s charities in 2014 tonnes, a recycling rate of 61%, with waste and over £1m since its inception. Ascot To tal: £68m volume being reduced by 9% on 2012. also contributes to the local community by ascot maintains a zero landfill operation a number of different means. source: ascot Racecourse, Deloitte with all general waste being collected by a recovery facility which converts it into energy. Racecourse attendees’ off-course expenditure • Rainwater falling onto the Grandstand is • Many attendees of the racecourse also collected and transferred by pipes and Up to c.4,500 casual raceday employees incur significant off-course expenditure ditches to fill the reservoir in the centre of through use of public and local transport, the course. This in turn is used to water and caterers work at the Racecourse visiting the numerous pubs, cafes and the course, meaning irrigation is largely restaurants in the area or staying overnight, self-sufficient. during the busiest days of Royal Ascot, often locally, as part of a trip to Ascot.