23 November 2021
The France Galop Board of Directors met on Monday 22 November 2021. The meeting largely focused on budget forecasts for the remainder of the year and their impact on prizemoney, and on the preparation of the 2022 budget.
2021 result forecasts and update on prizemoney
In spite of the year 2021 marred once more by the context of a highly unfavourable environment, in particular at the beginning of the year when curfews were imposed several times, with lockdown in April and a gradual reopening of cafes and PMU betting shops from June onwards, as well as the introduction in August of the Covid pass that slowed the recovery, the PMU confirms a €740 million contribution to the industry in 2021 (initial budget of €805 million). Against this backdrop, France Galop expects a positive net result of €6m for this year.
In line with the commitments made by the members of the Board of Directors since the introduction of a deduction of prizemoney on 1 March, the full profit will be redistributed to those horses with prizemoney earnings still affected by the deduction. For the record, since 1 March there is still a 9% deduction on prizemoney in flat races worth more than €7,500 and jump races worth more than €8,000 to the winner.
At the end of the financial year, an envelope of €6 million should therefore be returned to the owners, breeders, trainers and jockeys. The redistribution will take place at the beginning of 2022. Thus, the total amount of prizemoney distributed in 2021 should be €248 million, compared with €258 million in 2019, a slight decrease of 4%.
This decrease is relatively moderate compared to the first five months of the year: due to the closure of 3,500 betting shops, PMU turnover was down on average by 15% compared to its normal level. The limited erosion of 2021 prizemoney is the result of the good resumption of betting activity since the reopening of the betting shops, as well as the constant efforts made by both the PMU and France Galop to reduce costs in order to be able to redistribute additional prizemoney at the end of the year.
Budget plan for 2022 and impact on prizemoney
The France Galop budget plan for 2022 was submitted during this Board meeting before it will be discussed at the next Committee meeting on 13 December and before being formally approved by a new governing board to be held the same day.
The submitted plan, which does not include any assumption of further business disruptions due to the pandemic, expects performance to significantly improve, due to:
- a net contribution of the PMU to the industry that will rise above the €800M mark for the first time since 2015 to €820M, up €60M compared to 2019, thanks to a return to growth in betting turnover in France, a sustained international expansion and a significant drop in PMU expenditures (-€40M compared to 2019).
- A very good control of France Galop expenditures and a gradual return to the levels of commercial revenue recorded in 2019 before the start of the pandemic.
With this in mind, France Galop directors have expressed their wish to significantly increase the prizemoney budget for 2022.
Hence, instead of a prizemoney budget of €258 million (in line with 2019), the Board of Directors proposed that the total budget offered in 2022 be set at €278 million. This level of prizemoney would mean a return to the equivalent level of 2017, as in 2018 France Galop had to implement a reduction in prizemoney. This budget represents an increase of €20M (+7.75% vs. 2019) and €30M (+12%) compared to 2021.