Adapting to Changing Environment

1. Adapting to Changing Environment Francesco Ruffo Scaletta Delegated Director ASSI - Temporary Management General Assembly & 46th International Conference IFHA - Paris, 8 October 2012

2. 1 Gambling market in Italy • .....The opening-up of the market to sports betting and other kinds of gambling (Superenalotto, scratchcards, and subsequently slot machines and Video lotteries) caused an unstoppable decline in revenues from horseracing and led to the resultant grave economic and financial crisis in the entire Italian horse racing system due to the progressive reduction in funds for the industry. In 2011, slot machines and video lotteries accounted for more than 56% of the entire market revenue, while horse racing bets were just under 2% of total recorded revenue (Table 1 and Picture 1)....

3. Table 1 - 2011 Gambling market in Italy (Source: AAMS, 2012, except for Horse betting)

4. Picture 1 - 2011 Gambling market in Italy

5. 2 Commercial transformation of gambling • …..In view of the process of converting betting shops into "mini casinos", the figures on New Slot and VLT revenues, which have been instituted in the horseracing betting shops and agencies, have taken on a particular significance since 2004 (Table 2)….

6. Table 2 - Slot Machines, VLT and Horse Betting

7. 3 Sporting, employees, stud-books • …..Under this new system, the commitment will continue to safeguard the great sporting (Tables 3.1 and 3.2) and agricultural heritage of the Italian horseracing industry, whose social and economic importance can be gauged from the estimated 50,000 employees in the sector. In addition to this figure there are also the supply chain activities (ranging from professional to craft activities, feed production, transporting horses, treating horses, manufacturing harnesses, accessories etc.), employing an estimated 20,000 people (Table 4). The number of horses on the stud-books kept by ASSI total 294,207, which is 45,46% of Italy's national horse population of 647,200 units (Table 5).

8. Table 3.1 - 2011 Horseracing Activity

9. Table 3.2 - 2011 Horseracing Activity *Some racecourses are counted twice as they dispute both trotting and gallop races.** Betting online represents the 5.00% of total horseracing betting and 0.007% of total Italian online betting.

10. Table 4 – Employees in the horseracing system

11. Table 5 – Italy’s horse population

12. 4 Land, horse breeding and horse feed • About 610,000 ha of land (Table 6) are dedicated to horse breeding and the production of horse feed, of which over 280,000 ha are used directly for breeding. To appreciate the magnitude of this phenomenon and its importance to Italian agriculture one only has to compare these figures with (Picture 2), for example, the hectares dedicated to olive groves (1,191,000 ha), vineyards (777,000), orchards (437,000 ha) or tomatoes (113,000 ha)…..

13. Table 6 – Some comparative data (hectares)

14. Picture 2 - Some comparative data

15. 5 The Italian breeding • …..The high levels of horse breeding excellence attained in these years has been the result of a widespread commitment, despite the difficult economic situation, to implement comprehensive multi-year programmes to support horse breeding which, in addition to the investments made by individual operators, have made it possible to enhance the quality and increase the quantity of Italy's horse breeding output (Table 7)…..

16. Table 7 - 2011 Italian Breeding* * Provisional data.

17. 6 Horseracing betting and deductions • The comparison with some European countries shows that the system of deductions, and in particular the percentages of deductions, is different from each other (Table 8).

18. Table 8. Horseracing betting and deductions in some European countries in 2011(Source: IFHA, 2012)

19. THANKS FOR YOUR ATTENTION ! f.ruffo@unire.it