No-deal Brexit is a racing certainty, but Flutter still sees risk




What would persuade buyers that a no-deal Brexit comes at a value? Shortages on the retailers? Probably not, and by no means susceptible to happen — assuming leisure of import controls and continued improvement to veganism. Higher prices on the extreme avenue? Probably not, each — assuming zero import tariffs, and foreign exchange already pricing no-deal in. Shortages and shorter prices on the high-street bookies? Quite presumably, certain, and this would possibly really happen — assuming equine export controls and a rise in favoritism.

According to the boss of Flutter, which owns bookmakers Paddy Power and Betfair, fewer horses at race conferences is a precise risk beneath a no-deal exit from the EU, as a result of transporting them between Ireland, France and UK will develop to be tougher. And, in step with an analyst at vendor Shore Capital, fewer horses would indicate smaller fields and subsequently shorter-priced favorites.

For Flutter, which attracts additional racing punters than its rivals, that may theoretically trim margins, but would seem to have little impression on its enterprise as a full: last week, it maintained its full-year earnings steering. For horseracing commerce, it may not have a direct financial impression, each: this week, its governing physique expressed confidence in avoiding Brexit disruption.

So, is this Project Fear off to the races? It depends on whether or not or not you take into account Flutter’s Peter Jackson, who prices a no-deal Brexit at 5/4 due to the parliamentary clock ticks down, or the sort of optimist who still prices it at “a million to one”. And whereas some have “had enough of experts”, Lombard has found one throughout the racing commerce who suggests Mr. Jackson has a stage.

Imports of horses to the UK from Ireland and France will not be affected by a no-deal Brexit, as a result of the UK is replicating current strategies. However, the problem is transporting horses once more — and there are 26,000 of these border crossings a yr for racing and breeding capabilities. They are in the meantime permitted without checks beneath a “Tripartite Agreement” between the nations. That turns into invalid in a no-deal Brexit, though, as a result of it operates as a derogation to EU pointers. According to the Department for Environment, Food & Rural Affairs: “You will only be able to continue exporting equines from the UK to the EU in a no-deal Brexit if the EU lists the UK as a third country.”

Earlier this yr, the EU voted to do this — itemizing the UK as a third nation for animal effectively functioning throughout the highest class “A”. But it ought to vote as soon as extra throughout the event of no-deal, and even a class “A” designation would impose new border checks — which Ireland can facilitate in solely 4 locations and Northern Ireland in none. Unless a specific designation is granted, then, many owners are susceptible to steer clear of the extra time, value and animal welfare risks involved. So the Irish and French would possibly maintain away, and interbreeding decline. Certain voters might like that affiliation for people, but a lot much less so for his or her Aintree and Ascot runners.

matthew.vincent@ft.com




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