Horse Racing Comes to a Halt... 1.1 Trillion Won in Sales Lost Due to COVID-19

[Sejong=Asia Economy Reporter Kim Hyunjung] The Korea Racing Authority (KRA) is facing a deficit crisis due to the impact of the novel coronavirus infection (COVID-19). The closure in March alone caused a loss of 800 billion won in sales, and the opening status for next month remains uncertain.

According to the KRA on the 21st, the suspension period of horse racing operations, which has been ongoing since the 23rd of last month due to the COVID-19 situation, will be extended until the 9th of next month. Initially, the closure was scheduled only until the 26th of this month, but as the spread of COVID-19 continues, additional suspension became inevitable. The estimated sales loss due to this amounts to 1.1 trillion won.

The KRA is operating an emergency management committee to respond to the COVID-19 crisis. According to the KRA’s horse industry status survey (February 2019), the economic output scale of the horse industry reaches 3.4125 trillion won and creates about 25,000 jobs. The horse racing industry accounts for nearly 90% of the total output scale of the horse industry, serving as a hub for the development of the horse industry. While establishing countermeasures for the management crisis caused by the decline in horse racing sales, the KRA has prepared all support measures for partner companies, lessors, and related workers to revive the entire horse industry, including horse racing.

The unprecedented long-term closure has put pressure on the KRA’s management and on jockeys, trainers, and grooms whose main income is horse racing prize money. There are about 1,110 horse racing stakeholders who rely primarily on horse racing prize money. When horse racing is conducted normally, an average of about 20 billion won in prize money is generated monthly, but due to the suspension, they cannot receive prize money and must worry about their income. Approximately 5,000 workers who work on race days are also on leave and receiving leave allowances. Race day security and sanitation workers are working in shifts due to reduced workloads, receiving about 30% less monthly salary compared to months when horse racing was operating normally.

Horse breeding farms, which were filled with anticipation ahead of the racehorse auction season, are also deeply concerned as the auction scheduled for early March has been indefinitely postponed due to the suspension of horse racing. With expectations for the KRA’s preferential policy for auctioned racehorses, 168 horses?significantly more than last year’s 133?were scheduled to be listed in this auction. Assuming about 50% of the auctioned horses are sold and the average winning bid is around 40 million won, the breeding farms stand to lose about 3.5 billion won in sales.

In particular, the Korea Racehorse Breeders Association, which made bold investments to produce excellent domestic horses, including the high-priced import of the stallion ‘Overanalyze’ from the United States this year, is reported to have suffered losses of about 500 million won solely due to the cancellation of the March auction.

The KRA has taken emergency support measures. First, it has prepared a plan to lend funds interest-free up to 20 billion won to jockeys, trainers, and grooms, whose main income is horse racing prize money, to ensure they do not face livelihood difficulties. Participating in the Good Landlord Movement, the KRA has also decided not to charge rent to businesses operating within its facilities during the horse racing suspension period and to extend their lease contracts by the duration of the suspension.

This content was produced with the assistance of AI translation services.