The Paulick Report ran a story yesterday about the closing of 24 racetracks in France in a cost-cutting move.
However, perhaps the lede was buried because a whopping "231 racetracks hosted spectators in 2025"; to me a mind-boggling number.
For some conference or another back in the day, I was on a panel with someone from France's PMU, (which runs horse racing) and I later looked into it with fascination. The PMU was a near-perfect protectionist organization, and it was inexorably linked with the governing bodies, and central government. It was, in a way, what many hoped for in North America from an umbrella.
What it wasn't good for (both back in the day and now) was for consumers of the betting product. It took and continues to take about 27% out of the pools, paying back punters around 69% to 75% on wagers.
Particularly egregious, in France itself, rebates are outlawed. However, not for offshore participants who can get up to a 15% rebate on their action. The big boys are getting their money back, while the people onshore are SOL at massive high takeouts.
France and the PMU - before markets opened up around the world in 2010 to 2012 - drew about 10 billion Euros in wagering for horse racing. In 2025 that number had fallen to about 6 billion.
No matter how much you try and protect, or how much you use rebates for large bettors to keep the top line from cratering (raising takeout at least marginally on everyone else), revenues shrink.
Like in the US, sports betting's legalization in France has eaten into racing's market share. But again, it's a state-led protectionist hell hole for customers.
It is illegal for operators to payout more than 85% in any bet, resulting in -125 each side pricing. The house edge for a three game parlay is 39%, five game almost 56%.
Remarkably, (and again I don't have the foggiest what these people are doing but it's common in protectionist cultures), scratch off tickets and lotteries payout at over 70%, with scratch offs around 75%. This puts them in-line with the "smart states" like Massachusetts in regulating churn and encouraging play. Non-skill game scratch offs are priced near what an exacta is.
Despite the fact that many of us who bet sports or racing would immediately stop betting sports or racing at these prices, protectionism has its merits. Sports betting has grown to about 11 billion Euros per year in betting volume in France. This puts them at about $159 per capita, or about 300% less than the free market (for the most part) US and Canada, but it's a fair number at 2X the margins.
And yes, back in my old conference days I noted to my French colleague that I suspected the sport could not continue at this pricing in France as the world opened up. But alas, there it is. Sure they closed a few tracks, revenue is down, and handle is down, but quite honestly, French horse racing continues to roll along.
Protectionism is inefficient, it's sub-optimal; for us left brainers and business people it's utterly maddening. And most importantly, it's terrible for customers.
But, for awhile at least, it works. It just won't work forever.
Have a great Wednesday everyone.
