The future of Attheraces remains unclear after the interactive betting operation stopped broadcasting British racing at midnight on Monday.
The operation's companion betting Web site is still up and running, but many believe there is little value to the site without the TV broadcasts of racing to go along with it.
In the wake of the demise of Attheraces, which had hoped to changed the way betting was conducted throughout the UK and increase revenues for local tracks and horsemen, officials with the site credited the failure on the increasing popularity of betting exchanges, and the inability of punters to grasp the idea of betting through their remote control.
Keith Brown, a director of Attheraces, told the BBC on Monday night that the learning curve for both punters and Attheraces wound up dooming the operation.
"It took time to get the technology right," he said. "In the meantime the betting exchanges took off."
Attheraces officially went off the air Monday night after an agreement couldn't be reached between the consortium and the Racecourse Association to continue broadcasting races.
Under the original plan it was hoped that the Attheraces TV coverage could be used as a catalyst to drive punters to the Web site or betting on the races through Interactive T.V. Instead, Brown said, punters were racing the coverage and then betting with other operators.
"People were watching the ATR (Attheraces) channel and using betting exchanges and telephone betting to place their bets," he said. "Therefore ATR never really recouped the amount of betting they hoped to get in their original business plan."
Its television coverage was recently drawing about 650,000 viewers a week, but few of those translated into bettors on the interactive system. The channel had just more than 19,000 active customers in the first six months of 2003.
Attheraces had been servicing 49 of Britain's racecourses. It has said it plans to renegotiate separate TV rights deals with individual racecourses, but other broadcasters have also entered into the fray as rights for many tracks are back up on the block.
Attheraces started broadcasting British races in May 2002. On Tuesday The New & Improved betdirect.co.uk Banded Stakes, an afternoon race at little known Southwell, become the first British race not shown by Attheraces in nearly two years.
Punters are now left to resort to the old days, when the only other way they could watch racing action from all across Britain was by visiting their local betting shop.
Ladbrokes has stepped up to fill the void by offering live commentary over the phone, for 10p a minute.
The overall gross profit margin on Tote bets placed via the company fell below 20 percent in October, triggering a get-out clause included in the contract.
In the meantime Attheraces said it would continue to operate, although to many it will be a shadow of its original self. The company's betting service and its coverage of U.S. racing in the evenings will continue. The channel's U.S. coverage, broadcast at peak viewing time in the UK, generated 40 percent of the £13 million in betting turnover for the first six months of last year.
Attheraces is also trying to work out deals with the racecourses to get a rebate on some of the money it had already paid out to tracks as part of the 10-year deal. £95 million of £307 million deal was already paid, but both sides have said they are willing to reach a compromise.
Bookmakers like Ladbrokes realize the importance of having a broadcaster like Attheraces distributing the races to UK punters. Turnover is likely to dip in the aftermath of Attheraces folding, and betting exchanges like Betfair are also likely to see a hit on its business since Attheraces created the perfect scenario for in-run betting. Bets placed during a race account for nearly 10 percent of exchange business, according to industry insiders, a segment of the industry that will likely disappear without Attheraces, or a similar broadcasting, carrying racing program.
Greg Nichols, chief executive of the British Horseracing Board, said the loss of Attheraces would create an immediate void across the board for the racing industry.
"Attheraces has contributed to record levels of both betting turnover and attendances on British racecourses and the current boom in the general popularity of racing, and for that reason it is unfortunate to see it go off the air," he said.
While bookmakers like Ladbrokes are trying to fill the betting void, broadcasters are lining up to fill the programming void.
BSkyB and a group of independent racecourses seem most likely to pick up the pieces. The racecourses announced plans last week to set up a subscription-based channel of their own.
BSkyB, meanwhile, is reported to be keen to increase its involvement by broadcasting racing through Satellite Information Services, in which Ladbrokes and William Hill have large shareholdings.
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