Evaluating key strategic factors impacting the socio economic growth and sustainability of race horse owners in KZN.

Abstract

The prestige of horse racing is enjoyed by many people in most countries in the world and the sport has historically become known as the “Sport of Kings”. In South Africa (SA) and in many other countries, the sport of horse racing has faced unparalleled competition which has resulted in a rapid decline of industry participants in particular race horse owners. Race horse owners are one of the pivotal players in the sport especially because they are a key source of funding for the horse racing industry. A decline in ownership leads to a decline in betting product which results in overall decline in revenue generated from gambling leading to a further decline in ownership. This perpetuating cycle could lead to the industry becoming unsustainable. This study aims to identify the key strategic factors impacting the socio-economic growth and sustainability of race horse owners in KZN. This statement is in itself paradoxical as the study presents evidence of a “decline” of horse ownership in KZN. In order to achieve these objectives, quantitative research methods were used to collect data. Primary data was sourced through quantitative analysis using a self-administered questionnaire distributed to horse owners in KZN using the QuestionPro survey software. Stratified random sampling was used to select the respondents to the self-administered questionnaire. The population comprised 1120 past and present owners. The sample size amounted to 267 participants of which 106 responded. Descriptive statistics were used to analyse the quantitative data. Secondary data was also obtained from company records, industry analysis and government publications. The main findings of the study indicate that prize money (stakes) paid to race horse owners when their horse wins or places in a race, is too low. One of the big constraints faced by owners is that stakes are not increasing in line with costs. In 2011, prize money covered only 46% of the cost of race horse ownership in SA (International Federation of Horse Racing, 2014). The horse racing industry in SA is a labour intensive industry, and this negative economic trend is unfortunate especially from a socio-economic perspective in a country with a high level of unemployment. The motivation behind the study is to identify ways of overcoming or mitigating the challenges that exist so as to positively impact the industry and the regional economy at large. Recommendations to achieve this include the promotion of syndicates as a form of ownership and a marketing strategy that focuses on innovation and technology.