The announcement that the Maktoum brothers, rulers of Dubai, are reducing their presence in British racing has created an atmosphere of deep pessimism.
Those connected with the Maktoum circle were circumspect yesterday. Luca Cumani, a leading trainer for Sheikh Mohammed, said he hoped that the brothers' decision would 'act as a catalyst which will regenerate racing over the next 10 years'. But insiders say that these are brave words coming from a trainer whose stable has been cut from 190 to 85 horses in the last three years. Of those horses remaining, 35 belong to Sheikh Mohammed.
Punters were talking of winners and losers off the course. The winners in recent years, critics say, have been the Government, which has been raking in revenue in the form of betting tax, and the off-course betting industry, which has been making fat profits.
The losers, the racing industry says, have been the stable lads, who fear for their jobs, bloodstock breeders facing plummeting prices, and owners, who are now fixing their eyes on the better prize money abroad.
Prices at the yearling sales at Tattersalls earlier this week fell dramatically. It is widely believed that the non-attendance of the Maktoums for the first time in recent years was a key factor. William Leach, who runs Meddler stud in Kentford, near Newmarket, Suffolk, received pounds 8,600 for a yearling which he expected to fetch pounds 30,000.
Mr Leach is deeply concerned about the high level of VAT. From next year, owners abroad will be expected to pay 17.5 per cent VAT on top of British stud fees. This compares with a VAT rate of 2.5 per cent in Ireland and 5.5 per cent in France. 'The Government promised us a level playing field in Europe and they haven't delivered. There is a real danger that they will destroy a lucrative industry for Britain.'
The Maktoums who have invested hundreds of millions of pounds in British racing, have studiously avoided saying exactly what are their intentions. But racing insiders believe they plan to cut the number of horses they have in training - currently 1,000 - by at least a third and possibly more if conditions do not improve. Racing and betting combined count as one of the top ten British industries. Betting alone has an annual turnover of pounds 1.4bn.
Mr Leach fears owners like the Maktoums will take their stallions abroad. 'Newmarket has been an important centre for breeding since Charles II's time. It would be catastrophic if it was put under threat.'
Derek Price, an owner and breeder, is considering moving his business to France because of the attractive prize money on offer and the cheaper property prices. Even in a relatively minor race, the prize money would be about pounds 8,000 compared with pounds 1,500 here.
Many critics lay the blame for the crisis on the off-course betting industry. In Britain off-course betting generates pounds 39m for racing. In France, where betting is controlled by the government, the figure is pounds 120m.