The Big Question: Is the Grand National being hit by the recession, and should racing change?

Why are we asking this now?

Because tomorrow brings us the stirring sound of hooves on grass and the thunder of the crowd as 40 runners and riders race over four miles and four furlongs and 31 fences of the Aintree racecourse in the eagerly awaited 2009 Grand National.

First held in 1839, and known as the "People's Race", the National has a place in the nation's affections like no other horse race, bringing us such indelible sporting moments as Devon Loch's fateful falter within yards of the finishing post in 1956, Foinavon's 100-1 win in 1967, Red Rum's three triumphs in the 1970s, and Bob Champion beating cancer to triumph on Aldaniti in 1981. More infamously there was the "non" National raced in 1993 when half the field went off too soon. The race is also the biggest betting day of the year – but it comes against a backdrop of increasing pressure on the sport as a result of the economic downturn.

So is the future of the Grand National under threat?

In the short term it clearly is not. All the tickets are sold out except for steeplechase enclosure priced at £17. As a spokesman for Aintree, Andy Clifton, pointed out, "No one is going to turn down the chance to go to the biggest racing event in the calendar".

But horseracing is a luxury pursuit and, as such, it feels the effects of economic contraction in other ways. Widespread fears about the recession damaging Cheltenham festival last month were abated by better than expected spectator numbers. But smaller racecourses, along with bookmakers and breeders, have been dramatically affected as punters choose to hold on to their cash. In February, David Thorpe, the chair of the Racecourse Association, said that sponsorship would drop by "40 per cent" in 2009, and there is some evidence that his prediction is being borne out.

What is the evidence that horseracing is under pressure?

The economics of English racing are further effected by the global success of the sport. Most of the big money is international, travelling from event to event in the United States, Dubai, the United Kingdom and Ireland. So when one nation suffers, so do all the others. In the last few months Ireland has been hit particularly hard. In 2008, the Irish horseracing industry actually shrank for the first time in 15 years with inevitable consequences for the share price of Irish bookmakers like Paddy Power.

Why are bookmakers so vital to racing?

Bookmakers currently give around 10 per cent of their profits on horse racing bets to the racing industry through an organisation called the Horserace Betting Levy Board which provides a little more than 50 per cent of the total race prize money in every calendar year – about £120m. Obviously, when bookies takings are down, that commensurately effects prize money, which affects the amount earned by owners, who in turn reduce the amount they can afford to pay breeders and trainers. So the effects really are felt across the sport. What's more, the turf-accountants, under pressure from their own share-holders, have sought to cut their contribution in the last few years.

Are bookmakers really in trouble?

It's true that some, like Paddy Power, have had better years. But while William Hill, for example, reported a decline in operating profit of £269m in its most recent results, its revenue grew in the first two months of the year by nine per cent. Generally the results of the biggest players remain pretty buoyant. Other bookmakers such as the online betting firm Victor Chandler have succeeded in diversifying in order to sustain their income. Racing, for example, accounted for more than 90 per cent of Chandler's business 10 years ago – now it is just 30 per cent. Betting on other sports, especially football, has taken off.

What effect is this having on racing?

Well, for the big races, very little effect. Last month's Cheltenham meeting was able to offer a record total prize money of £3.56m over 26 races, but the going is not all good. The Epsom Oaks meeting and even June's Epsom Derby still have no headline sponsors after Vodafone withdrew their support. The news is not all bleak though. "The secret has been to diversify and find supporters from areas we perhaps have not always looked to," explains Nigel Payne, Chair of the Horse Racing Sponsors Association, "I was expecting there to be masses of dropouts. Exeter races are now sponsored by Burts Chips, Doncaster by DFS – sponsors from a broader base than usual. We've had to forget the banks and the construction industry and think laterally." Indeed they are. This year's Grand National's major sponsors include John Smith's – as Payne says, "Beer and racing make very sound bedfellows" – but also the discount clothes retailer Matalan, who are new to horseracing.

Have all the banks quit racing?

These traditional sponsors are still on the scene thanks to the error-prone Royal Bank of Scotland. Having been bailed out by taxpayers after it announced the biggest yearly loss in UK corporate history in February, RBS may actually end up running the track at Great Leighs. Last month, administrators Deloitte confirmed it has approached RBS as the lead creditor to see whether it could take ownership. The co-owners went into administration in January, less than two years after the £40m racecourse opened.

What is the racing industry doing to ensure its future?

Horseracing is the UK's second most popular sport, but the British Horseracing Authority (BHA) is doing all it can to keep attendance high, "No sport is recession proof," says BHA spokesman Jon Ryan, "and across the board we have seen a drop in hospitality use of around 10 per cent. However, we've worked hard to improve the reputation of racing, and are now involved in a re-branding campaign which will launch later this year to sell the sport to a wider audience."

Has the downturn helped racing in any way?

Some would argue it has, having criticised for years the over-production of foals by commercial breeders, leading to a glut of young commercial stallions who had not proved their merit in the marketplace. Breeders and trainers alike have experienced a decline in the bloodstock market – particularly in the US where last month's OBS sale in Ocala, Florida – the largest select auction of two-year-olds in the northern hemisphere – suggested that the market has dropped by as much as 30 per cent since 2008. While figures like this may hurt the wallets of the billionaires at the top of the sport, they are unlikely to cost the casual punter any entertainment. Money does not make a horse run any faster.

So who's going to win tomorrow?

Two horses are the focus of most punters' attention. Ruby Walsh, the reigning Irish National Hunt champion jockey, who has won the Grand National three times, is riding the favourite My Will, while Tony McCoy, who is desperate to win his first National, rides Butler's Cabin. Meanwhile, there are some who, remembering the National's reputation for upsets, suggest that Cerium, at 600-1, might be the credit-crunch punter's stallion of choice. After all, a big win will hardly require a serious investment – though perhaps that is the kind of thinking that caused this recession in the first place.

Is the going heavy for horseracing?

Yes...

* The Epsom Derby cannot find a sponsor – that strongly suggests that sponsorship is drying up

* Early indications suggest that the bloodstock market may have plummeted by as much as 30 per cent

* It is never good when the Royal Bank of Scotland ends up in charge of a course – as may now happen

No...

* Racing is a huge success, the second most popular sport in the UK, and the betting market remains buoyant

* Racing has really cleaned up its act after accusations of ill-treatment of animals and corruption in its history

* Actually the sports leaders have approached non-traditional sponsors who are delighted to be involved