For British horse racing enthusiasts, summer is the start of The Season – the time to don on your best frock and fancy hats. While the Epsom Derby, which starts Friday, might be perfect for a fashion parade, the U.K. horse racing industry isn't looking in as good a shape.

With nearly 6 million people attending more than 1,400 race meetings last year and an annual betting turnover of £10 billion ($15 billion), according to the British Horseracing Authority (BHA), everything may appear lucrative for the "sport of kings."

However the British Horseracing Authority is warning of a £120 million ($185 million) in income by 2018 if the industry doesn't meet a series of challenges.

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Nick Rust, chief executive of the BHA said at the association's conference in May: "Our industry is more than just our sport, but as many know, if you look underneath the bonnet there are some real issues that we have to face. In three years' time, we might have a £120 million pound shortfall in the income coming to our sport."

Among the issues the industry has to tackle include a 7 percent decline since 2010 in horses being trained, owners not receiving enough financial return, and dwindling attendance levels at meetings.