Racing as a Gambling Business

[Hambletonian]

Just does not work anymore. Nobody in his right mind would build a racetrack these days to earn profits solely from racing. The capital costs are enormous. And while most faciltiies are horribly out of date, there is no money to renovate tracks that do not have slots or other forms of gambling, which have no relation to gambling.

Slot money infused into the racing game is probably approaching its pinnacle with Aqueduct coming online....but if anybody thinks this pool of money is going to continue to grow you are just not paying attention. Racinos were a gateway drug, and now that the public has accepted them, expect to see more and more offtrack casinos, as states are lured by huge licensing fees and the promise of even more dough. Or, even more likely perhaps, is that the struggling economy will encourage states to reduce the money to purse subsidies and breeding funds. Let's face it, the track owners won't care, and once this happens the slots portion of the racinos will actually be competing with the racing portion. Both of the above scenarios are already playing out, and will continuen to do so.

The last major problem is that horseplayers, especially serious ones, are taking their money to places offering rebates. Tracks that offer rebates see profits reduced, and ones that don't lose business.

Too bad horse racing has failed miserably to promote itself as entertainment. The final nail in the coffin is that race tracks on their own, after shifting focus to simulcasting from live events, don't have much of an impact on the local economy. The benefits to the community in increased business due to 15000 fans attending, buying gas on the way and stopping off for a bite ro eat on the way home, are nonexistent when your crowd is 500 folks. Not to mention it takes less employees to serve 500 folks as comapred to 15000. And while racinos may continue to draw crowds...the portion of that benefit from horse players is little or none.

The only thing keeping most tracks alive is non-racing related income, the hope or promise of non racing related income, or the simple fact that there is nothing better to do with many of these facilities. And let's face it, it is the promise or reality of being given a monopoly on these non-racing incomes that is keeping everything going. I doubt anybody is going to build a new racino in the future if they think somebody else is going to get a slots or casino license and not have to build and maintain a race track.

[Robert Goren]

You are preaching to the choir.

[cj]

If racing can't make it as a gambling business, it will cease to exist eventually, because it is exactly that, a gambling business.

[aaron]

Originally Posted by cj

If racing can't make it as a gambling business, it will cease to exist eventually, because it is exactly that, a gambling business.

The only people who don't seem to know this are the executives who are in charge of racing.

[Robert Goren]

Originally Posted by aaron

The only people who don't seem to know this are the executives who are in charge of racing.

Actually the horse people have really hard time understanding it too.

[tzipi]

We're all onboard with you Hamble.

[cj]

Originally Posted by Hambletonian

Too bad horse racing has failed miserably to promote itself as entertainment.

This I disagree with though. This is exactly what they have tried to do for years, and it doesn't work. This is because most people don't find horse racing without gambling all that entertaining except on a few big days.

[thaskalos]

Originally Posted by cj

This I disagree with though. This is exactly what they have tried to do for years, and it doesn't work. This is because most people don't find horse racing without gambling all that entertaining except on a few big days.

The big problem -- as far as I am concerned -- is that the racing industry never embraced the fact that they are in the "gambling business"...chosing instead to portray this game as some sort of "show"...where gambling just happened to co-exist, as if by accident.

If they had accepted the fact that they were in the gambling business...then they would have realized how important their gambling customers are (just like the casinos have)...and they wouldn't have done everything they could to alienate them.

[cosmo96]

There are too many gloom and doomers in this forum

[melman]

Cosmo, when it comes to the amount of money bet each year and the interest shown it is not gloom and doom. It is reality. When I started betting horses 40 years ago the big three were, Boxing, Horse Racing, and Baseball. Of those only baseball still does OK. Without "slot cash" many tracks would no longer be operating. That is just reality.

[Striker]

Originally Posted by thaskalos

The big problem -- as far as I am concerned -- is that the racing industry never embraced the fact that they are in the "gambling business"...chosing instead to portray this game as some sort of "show"...where gambling just happened to co-exist, as if by accident.

If they had accepted the fact that they were in the gambling business...then they would have realized how important their gambling customers are (just like the casinos have)...and they wouldn't have done everything they could to alienate them.

Well said sir.

[Track Phantom]

Originally Posted by thaskalos

The big problem -- as far as I am concerned -- is that the racing industry never embraced the fact that they are in the "gambling business"...chosing instead to portray this game as some sort of "show"...where gambling just happened to co-exist, as if by accident.

If they had accepted the fact that they were in the gambling business...then they would have realized how important their gambling customers are (just like the casinos have)...and they wouldn't have done everything they could to alienate them.

Agree 100%. The world of horse racing has a few major, show stopping issues: drugs, no governing body and competition from online gambling to name a few. However, the biggest issue it has yet to deal with is understanding its demographic and what appeals to them.

Did you ever ask yourself why YOU (and by you I mean me and you reading this) are so religously committed, addicted and drawn to this game but your neighbor has almost zero interest? What is it about YOU (and me) that captivated us from the very beginning? I'm not literally asking that question but the industry should be. Once they tap into what draws the hard core player to the game, they need to figure out how to market it and, most importantly, direct that marketing to the proper audience.

In my opinion, the biggest hook to this game is the intellectual challenge of handicaping and being able to wager on your theoritical opinion. If you take that out of the equation, I'm not sure I would watch even one more race. Maybe I'm different, but I doubt it.

Not sure what the right answers are but clearly the industry doesn't either. I'm damn sure if I worked in the industry and was tasked with finding a solution, I would have a better grasp on what needs to be done. The discouraging thing is the people that should care, dont!

[DeanT]

Vic Zast said this on twitter the other day. When you see the actions of the TOC's of the world et al, it makes sense why the sport has lost customers.

If McDonald's was conducting business solely for the people who make the potatoes for the fries, I don't think they'd have a very sound business either.

https://twitter.com/#!/viczast/status/183946987140431872

Fans and horseplayers must realize horse racing's conducted solely for owners. Once realized, decisions and behavior are understandable.

[RXB]

The sport is conducted for horse owners? Really?

I'd be willing to wager that if owners' expenses and returns were aggregated, we'd see that they're waving goodbye to a larger % of their invested dollars compared to bettors.

Racing is conducted for the people who make their livelihoods from it. Not for owners-- who in aggregate, like bettors, lose a lot of money.

[Dave Schwartz]

Fans and horseplayers must realize horse racing's conducted solely for owners. Once realized, decisions and behavior are understandable.

I assure you that this is precisely how horsemen see the sport.