Sounds like an introduction at a 12 step program doesn’t it? I used to be embarassed to tell people what I did over the weekend but not anymore. I realized that there is no reason to hide the fact that I like to gamble because the majority of people in the United States approve of gambling according to a 2006 report done by John Benson, Tina Reigel and Melissa Hermann.
In the report they looked at a survey done by the Harvard School of Public Health and Pew which asked several questions, one of which was do you approve or disapprove of various forms of gambling? 72% of those that participated in the survey approved of lotteries, 62% approved of casino gambling and 50% approved of off track betting on horse races (although it is unclear if that meant only OTB betting or all betting).
Overall 67% of the participants said that they had gambled in at least one of the 13 forms of gambling that was part of the survey. More importantly the younger participants (under age 50) in the survey had a pro-gambling position that ranged from 15% to 26% higher than the older participants (over age 65). Also 55% of those surveyed between the ages of 18 and 49 said they believed gambling helps states rather than hurts them.
The numbers back up those opinions as well. The National Conference for State Legislators (NCSL) reported that in 2006 lottery sales in the United States were more than $53 billion. The UNLV Center for Gaming Research reported that in 2010 Nevada took in $10.4 billion in slots and table game revenue, Atlantic City took in $3.6 billion in slots and table game revenue, Mississippi took in $2.4 billion in slots revenue and Pennsylvania took in $2.3 billion in slots revenue. The Jockey Club reported that in 2011 the total wagering handle on horse racing in the United States was $10.8 billion.
The stigma attached to gamblers doesn’t seem to be justified based on those statistics, does it?
Come Out of the Closet
If your state sells Mega Millions or Powerball tickets you probably already know that lottery players have no problem getting in front of a television camera and announcing that they bought their tickets for the latest jackpot drawing. Here in Maryland the local news stations send reporters out to various local businesses that sell lottery tickets and interview people hoping to luck their way into early retirement. They never have trouble finding willing participants.
You might be asking where I am going with this? Here is my question to you: if people are ready and willing to get on camera in front of the world and announce that they just spent their money on a form of gambling that takes no skill and is based solely on luck then why won’t you tell people that you bet on horses, a form of gambling that, while there is some luck involved, is based on a diverse skill set gained over years of experience?
It is time to come out of the closet and tell the world that you bet on horses.
A Dead Sport or Bad Reporting?
While the media reports that horse racing is dead the dollars say otherwise. As mentioned earlier wagering handle in the United States was $10.8 billion last year. The Jockey Club also reported that Auction Sales topped $728 million in 2011 and Total Gross Purses were nearly $1.1 billion. A 2004 American Horse Council study revealed that the horse racing industry contributed $101.5 billion towards the United States GDP and employed 1.4 million people.
If the horse racing industry is dead or dying what does a thriving industry look like? It appears that the mainstream media has ignored the facts once again and as usual the general public has failed to do the research which would have revealed the truth.
The truth is the horse racing industry has sufferred like most other industries during the recent economic downturn but to say it is dead is a lie. Further proof of this was provided this past weekend when 85,811 people attended the Belmont Stakes and bet $13.8 million. All sources handle for the Belmont Stakes card was nearly $96.5 million, the third highest of all time.
I think it is clear the horse racing industry is not dead but it could be better. The economic downturn has contributed to the decline in wagering handle, auction sales and purses but it is not the only factor. Thefailure to attract new fans to replace those that have left is another major reason why the horse racing industry financials are trending downward.
Last year the Jockey Club funded an independent study that examined the state of horse racing and what could be done to reverse the negative trends. The study was completed by McKinsey and Company and the results and their recommendations were presented at the Jockey Club Round Table last summer.
After hearing their recommendations I was a little concerned that they did not mention the most important factor, in my opinion, that will lead to growth in the horse racing industry. While their recommendations included many that will generate interest in the sport none addressed the foundation of the horse racing industry.
It’s the Gambling Stupid
The Jockey Club could have paid me a lot less money and I would have given them a better plan of action to help grow the sport. The horse racing industry is funded by wagering handle. The money you and I bet is what keeps the race tracks open, funds the purse accounts and gives people a reason to breed and sell race horses. Wagering handle is the foundation of the industry. Without it there would be no sport.
The horse racing industry has downplayed the role of betting in the sport by not promoting it and giving it little coverage during national telecasts. During the early years of the Breeders’ Cup the NBC broadcast included a decent amount of air time dedicated to betting. Remember “Pack’s Pool” where Harvey Pack was given a $100 bankroll to bet the races? Discussion of the Pick 7 took place and betting strategy was prominent before each race.
Now the betting side of the sport is an afterthought. Instead the time between races is filled with stories about the horses and their connections. While those should be included they should not be the focus. I enjoy hearing some of the stories but they are not the reason I am watching.
Let me put it to you bluntly: I follow horse racing because I can bet on it, take that away and I will find some other form of entertainment to occupy my free time.
I don’t think that I am alone on this. None of the people I have become friends with at the race track care much about the personal side of the sport. They are there for one reason, and one reason only, to make money. I hope that doesn’t sound cold but it is the truth.
Growing the fanbase should not begin by showing the beauty of the horse or appealling to their emotional side but rather by focusing on the money that can be made by betting the races. Think about it for a minute who is drawn to the sport by the non-betting angles? People who are not going to go to the race track the next week or open an account with an ADW. Why do we care about those people? How are they going to help grow the sport? If they watch the races but never bet a dime they are not worth courting.
It seems that there is some illusion that the horse racing industry has the same business model as the NFL. The NFL generates most of its revenue from television deals. Networks fork over billions of dollars to gain the rights to broadcasts football games. Ticket sales account for only a fraction of the annual revenue for the NFL so television is their focus. Furthermore during NFL games the focus is on the game not the side stories. The side stories are aired during the pregame show.
The business model for horse racing is unique. As previously mentioned its revenue is generated from wagering handle. There will probably not be a billion dollar offer to broadcast horse racing in the near future. Horse racing broadcasts should however copy the NFL model and focus on their money-maker. Rather then dedicate substantial time between races to side stories they should employ experienced handicappers to discuss handicapping and betting strategies for the races.
Show the viewers that horse racing is skill-based and not based entirely on luck. Show them the money that can be made. Spend more time discussing the race results, how the pace effected the outcome, how traffic trouble hurt horses and what the payouts were. Teach them something every time they tune in but don’t stop there.
Tell them where they can bet. Provide links on the network website to race tracks in the United States and to all of the available ADW’s. Twinspires, TVG and Xpressbet are available in most states. Make it easy for them to place their first bet. People want to be spoon fed, to have things handed to them or to have someone else do it for them. You can’t go to their houses and bet for them but the easier you make it for them the more likely they are to do it.
Change the old NTRA motto from “Go, baby, go” to “Bet, baby, bet.”
The first time they make a winning bet based on their handicapping they will be hooked. Combining great entertainment with making money is a winning combination. What other form of entertainment can result in having more money then you started with at the end of the day? None, of course.
Bite the Hand that Feeds
Slots subsidize many racetracks around the country, including those in my home state of Maryland. While we don’t have slots at the two major racetracks, due to mismanagement by the racetracks owner, we benefit from a portion of the slots revenue nonetheless. While that money benefits purses and future capital improvements to the track it is generated through mindless gambling. You and I know that what separates horse racing from slots and many other forms of gambling such as lotteries, keno and roulette is that it is skill-based.
Unless you are betting random numbers or using the quick pick function on the self service terminal you are probably spending time handicapping the race and planning your betting strategy. The guy sitting in front of the slot machine, although he may think he has some control over the outcome, is simply pushing a button and waiting for money to come out. He has no control over whether or not he wins because the slot machine is programmed to randomly pay out. I have heard people say that a machine is “hot” or they have a “lucky” machine, they have either had a fortunate (random) winning streak or they are dilusional.
Maybe some people want to spend their money mindlessly for hours in front of the flashing lights of a machine or maybe, if they knew it was possible to win consistently, they would spend their money at the betting windows of the race track.
It may sound like sacrilege but telling people the truth would benefit both them and the race tracks. Slots may be a quick fix, but they are not the long term solution. They provide an influx of money upfront but they don’t always lead to long term prosperity. Delaware Park has been on the decline financially for many years. Slots helped in the first few years after they were installed but now small fields and low wagering handle are the norm. Then there are tracks like Fort Erie, in Canada, that have been told that the slot money that they have used to stay afloat is being cutoff for government use. Fort Erie will be closing its doors next year unless the decision is reversed.
The aforementioned McKinsey and Company study found that horse racing is losing 4% of its fan base each year. Their recommendations for attracting new fans, especially younger fans, have some merit but they are flawed. It is not as simple as replacing them. The new fans cannot simply be casual or semi-serious viewers. They need to show their support at the betting windows. You can replace the people that leave the sport but if you don’t replace the dollars they bet the problem is not solved.
A perfect example of this flawed thinking occurred last weekend. The Belmont Stakes was supposed to be a boon for the sport. Thousands of new fans would flock to Belmont park and millions would watch the race on television. The sport would be saved if I’ll Have Another won the Triple Crown. As you all know I’ll Have Another scratched the day before the race and with that news the sport sunk back into irrelevancy for another year, or did it?
The scratch of I’ll Have Another was described as a terrible blow to horse racing but was it really? How many of those people that were going to tune into the race would have bet a dollar on the race? How many of the people that were going to attend the Belmont would be back the next week? Most of them would be temporary fans, caught up in the hype. Most of them would not become long term fans and more importantly long term bettors.
For those of us that are long time die-hard fans the scratch was devastating, not because we thought it would help the sport, but because we are true fans of the sport. We show our support with our wallets, we go to the race track or bet from home almost every week, we will be there next week, next month and next year with or without a Triple Crown winner. We need more of us, not more of them. The solution is right there in plain sight, to recap:
- Focus television broadcasts on handicapping and betting
- Educate viewers during every broadcast
- Teach them where they can make a bet (race tracks and ADW’s)
- Differentiate horse racing from mindless forms of gambling such as slots
It sounds easy but I know that its not that simple. I know it takes years to become a winning horseplayer and many people won’t stick around that long but if we can capture a fraction of those people we will help stop the erosion of the fan base. If we can teach people that winning is possible and that luck has little to do with it we will grow the sport.
That is why I am here, to educate and promote the sport. I cannot do it by myself so I ask that you spread the word. Teach a friend how to handicap and bet. Share this article with your friends and family (the buttons to do so are right there below, see I made it easy for you). Send your local race track operator an email or letter with a link to this article and tell them to rethink their strategy for attracting new fans.
Insanity is doing the same thing over and over again and expecting a different result. It is time for the horse racing industry to stop the insanity and take a different approach to solving its problems.
That’s the end of my rant. After reading the negative press about the scratch of I’ll Have Another I had to say something. The question is do you agree with me or I am the one that is insane? Let me know in the comment section below and if you haven’t already done so join the Equinometry Community using the form that follows.
Creative Commons photos courtesy of boboroshi, Joe Shlabotnik and JoelK75