I mentioned this post courtesy the Horseplayers Association earlier. In it, the bad news. Wagering is down almost 10% in the second quarter. We clearly have a wagering crisis in 2008.
What happened? I think a good many people already know how we feel. On the blog and elsewhere, the tenet that has helped us go into the toilet has been trumpeted: We are old, we are governed by 1930 rules, we are slow to react to technology and by pricing our product too high we send people home constantly broke and they are tired of it.
Horseman groups sometime feel that they are immune to losses in wagering. We see that with horseman strikes, or with groups like THG stopping tracks from offering their signal to players. This is not the case. Not the case at all.
During the third quarter, pari-mutuel handle decreased 9.85% in year-over-year comparisons. Total purses were off by 2.37% during the same period, while race days were down by 1.29%. For the nine months ending on September 30, wagering is down 5.75% compared to 2007 levels, with purses dipping 0.04% and race days off by 0.87%.
I saw recently in Canada tracks like Western Fair and Georgian want to change their dates to maximize wagering, and groups are saying no. They better start saying yes, because sooner or later they will learn that when handle goes down, purses go down.
The worst part for me is that in racing when your customers leave, they are very hard to get back. This is not McDonald's where we can offer a $1.99 big mac and get them back. When they leave they tend to stay that way.
Also of note, is the "it's the economy" excuse.
“Our industry’s difficult year continued during the summer as a harsh economy and other factors continued to negatively impact business,” said Alex Waldrop, president and CEO of the NTRA.
Folks, we can not let them use that excuse. Remember, this is the same business that told us that if we just shut down those offshores (which were shut down in 2007) that handles would skyrocket - some used the figure, "by billions". That is clearly folly. If it is the economy, then why do we see this: In the exact same year and economy Aussie racing has seen handles go up.
The Australian newspaper The Age reports that Betfair's incoming chief executive in the land of Oz, Andrew Twaits, says the economic slowdown is having little impact on the firm, and after four months of trading in its new financial year Betfair is on track to beat its goal of 30 percent sales growth.
Twaits said this week that there was no doubt that the opening up of Australia's wagering industry, particularly Internet wagering, had led to increases in turnover by all providers, including Tabcorp. The disclosures have disproved dramatic claims by traditional horse racing associations and politicians who opposed Betfair's licensing that it would impact adversely on the industry.
When we deliver our product at a low price in a new exciting way we win. When we are doing what we are doing, we lose. Sometime, let's hope, this message gets through. If not, expect handles to go down more and more in the future and that will be reflected in losses in purses, racedates, horse ownership and all the rest.