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Racing's Sports Betting Conundrums

In the quest for more revenues, or more spinoffs in some fashion, some in racing have held sports betting up as another avenue for such. Most recently this looks close (close but maybe far) in Jersey, with Christie signing on.

Regardless what happens, there are several opinions about what sports betting at a racetrack does.

  • It's more competition and another drag on handle
  • It's a carve-out where racing could get more revenue, like comes from slot machines
  • It's an avenue to draw like-minded people to the racetrack, who may cross over and bet
I think I side mostly on the first of those bullets.

From the Paulick article we see the dichotomous opines on this issue. The first comment, by Fred Pope has some merit. Not surprisingly, I guess, Pope comes out for having control on sports betting and the carve out. "Are we going to allow our partners to throw us under the bus?"

Irwin has a more sink or swim opinion, "If racing cannot compete with these other forms of gambling, they better find a way to do it or perish."

Pope once again focuses on the slices, not the size of the pie, stating that under 2% of gambling revenue in the UK goes to purses (he's right).  But the UK does compete, like Irwin wants, by offering a good gamble on horse racing in a terribly difficult competitive environment. Is 2% of $20 billion better than 6% of $5 billion (where North America would probably be close to if all gambling was legal like in the UK).

The clock will not be turned back on gambling any time soon, so this new paradigm is something to clearly prepare for. And in a business that rarely prepares for anything in long term fashion, we might see - say in three years time - the policy dictated by letting the chips fall as they may.

Comments

Marv S. said…
It is rather puzzling where the horse racing industry developed this entitlement complex from. Why should slots or sports betting subsidize racing? Simply because racing was here first? (Should we have subsidized the telegraph industry?) That does not happen in Vegas or AC or anywhere else casino gambling exists. And it will start to go away in the few racino jurisdictions.

Racing needs to build interest in racing. Otherwise, it will go away with the subsidies.