Horse Racing Winners and Losers of 2016

As (yet another) tumultuous year comes to a close in horse racing land, I thought we'd look at a few winners and losers from 2016, from my perspective.

Winner - The Big Tracks (minus California)

Handle and market share at the big tracks got bigger in 2016, as this trend from mid-year finished out the year strong. Florida tracks especially garnered more betting dollars, but NYRA tracks (despite no Triple Crown try this season) certainly held their own.  The downside is (as handle will show in a couple of weeks) the pie didn't really grow much. But for those who've been asking for the big signals to be front and center, you're a winner.

Loser - By Corollary, the Small Tracks

There's no two ways about it, many small tracks in 2016 were crushed. Fewer dates, fewer races were followed by smaller handles. It's tougher and tougher for smaller tracks to get noticed.

Winner - Jackpot Bets 

Overall handle didn't move much, but there was a "rise of the jackpots" in 2016.  These bets attract newbie money, and when the newbies are broke chasing them, the whales swoop in to take over positive expected value mandatory pools.  If racing was Daily Fantasy Sports, the New York Times would probably do a story. Although these bets probably do more harm than good for the customer ecosystem, track execs love them for the short-term bumps.

Loser - Fantasy Sites

Racing, in its never-ending quest to grab revenue from other people who think of cool stuff they didn't, came down hard on the fantasy sites in 2016. From reading the headlines, you'd think these trickles of revenue were shaking the foundations of racing. But, in my view, this is low hanging fruit and it doesn't take much heavy lifting.

Winner - Frank Stronach

While Churchill Downs, NYRA and California racing overall all have questions surrounding them public relations-wise, old Frank is teflon. Everyone knows Frank loves horse racing. Everyone knows Frank wants to create more interest in the sport (no matter how crazy some of his ideas are). The Pegasus World Cup - his latest foray into changing the sport - is slated to go this month. Adding to the Frank-zeal, is the handle and market share performance of Gulfstream and Laurel. They both had big years.

Loser - Long Term Racetrack Economics

Canterbury Park lowered the juice this year and bucked the 2016 small-track downward handle trend pretty good, with a decent enough handle spike. You'd never have known it. Despite field size being  down, more rain in the region since 1890, and just about everything else, the story was "the percentage of decrease in takeout resulted in a net decrease in revenues". Nevermind the 100+ years of takeout hikes that didn't destroy the betting handle immediately, pay no heed that Amazon.com was incorporated in 1994 and incurred losses until 2004. Don't worry that when tracks have slots, they can use them as a buffer to experiment with proper pricing mechanisms. Short-term revenue was down, so this was a loser.

 Winner - Exchange Wagering

Betfair's exchange started for New Jersey residents this year. Yep, the volume is lower than expected (with them operating with half the Internet tied behind their backs), but it's there. There is no doubt about it, this is a huge win.

Loser - Rabbits

This year's Sword Dancer brought the practice out in an in-your-face way, and the fans didn't seem to like it much. For those who support rabbits, many used the "it's the way it's done in Europe for a hundred years" defense. But, with Brexit and Trump in 2016, that whole pro-Europe-globalization argument seemed to go over about as well as an Ebola epidemic.

From the comments from the high foreheads at NYRA after Sworddancergate, it seems we'll be seeing a different handling of the rabbit thing if it crops up again. So that, by definition, means it's a loser.

Winner - Big Days

Unless we've been living under a rock (I go there sometimes on twitter when my touts run badly) we all see Big Days keep getting bigger. More marketing is being placed into Big Days, and they seem to be growing with population growth and inflation, aka, like other businesses grow. Even Hong Kong has been getting into the act to juice up their big days. It's been a huge winner.

Loser - The Horseplayer

If you're a guy or gal betting $40k a year and treading water with 0.95 ROI or so, your chances of reaching the mountain top are growing thinner, because it's more difficult to find better pricing. Small ADW's who offer you better pricing are shut off from some top signals. The top signal guys have created their own ADW's where only $1M+ players get good pricing. ADW's are being shut out of California as we speak. In 2016 it's been harder and harder for racing customers in the mushy middle.

Winner - Kentucky Downs

2016's meet was another huge one for the little track that could. At KD, alternative gaming money is placed into both purses and lower takeout, making for a compelling exacta for horsemen, bettors and fans. The sky is the limit for this small, soon to be bigger, signal.


Loser - Medication Reform

This feels stalled to me, and it was in 2016, when the brakes were applied. I am not sure why, or how it happened, but at the end of 2016 here we are talking about steroids - something supposedly purged from racing a long time ago - not real reform.

It's hard for me to find blame in this. It just seems racing - where getting people together for a common goal is tantamount to finding fifty random people who all like Nickelback - is in its usual spot, stuck in the horse latitudes. 

That's my list. I am sure I have forgotten many items (I did the post at lunch, off the top of the head) so feel free to share yours on the social media machine, or in the comments section.

Have a great Thursday.