The U.S. Gaming Association says they expect this Sunday's Super Bowl to result in $16B in handle in the United States alone. This wouldn't include handle from a place like Pinnacle, where early this week they were accepting six figure side bets already (during the regular season these higher limits are much closer to game time).
This is a huge number - higher than many would think only a few years ago when these estimates were harder to come by. But, with 99 million people in the US watching the big game, each person having a little money on it doesn't seem that surprising.
How did they do it? Most of it is probably obvious, in my view. Sports betting has a hundred years or more of history in the US, and ten cent lines kept enough people active and enjoying the pursuit. Add casual fans now being able to get down a bet easily at say a FanDuel or Draftkings (and dozens of others) and we have a real humdinger.
What sports betting has also done is expand offerings. Prop bet volume will likely be an all-time high again this year. As we know from business, when a soft drink or chip company adds new brands, gross sales go up.
Meanwhile back at the ranch, or er barn, The Kentucky Derby has had some growth, and last year $179 million was bet on the Derby alone. That number is paltry compared to the Super Bowl you say, and surely it is. But it's horse racing, not arguably the most popular sport in the rich western world. Maybe racing should be satisfied with it.
I think that's a bad mindset.
15.8 million people watched the Derby last year, not including whacks of us watching the track feed at home or on-track or in simo-centers. Those 15.8 million people generated about $10 in handle each. The Super Bowl will generate about $160 per person.
Churchill Downs, as most of racing, likes to protect their offering for a race like the Derby. It's not uncommon in any business who loves protectionism, but like any form of it, gross volume suffers. It's the quintessential larger piece of a small pie phenomenon.
What if Churchill Downs finally opened this race up? What if they allowed everyone to offer different kinds of chips and soda, based on what customers respond to? What if Draftkings and Fanduel were allowed to offer futures (at their customer-driven price levels, not racing's which are top-down), and head to heads, and win betting, where their millions of customers could turn on NBC and make wagers simply and easily in real time like they do the Super Bowl? Would Churchill make even more money as these new customers bet the undercard, or take shots at a pick six?
What if they took this page out of sports betting. Could in five years or ten years Kentucky Derby handle be $1 billion? Would the other Triple Crown races follow, along with television ratings? Would the sport have more of a chance to grow as people are introduced to the betting side? With $1 billion in handle, would the sport be more popular?
Maybe it would. But with the current Churchill model of protect and exclude and harvest, I doubt we'll know the answer to this question. Expand and conquer doesn't seem to be in the horse racing playbook.
Have a nice weekend everyone.
No comments:
Post a Comment