Stronach v Derby Wars - Killing Customers, One at a Time

It was announced today that a federal judge ruled for the Stronach Group and against Derby Wars, citing that the contest site was operating like an OTB or ADW.

"A federal judge has ruled that horse racing tournament website Derby Wars has been operating as an off-track betting business and is subject to the federal Interstate Horseracing Act, which requires consent of racetracks and racing commissions prior to accepting any wagers."

This probably pretty much shuts down the company, as is.

Leaving aside that Derby Wars is probably about as close to an ADW or OTB as a hamburger is to an octopus, this is really, really disturbing. Other sports simply do not act like this.  No, most other leagues or games, looking for reach for its core product have looked to partner with tournament games. This is especially true for small, niche leagues, like the CFL:

“This new fantasy offering will give avid CFL fans and sports fans new to our league an opportunity to deepen their engagement with our game. It’s an important part of our strategy to serve our existing fan base better than ever before at the same time we attract new fans, including the next generation of fans," said Christina Litz, the CFL’s Senior Vice-President of Content and Marketing.

That's called "vision". That's a league not worrying that entity X is earning revenue off team names, or game outcomes, but a league trying to partner with a new game as a gateway to becoming a fan and paying customer (or just as important - a vehicle to keep the existing base engaged).

Racing doesn't think like this, and never has.

In racing, as we've opined here, if the big dogs can take more and more of the national betting product, they'd be happy, no matter what the top line number is. For example, if a group could control $2B of $3B in handle, it's better for them than having $2B of $11B in handle. This is simply another step in that direction.

These rulings serve even more of a purpose however, in this quest for a larger market share of a dwindling market. It's a flashing billboard saying to enterprising companies, or people who might want to create something for horse racing : "Go away"

I doubt this is any way to grow an industry. And since horse racing hasn't been growing, they're doing pretty good job at accomplishing that.