Friday, November 15, 2019

Sports Betting & The Elusive Crossover

There's a good twitter thread today between Keith and Crunk right here.

Summarizing, despite upwards of $500M bet in Jersey on football this past month (a smashing number), overall pari-mutuel handle at Jersey tracks has not seen any real bump that can be attributed to the spark in willingness to skill-game gamble. Neither - so far it appears - has on-track handle.

If these trends continue, in this day and age it should not overly surprise us, in my opinion.

"Foot traffic" and promotion sure meant something when people had rotary phones. But with mobile betting, it's just not there. And make no mistake, the jurisdictions that have embraced mobile are growing rapidly in sports betting. It's tough for racing to plant its flagpole.

Similarly, without offering new products - perhaps side by side - with sports betting, there's little chance of crossover. This point, in my view, is not nearly as strong as the first point, however. The internet, and consumers, are harder to attract because marketing is so pinpoint. It's why banner ads are losing so much relevance -  I want a pair of blue socks so I find them with ease on my mobile phone. Thanks for the shirt ad, and it looks interesting, but I don't need a shirt right now. It's one of the reasons google owns the world.

In addition, it's very difficult to promote crossover because of the pure volume of consumer choice. If I am watching the football game and see a race going off, I may bet it if something catches my eye; others might too, for action bets. But when I can bet in-running, or each quarter, who needs action?

Combating the above is tough, but it's not impossible, of course.

There are oil companies harvesting what they have, while investing and working on other fuel sources as demand for energy rises and will rise, rapidly. Companies are nimble, capital mobile, and there are opportunities around each corner. In as little as 25 years China might be paying Exxon billions for popup nuclear power plants; Gulf for charging stations or fuel cells. In 25 more it could be their core business.

Racing, thus far, appears to want a slice of sports betting as a subsidy, and there's nothing wrong with that. Protecting legacy industries with regulation and forced commerce is as old as the day is long, and taking advantage of it is not heresy. However, the added revenue from such ventures - like slots provided before it - presents the sport with a choice:  Use the capital to invest and experiment, or use it solely to harvest.

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