Posts Tagged ‘pari-mutuel betting’
Monday, December 8th, 2008
By Ray Paulick
We can blame the economy, and people like National Thoroughbred Racing Association CEO Alex Waldrop will almost certainly do so, when the dismal year-end figures show that pari-mutuel handle in the United States is at its lowest level since 1998. But pointing to the dismal economy as the sole reason for the Thoroughbred racing industry’s woes will be a fatal mistake.
Based on monthly pari-mutuel handle figures from Equibase through November (and the expectation of a very slow December), the Paulick Report projects year-end handle in the U.S. will total just under $13.7 billion for 2008. This will be the fourth year of decline in handle over the last five years and the lowest since $13.1 billion was wagered in 1998.
Adjusted for inflation, the 1998 handle is equal to $17.4 billion in today’s dollars. The Thoroughbred pari-mutuel industry will fall more than 21% short of that figure. November’s numbers are actually worse than they appear on paper. The decline of 9.7% from November 2007 comes despite the fact there were five full weekends in the month of November this year compared with only four weekends last year. Weekend handle overall is higher than weekday handle. Handle will likely fall more than 10% this December, which only has four weekends (eight Saturday and Sunday programs) compared with five full weekends in December 2007.
The accompanying table, using statistics from the Jockey Club Online Fact Book, shows the trend in U.S. handle since 1996. If there is a sliver of good news from those figures it is the average amount of pari-mutuel handle per race, which has risen from $199,574 in 1996 to $287,014 in 2007. That number will drop this year.
U.S. THOROUGHBRED PARI-MUTUEL HANDLE, 1996-2008
| Year |
US Handle |
% Change |
** CPI Adjusted Handle |
No. Races |
Average Bet Per Race |
| *2008 |
$13,694,000,000 |
-7.00% |
$9,921,000,000 |
51,000 |
$268,527 |
| 2007 |
$14,725,000,000 |
-0.40% |
$11,143,000,000 |
51,304 |
$287,014 |
| 2006 |
$14,785,000,000 |
1.50% |
$11,507,000,000 |
51,668 |
$286,153 |
| 2005 |
$14,561,000,000 |
-3.60% |
$11,698,000,000 |
52,257 |
$278,642 |
| 2004 |
$15,099,000,000 |
-0.50% |
$12,541,000,000 |
53,595 |
$281,724 |
| 2003 |
$15,180,000,000 |
0.80% |
$12,944,000,000 |
53,503 |
$283,722 |
| 2002 |
$15,062,000,000 |
3.20% |
$13,136,000,000 |
54,304 |
$277,364 |
| 2001 |
$14,599,000,000 |
1.90% |
$12,934,000,000 |
55,127 |
$264,824 |
| 2000 |
$14,321,000,000 |
4.40% |
$13,048,000,000 |
55,486 |
$258,101 |
| 1999 |
$13,724,000,000 |
4.60% |
$12,925,000,000 |
54,644 |
$251,153 |
| 1998 |
$13,115,000,000 |
4.60% |
$12,624,000,000 |
55,894 |
$234,640 |
| 1997 |
$12,542,000,000 |
7.90% |
$12,260,000,000 |
57,832 |
$216,869 |
| 1996 |
$11,627,000,000 |
11.50% |
$11,627,000,000 |
58,259 |
$199,574 |
*2008 year-end figures are projected
**Adjusted for inflation using 1996 dollars
The decline in handle over the last 10 years has come despite the fact we’ve made it easier for people to bet, with account or advance deposit wagering now available in many states. In addition, betting menus at nearly every track have been expanded to include more exotic wagers (rolling pick 3s, pick 4s, super high 5s, etc) and lower minimum bet sizes (i.e., the ten cent superfectas).
The worst news of all is that there are no plans on the table to reverse these trends. Industry infighting is at an all-time high, with companies like Churchill Downs Inc. and horsemen’s organizations both entrenched in their negotiating positions on the division of revenue for account wagering. We have two competing racing channels, confusion over who accepts bets on which tracks, and a fan base that is increasingly fed up and finding other places to take their action. Many racetracks appear to have given up on ever building their core business and instead are latching onto slot machines for their own personal salvation. With Magna Entertainment as the poster child, corporate ownership of tracks has been a failure for the racing industry, whose few bright spots can be found in locally- or family-owned tracks like Tampa Bay Downs in Florida or Oaklawn Park in Arkansas.
The National Thoroughbred Racing Association, launched just over 10 years ago with great fanfare and anticipation, has been dismantled almost to the point of irrelevance. We have no national marketing, no cohesive strategy to grow the business and no central organization to develop one. Structure matters, and this industry has no structure in place to bring about meaningful change. Some of the so-called best and brightest among our leaders are saying our only chance of survival is to go through a massive retraction in the number of racetracks, racing dates and horses bred each year. But a "less is more" philosophy sounds more like an admission of defeat.
The upside down economics of maintaining a racing stable (average costs exceed purse potential by an factor of 2-to-1) are driving many people out of the business, especially those who have less discretionary money than they had just a few years ago. The image of the sport - one whose grandstands echo from emptiness and whose equine athletes often are cruelly discarded at the end of their useful careers - is not appealing to a growing percentage of the American people. We need a game-changing play, new leadership that will get us out of the old way of thinking, fresh ideas and a bold vision for structural change that can reverse the direction the industry is heading. Without that, we may be on borrowed time. Does there have to be a Thoroughbred racing industry in the United States, even in a place like Kentucky that calls itself the horse capital of the world? I’ll answer that question by asking another one: Does there have to be an American automobile industry?
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Tags: Account Wagering, alex waldrop, CDI, churchill downs, Horse Racing, horse racing economics, Jockey Club, National Thoroughbred Racing Association, NTRA, pari-mutuel betting, pari-mutuel handle, pari-mutuel wagering, Paulick Report, racinos, Ray Paulick, Slot machines, Thoroughbred Horsemen's Group
Posted in Account Wagering, Churchill Downs Inc., Horse Racing, Industry, Industry Reform, Jockey Club, Marketing, National Thoroughbred Racing Association, Simulcasting, Thoroughbred Business, Wagering | 27 Comments »
Tuesday, October 7th, 2008
By Ray Paulick
People are making and cancelling bets on horses after races have begun. Let me repeat that: PEOPLE ARE MAKING AND CANCELLING BETS ON HORSES AFTER RACES HAVE BEGUN. Does anyone have a problem with that?
Apparently, several members appointed to a subcommittee on integrity that is part of a Task Force on the Future of Horse Racing in Kentucky aren’t all that concerned about the issue. The integrity subcommittee couldn’t even muster a quorum when three of its six voting members failed to show up for the panel’s first meeting at the offices of the Kentucky Horse Racing Commission on Monday afternoon.
At the outset of the meeting, subcommittee chairman Ned Bonnie (a member of the Kentucky Horse Racing Commission) said the panel was poised to take action on integrity issues until he was reminded by the commission’s executive director, Lisa Underwood, that a quorum wasn’t present.
Bonnie was joined by subcommittee members Robert Beck Jr. (an attorney and chairman of the Kentucky Horse Racing Commission) and Robert Vance, the secretary of Kentucky’s Environmental and Public Protection Cabinet. But missing were racing commission vice-chairman Tracy Farmer (chairman of the Task Force on the Future of Horse Racing and a Thoroughbred owner and breeder), Louisville real estate developer Brian Lavin and Paducah, Ky., attorney Duncan Pitchford.
It’s no wonder that some are referring to this entire exercise proposed by Kentucky Gov. Steve Beshear as a “task farce.”
Bonnie was disappointed at the no-shows, to be sure, but how do you think horseplayers feel? They are the ones, after all, whose confidence has been eroded by an archaic totalizator system with flaws that are being exploited by techno-savvy thieves; off-shore rebate shops that are virtually unregulated; a patchwork network of simulcast sites that answer to 38 different regulatory bodies; and ineffective rules, many of which were written for the good old days when the only bets made took place on track with a live teller.
For anyone not paying attention, the volume of pari-mutuel handle on horse racing is down this year by roughly 5%. It’s not just a Kentucky problem. By year’s end, total pari-mutuel handle in the United States may very well dip below $14 billion for the first time since 1999. That’s 10 years of stagnation.
We can blame the economy or competition from other forms of entertainment and gambling. Or we can ask our customers, which the National Thoroughbred Racing Association recently did, as to why they are not pushing as many dollars into the pari-mutuel pools as they used to. According to Keith Chamblin, the NTRA executive who outlined the consumer research at an industry conference, the attitudes of racing’s best customers can be summed up in five words: “Our core fans are pissed.”
Consumers are pissed because they feel cheaters continue to win races at an alarming rate by using performance enhancing drugs. They are convinced people are making or cancelling bets after races begin. And they see racing commissions and task forces and blue ribbon panels as pointless exercises conducted by mindless political appointees who are too out of tune to understand the problems or too apathetic to fix them.
That may or may not be the case with Kentucky’s Task Force and its various subcommittees. It should be noted that a majority of the ex officio non-voting members of the integrity subcommittee were on hand, including owner-breeder Gary Biszantz, professional horseplayer Mike Maloney and businessman Frank Kling, who spent a great deal of time and effort working on wagering integrity issues as a member of the Kentucky Horse Racing Authority, a panel dissolved by Beshear earlier this year and replaced with the current racing commission. All three spoke up in ways that indicate they understand the problems and sense the urgency in addressing them.
But the ex officio members can’t vote on any action items addressed by the integrity subcommittee. That’s up to the six voting members to do – if and when they show up for a meeting.
In the meantime, the entire Task Force should remember those five chilling words repeated by Chamblin: “Our core fans are pissed.”
The ball is in the court of the Kentucky Task Force and regulators, track operators, account wagering companies and others throughout this country.
What are they going to do address the concerns of racing’s best customers?
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Tags: brian lavin, duncan pitchford, frank kling, gary biszantz, Horse Racing, integrity subcommittee, keith chamblin, kentucky horse racing, kentucky horse racing commission, kentucky racing, lisa underwood, mike maloney, National Thoroughbred Racing Association, ned bonnie, NTRA, pari-mutuel betting, pari-mutuel handle, pari-mutuel wagering, pari-mutuels, Paulick Report, Ray Paulick, robert beck jr., robert vance, steve beshear, task force on the future of horse racing, totalizator, Tote System, tracy farmer
Posted in Horse Racing, Industry Organizations, Industry Reform, Kentucky, National Thoroughbred Racing Association, Regulatory Issues, Simulcasting, Wagering | 16 Comments »
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