Tweet
Horse racing struggles to become a more nationally marketable sport
Horse racing struggles to become a more nationally marketable sport
Sunday, December 09, 2001
By Pohla Smith, Post-Gazette Sports Writer
For more than the first two-thirds of the 20th century, the Sport of Kings was the king of sports. Thoroughbred racing drew more fans each year than the so-called national pastime, baseball. Harness racing also had a large following.
Monarchos wins the Kentucky Derby in May. (Al Behrman, Associated Press)
Every decade had equine heroes as popular as Babe Ruth, Ty Cobb and Mickey Mantle. Hundreds of thousands flocked to racetracks to watch Triple Crown champions Man o' War and Secretariat, and harness champion Dan Patch.
That hasn't been the case for the past few decades. Attendance at tracks has dwindled, a few have failed and many are struggling, leading some folks to wonder if racing is dying.
That is not the case.
The amount of money being bet on horse races is larger than ever, television ratings spiked up this year and a handful of tracks are flourishing.
But racing is changing.
Most of the betting is done away from the track, at betting parlors, television simulcast centers and home via telephone or computer. Racetracks, hoping to replace an aging on-track audience, are adding additional entertainment, including, in some cases, slot machines.
The industry is trying to unify via the 3-year-old National Thoroughbred Racing Association. Its major goals are to create a nationally marketable sport like the NFL and attract new patrons through common marketing and promotions. But issues such as competing simulcast networks and licensing and drug rules that vary from state to state continue to cause divisiveness and customer confusion.
"We are spending more to market this sport nationally than we've ever spent, and it's not nearly enough," said Keith Chamblin, NTRA vice president of television and marketing. "I'm not sure it could ever be enough."
Thoroughbred racing doesn't keep national attendance figures, but the composite numbers compiled by New York Racing Association for Belmont, Aqueduct and Saratoga are representative of the industry as a whole. In 1985, average on-track attendance for 308 days split among the three tracks, was 15,154. Last year, the average on-track crowd over 258 racing dates was 9,573 despite record attendance at Saratoga's summer meet.
Harness racing does keep national attendance figures, and they are startling. In 1975, according to the U.S. Trotting Association, attendance reached a high of 28,089,984. Last year it was 7,293,115.
But because of convenience wagering, the collective term for all bets placed away from the track, the amount gambled on races -- known as handle -- has grown.
The Jockey Club, thoroughbred racing's governing body, reported in its 2001 Fact Book that national handle increased from $730.8 million in 1993 to $1.49 billion last year, virtually all the growth in convenience wagering, The Jockey Club said.
"Generally in our industry, and in the racing industry overall, at any particular venue, 20 percent or less of the handle is on the live product and 80 percent or more is [off-track]," Chamblin said.
In its report, The Jockey Club warned that the rate of growth in convenience wagering had "slowed, indicating a lack of the sort of expansion in racing signal distribution experienced since the advent of widespread simulcasting."
That could mean that with every track sending its signal to virtually every site possible and with most expanding their racing dates, racing may soon reach the point of oversaturation, or at least zero growth. That is one reason many tracks are looking to increase attendance and additional revenue through other tools, such as concerts and slot machines.
Tactics big and small
The horse racing industry is dealing with a popularity problem for many reasons, but one cause is cited in most conversations with industry insiders.
"There was a failure to aggressively position itself or partner itself with network television," Chamblin said. Other sports like pro football, the NBA, golf and auto racing did and built huge national followings that cut into racing's popularity.
Erosion of the sport's standing also is attributable to government-run lotteries; the expansion of legalized gambling in Atlantic City and other sites outside of Las Vegas; the growth of at-home entertainment; and the simple fact that as the country has grown more urban, fewer people are familiar with horses and are less likely to be drawn to them.
The tools racing is using to combat its problem are even more numerous than the causes for it. One change embraced by all tracks has been the addition of new multi-horse and multi-race bets called exotic wagers; some have gone so far as to occasionally guarantee million-dollar handles on a popular wager known as the Pick Six. (To win, the bettor must pick the winners of six consecutive races.)
The NTRA has taken two major steps to market the sport nationally: big buys of television time for top races not previously covered by the networks and national promotions built around big events.
There now are programs showing prep races leading up to the Triple Crown and to the Breeders' Cup. This year, there were about 135 hours of programming of live racing, as well as a weekly Racing Digest and a couple of thoroughbred racing-related specials. There were special advertising sections in USA Today.
Consumer research, Chamblin said, has determined an increased awareness in racing nationally as a result of these efforts. The marketing probably led to the higher TV ratings for the Kentucky Derby, Preakness and Belmont Stakes and, perhaps, for the bigger crowds at those races.
Individual tracks have come up with all kinds of strategies.
Some have, with state permission, added slot machines or video lottery terminals. Others have gone for entertainment. Gulfstream Park near Miami has concerts featuring bands with youth appeal, like Big Bad Daddy. Some, like The Meadows in Washington County, hold Comedy Nights; others have flea markets -- even dog sled races.
The owners of Mountaineer Park in Chester, W.Va., have turned the thoroughbred track into a full-service resort. Besides slot machines and simulcasts from numerous tracks, Mountaineer offers a hotel, a convention center, an 18-hole golf course, boxing matches and concerts. The company's land holdings have grown from 600 to 2,000 acres, and President Ted Arneault, major stockholder in the Mountaineer Gaming Group Inc., said development of that acreage to include shopping and tourist-oriented businesses will continue.
Most tracks don't have room for that kind of expansion, but the addition of slots has led to major turnarounds in the fortunes of tracks in several states and Canada.
Convenience wagering has helped some individual tracks as much as it has the national handle. Conversely, it has contributed to deterioration of others. Fans spread throughout the nation can now enjoy watching and betting the sport's best horses at the top tracks -- Saratoga in upstate New York, Belmont in New York City, Hollywood Park in Los Angeles, Del Mar in California. Sometimes that hurts the less glamorous local product because horsemen get smaller pieces of convenience wagering.
State tracks want help
A good example of how convenience wagering and slots can affect a track is The Meadows. The harness track was one of the first to show big gains from convenience wagering in the mid-'80s to mid-'90s. Now it is losing ground -- in part because other tracks have caught up by getting permission for convenience wagering from their states, but primarily because of the slots at Mountaineer and Wheeling Downs, a greyhound track, Meadows officials contend.
Mountaineer is booming; as are its horsemen and women and related businesses. Since the first slots were installed in late 1994, purses, or the money paid to the top finishers in races, have increased from an average $15,850 per racing day in the first quarter of 1994 to $128,935 per day in the fourth quarter of 2000. Over the course of this year, the daily purses have increased to $160,000. This year, the purse of Mountaineer's jewel race, the West Virginia Derby, was raised $200,000 to a half-million dollars and will climb to $600,000 next year. The humble-looking track now is regularly drawing horsemen from highly regarded tracks such as Churchill Downs and Keeneland.
The Meadows wants very much to get in on the slot action and reclaim the southwestern Pennsylvania bettors it says it has lost to West Virginia. So do Pennsylvania's other three tracks: the Downs at Pocono, another harness facility, and Philadelphia Park and Penn National in suburban Harrisburg, both thoroughbred facilities. Those tracks are affected by gaming in Atlantic City and slots in Delaware and, soon, in New York, where they were legalized this fall.
New York's law has the potential of putting as many as 20,000 additional slot machines within 60 miles of Pennsylvania borders, according to Tom Kauffman, executive director of the Pennsylvania Horse Racing Association, which represents the state's horse tracks.
"The playing field has been significantly altered. [Neighboring states] have a financial advantage," Kauffman said.
"The industry's struggling [in Pennsylvania]. Handle, attendance, purses, quality of racing are trending down. The purses are only half of our competition's."
For example, he said, the Downs at Pocono offers daily purses of about $48,000; the Meadows is about $60,000. A Delaware harness track with slots, Dover Downs, distributes average daily purses of $150,000.
As a result, he said, many horsemen are taking their horses to the other states, which has the effect of making Pennsylvania racing less attractive to fans and bettors.
Legislators have tried to help the industry, which directly or indirectly employs nearly 7,000 full- and part-time workers, according to an economic study by The Institute of State and Regional Affairs at Penn State-Harrisburg. The study was commissioned by the tracks.
Bills to legalize slots in Pennsylvania have failed four times, in 1996, '97, '98 and '99. State Rep. Thomas Petrone, D-Crafton Heights, has introduced a bill that would allow slots if approved by local vote, earmarking a portion of slots revenue for lottery-funded seniors programs.
Gov. Mark Schweiker has indicated he will not support expansion of gambling without statewide voter approval.
Get them in the door
Industry analyst William Shanklin, a Kent State University professor of marketing and entrepreneurship, believes slots are useful but not the entire answer for racetracks with flagging attendance and an aging audience.
"It's not going to be a panacea for all tracks, but it will reinvigorate," he said. "You still need good product and service. Mountaineer offers a high level of service and a clean environment."
Shanklin did say he thought slots would work well for The Meadows, in large part because of its location.
Mountaineer chief Arneault also believes slots are not the complete answer.
"One of the basic premises of looking at an asset is how do you get maximum utilization," Arneault said. "With any racetrack built from the '20s until recently, they are very large facilities with large grounds geared to entertainment four hours a day, four days a week. The rest of the time they sit unused. Looking at racing, looking at all sports as a whole, almost all have gone to multipurpose facilities."
David Wilmot, head of Woodbine Entertainment Group in Ontario, agrees with Arneault, even though slots have led to huge purse increases for horsemen at Woodbine and sister track Mohawk.
"We believed the slots would allow us to try to convert slot players over gradually to racing," he said. "We're slowly making headway."
Whatever the methods, more work is needed if racing is to add a young people to a fan base the NTRA says is mostly 35 or older.
"I don't think there's any question we're still behind. I think we've also made great strides in just the last decade of the 20th century," said the NTRA's Chamblin.
"My own thought is that if we can expose our product to enough people on a regular basis ... at some point we might just be in a position where a small percent of the population might want to check out the live product. If we do, we could see attendance grow."
Sunday, December 09, 2001
By Pohla Smith, Post-Gazette Sports Writer
For more than the first two-thirds of the 20th century, the Sport of Kings was the king of sports. Thoroughbred racing drew more fans each year than the so-called national pastime, baseball. Harness racing also had a large following.
Monarchos wins the Kentucky Derby in May. (Al Behrman, Associated Press)
Every decade had equine heroes as popular as Babe Ruth, Ty Cobb and Mickey Mantle. Hundreds of thousands flocked to racetracks to watch Triple Crown champions Man o' War and Secretariat, and harness champion Dan Patch.
That hasn't been the case for the past few decades. Attendance at tracks has dwindled, a few have failed and many are struggling, leading some folks to wonder if racing is dying.
That is not the case.
The amount of money being bet on horse races is larger than ever, television ratings spiked up this year and a handful of tracks are flourishing.
But racing is changing.
Most of the betting is done away from the track, at betting parlors, television simulcast centers and home via telephone or computer. Racetracks, hoping to replace an aging on-track audience, are adding additional entertainment, including, in some cases, slot machines.
The industry is trying to unify via the 3-year-old National Thoroughbred Racing Association. Its major goals are to create a nationally marketable sport like the NFL and attract new patrons through common marketing and promotions. But issues such as competing simulcast networks and licensing and drug rules that vary from state to state continue to cause divisiveness and customer confusion.
"We are spending more to market this sport nationally than we've ever spent, and it's not nearly enough," said Keith Chamblin, NTRA vice president of television and marketing. "I'm not sure it could ever be enough."
Thoroughbred racing doesn't keep national attendance figures, but the composite numbers compiled by New York Racing Association for Belmont, Aqueduct and Saratoga are representative of the industry as a whole. In 1985, average on-track attendance for 308 days split among the three tracks, was 15,154. Last year, the average on-track crowd over 258 racing dates was 9,573 despite record attendance at Saratoga's summer meet.
Harness racing does keep national attendance figures, and they are startling. In 1975, according to the U.S. Trotting Association, attendance reached a high of 28,089,984. Last year it was 7,293,115.
But because of convenience wagering, the collective term for all bets placed away from the track, the amount gambled on races -- known as handle -- has grown.
The Jockey Club, thoroughbred racing's governing body, reported in its 2001 Fact Book that national handle increased from $730.8 million in 1993 to $1.49 billion last year, virtually all the growth in convenience wagering, The Jockey Club said.
"Generally in our industry, and in the racing industry overall, at any particular venue, 20 percent or less of the handle is on the live product and 80 percent or more is [off-track]," Chamblin said.
In its report, The Jockey Club warned that the rate of growth in convenience wagering had "slowed, indicating a lack of the sort of expansion in racing signal distribution experienced since the advent of widespread simulcasting."
That could mean that with every track sending its signal to virtually every site possible and with most expanding their racing dates, racing may soon reach the point of oversaturation, or at least zero growth. That is one reason many tracks are looking to increase attendance and additional revenue through other tools, such as concerts and slot machines.
Tactics big and small
The horse racing industry is dealing with a popularity problem for many reasons, but one cause is cited in most conversations with industry insiders.
"There was a failure to aggressively position itself or partner itself with network television," Chamblin said. Other sports like pro football, the NBA, golf and auto racing did and built huge national followings that cut into racing's popularity.
Erosion of the sport's standing also is attributable to government-run lotteries; the expansion of legalized gambling in Atlantic City and other sites outside of Las Vegas; the growth of at-home entertainment; and the simple fact that as the country has grown more urban, fewer people are familiar with horses and are less likely to be drawn to them.
The tools racing is using to combat its problem are even more numerous than the causes for it. One change embraced by all tracks has been the addition of new multi-horse and multi-race bets called exotic wagers; some have gone so far as to occasionally guarantee million-dollar handles on a popular wager known as the Pick Six. (To win, the bettor must pick the winners of six consecutive races.)
The NTRA has taken two major steps to market the sport nationally: big buys of television time for top races not previously covered by the networks and national promotions built around big events.
There now are programs showing prep races leading up to the Triple Crown and to the Breeders' Cup. This year, there were about 135 hours of programming of live racing, as well as a weekly Racing Digest and a couple of thoroughbred racing-related specials. There were special advertising sections in USA Today.
Consumer research, Chamblin said, has determined an increased awareness in racing nationally as a result of these efforts. The marketing probably led to the higher TV ratings for the Kentucky Derby, Preakness and Belmont Stakes and, perhaps, for the bigger crowds at those races.
Individual tracks have come up with all kinds of strategies.
Some have, with state permission, added slot machines or video lottery terminals. Others have gone for entertainment. Gulfstream Park near Miami has concerts featuring bands with youth appeal, like Big Bad Daddy. Some, like The Meadows in Washington County, hold Comedy Nights; others have flea markets -- even dog sled races.
The owners of Mountaineer Park in Chester, W.Va., have turned the thoroughbred track into a full-service resort. Besides slot machines and simulcasts from numerous tracks, Mountaineer offers a hotel, a convention center, an 18-hole golf course, boxing matches and concerts. The company's land holdings have grown from 600 to 2,000 acres, and President Ted Arneault, major stockholder in the Mountaineer Gaming Group Inc., said development of that acreage to include shopping and tourist-oriented businesses will continue.
Most tracks don't have room for that kind of expansion, but the addition of slots has led to major turnarounds in the fortunes of tracks in several states and Canada.
Convenience wagering has helped some individual tracks as much as it has the national handle. Conversely, it has contributed to deterioration of others. Fans spread throughout the nation can now enjoy watching and betting the sport's best horses at the top tracks -- Saratoga in upstate New York, Belmont in New York City, Hollywood Park in Los Angeles, Del Mar in California. Sometimes that hurts the less glamorous local product because horsemen get smaller pieces of convenience wagering.
State tracks want help
A good example of how convenience wagering and slots can affect a track is The Meadows. The harness track was one of the first to show big gains from convenience wagering in the mid-'80s to mid-'90s. Now it is losing ground -- in part because other tracks have caught up by getting permission for convenience wagering from their states, but primarily because of the slots at Mountaineer and Wheeling Downs, a greyhound track, Meadows officials contend.
Mountaineer is booming; as are its horsemen and women and related businesses. Since the first slots were installed in late 1994, purses, or the money paid to the top finishers in races, have increased from an average $15,850 per racing day in the first quarter of 1994 to $128,935 per day in the fourth quarter of 2000. Over the course of this year, the daily purses have increased to $160,000. This year, the purse of Mountaineer's jewel race, the West Virginia Derby, was raised $200,000 to a half-million dollars and will climb to $600,000 next year. The humble-looking track now is regularly drawing horsemen from highly regarded tracks such as Churchill Downs and Keeneland.
The Meadows wants very much to get in on the slot action and reclaim the southwestern Pennsylvania bettors it says it has lost to West Virginia. So do Pennsylvania's other three tracks: the Downs at Pocono, another harness facility, and Philadelphia Park and Penn National in suburban Harrisburg, both thoroughbred facilities. Those tracks are affected by gaming in Atlantic City and slots in Delaware and, soon, in New York, where they were legalized this fall.
New York's law has the potential of putting as many as 20,000 additional slot machines within 60 miles of Pennsylvania borders, according to Tom Kauffman, executive director of the Pennsylvania Horse Racing Association, which represents the state's horse tracks.
"The playing field has been significantly altered. [Neighboring states] have a financial advantage," Kauffman said.
"The industry's struggling [in Pennsylvania]. Handle, attendance, purses, quality of racing are trending down. The purses are only half of our competition's."
For example, he said, the Downs at Pocono offers daily purses of about $48,000; the Meadows is about $60,000. A Delaware harness track with slots, Dover Downs, distributes average daily purses of $150,000.
As a result, he said, many horsemen are taking their horses to the other states, which has the effect of making Pennsylvania racing less attractive to fans and bettors.
Legislators have tried to help the industry, which directly or indirectly employs nearly 7,000 full- and part-time workers, according to an economic study by The Institute of State and Regional Affairs at Penn State-Harrisburg. The study was commissioned by the tracks.
Bills to legalize slots in Pennsylvania have failed four times, in 1996, '97, '98 and '99. State Rep. Thomas Petrone, D-Crafton Heights, has introduced a bill that would allow slots if approved by local vote, earmarking a portion of slots revenue for lottery-funded seniors programs.
Gov. Mark Schweiker has indicated he will not support expansion of gambling without statewide voter approval.
Get them in the door
Industry analyst William Shanklin, a Kent State University professor of marketing and entrepreneurship, believes slots are useful but not the entire answer for racetracks with flagging attendance and an aging audience.
"It's not going to be a panacea for all tracks, but it will reinvigorate," he said. "You still need good product and service. Mountaineer offers a high level of service and a clean environment."
Shanklin did say he thought slots would work well for The Meadows, in large part because of its location.
Mountaineer chief Arneault also believes slots are not the complete answer.
"One of the basic premises of looking at an asset is how do you get maximum utilization," Arneault said. "With any racetrack built from the '20s until recently, they are very large facilities with large grounds geared to entertainment four hours a day, four days a week. The rest of the time they sit unused. Looking at racing, looking at all sports as a whole, almost all have gone to multipurpose facilities."
David Wilmot, head of Woodbine Entertainment Group in Ontario, agrees with Arneault, even though slots have led to huge purse increases for horsemen at Woodbine and sister track Mohawk.
"We believed the slots would allow us to try to convert slot players over gradually to racing," he said. "We're slowly making headway."
Whatever the methods, more work is needed if racing is to add a young people to a fan base the NTRA says is mostly 35 or older.
"I don't think there's any question we're still behind. I think we've also made great strides in just the last decade of the 20th century," said the NTRA's Chamblin.
"My own thought is that if we can expose our product to enough people on a regular basis ... at some point we might just be in a position where a small percent of the population might want to check out the live product. If we do, we could see attendance grow."