Wednesday, August 17, 2011
SARATOGA SPRINGS, NY, August 17, 2001--Some interesting data came out of last Sunday’s annual Jockey Club Round Table on matters pertaining to racing.
To no one’s surprise, most of the news was not good, and neither was much encouragement offered that these matters would change for the better anytime soon.
All anyone’s been talking about recently with respect to betting handle is that the drop since 2010 has been precipitous; 25 percent.
But what shocked most observers, myself included, is that this number grows worse if you extend the study to a time when handle in this country reached its zenith.
However, it’s more alarming when one considers that projecting out to the end of this decade, handle can plummet by as much as 44 percent off the highs of 2003.
Most people anticipated that there would be some more pain before things got better. It now appears that it will be a long, long time.
Not all of it is attributable to the fact fans are walking away from the sport. But according to research findings that‘s exactly what fans are doing.
Five percent of racing’s fan base walked away from the sport in the last 12 months. But there was a glimmer of good news during this period.
New fans were created at a 3 percent rate, an indication the product is good enough, interesting enough, to attract a new group of people. This is a hopeful sign that good things are still possible.
Remaining fans are betting less, or so say 16 percent of those polled. But nine percent are betting more; interesting and surprising considering pool liquidity just doesn’t exist to provide the kind of value that can make small winners out of small losers.
The reasons for the decline are three-fold: 57 percent say that present economic conditions has effected their amount of play. Twenty-three percent expressed a fear that they may lose too much money.
But the interesting statistic in this category is a bit alarming--and for that the industry has only itself to blame. Twelve percent of fans wagering less money today because they are concerned about past posting.
That’s a big percentage considering the issue, especially since this could have been avoidable had the industry invested in the kind of software that makes real time betting a reality.
Clearly, bringing the tote system up to speed is a very expensive proposition. But the wonder is whether that the 12 percent who are betting less might have maintained their level of play if they had unwavering confidence in pool integrity.
Thoroughbred racing has lost customers to other distribution outlets, the study citing those such as greyhound tracks and other net importers of the Thoroughbred signal.
And, of course, there’s no way to truly measure how much has been lost to offshore bet shops offering sizable rebates, many of the biggest bettors recouping as much as eight cents on every dollar wagered.
When segments of the industry push back against lowering parimutuel takeout, if fails to realize that a lower rake is a rebate for all.
Otherwise, how can any competitor go up against that kind of an edge the rebate shops provide?
The study also cited something called “acceleration of negative feedback” as another culprit in the downturn of interest and wagering: News about the declining foal crop, the shrinking number of starters, and the continued decline in handle.
This hastens the downward spiral; thus becoming a self-fulfilling prophecy. All industry leaders need do to reverse this “negative feedback” is to make wise decisions that results in “positive publicity” It’s not impossible.
When considering some of the declines noted above, it would appear only natural for handle to decline so dramatically.
The number of race days has declined by 14 percent since 2000; the number of starters has declined 23 percent in the last two decades.
Of every four horses entered to run in any race, any day, on any track in America since 1990, now there are now three.
Unfortunately, that negative figure will continue to grow in the immediate future. Next year’s foal crop is projected to reach only 24,700. A decade ago, that number was more like 35,000.
TOMORROW: Some Possible Solutions