Panel On Change: Horse Racing is Doomed
Published: October 13, 2009 5:30 pm ET
Last Comment: October 19, 2009 2:34 pm ET | 20 Comment(s) | Jump to Comments
Jeff Gural, the owner of Vernon Downs and Tioga Downs, gave an audience of simulcasters a sobering wake up call today when he stated, “It’s so logical that the sport is going to die.”
Gural, speaking on a panel titled, Change —You Can Run But You Can’t Hide at the International Simulcast Conference in Saratoga Springs, NY, said that racetrack lobbyists who recently fought together with horsemen for slots at racetracks will soon lobby governments to eliminate racing from racetracks.
“Once a racino opens, that casino company looks at racing as a loser,” said Gural. “You’ll see the lobbyists of those track owners in the legislature trying to convince government to take the money back, allowing the racinos to get rid of racing.”
“Participants in the horse industry don’t get it but they’ll learn soon,” said Gural. “The horse industry doesn’t want to do anything to help themselves. The horse industry is very happy to be a welfare recipient. They believe somehow that they are entitled.”
Gural, who says that he himself as a horse owner will continue to fight for horse racing, pointed to racing’s failure to give fans and bettors what they want.
“It’s very unlikely that horse racing will voluntarily undergo any change,” he said. The industry is dominated by the breeders for some reason – I don’t get it. Unless the breeding business collapses any further, there won’t be any change.”
Eugene Christiansen, the Chairman, Christiansen Capital Advisors and an ad visor to governments and the racing industry, echoed Gural’s comments.
The chances of change are slim to none,” said Christiansen. “Racing as an industry is more resistant to change than anything we’ve ever dealt with.”
“If I’m right, there won’t be voluntary change,” he said. “That will mean economics will dictate involuntary change – fewer racetracks, fewer opportunities to race and the end of any prospect for the rejuvenation of the fan base. If the fan base can’t be brought back, the sport will die.”
“The fundamental problem is consumer pricing,” he said. “The amount of money taken from bettors is not sustainable. The racing industry has been extraordinarily resistant to change even if someone creates an innovative product. Betfair is a very good example of voluntary change in the global betting business. No one in the racing industry really understood what a betting exchange was. But it worked to grow the business.”
Both Gural and Christiansen called racing’s business model doomed.
Eric Johnston, Vice President of Racing, Sam Houston Race Park in Houston, Texas, gave an example of why the business model which gives horsepeople a large percentage of wagering revenues, is counter-productive.
“For years we ran promotions to get people out to the track,” he said. “We’d increase attendance by 50% and handle by 50%. When we analyzed the numbers, we realized we’d have been better off to hand every person a $10 bill at the door and tell them to go home.”
“The problem that needs to be addressed is how to recruit more consumers into this industry,” said Christiansen. “If the industry fails to reach new customers, 20 years from now, all the lights will go off. This takes wholesale change, competitive pricing, new products and pain for a lot of people, including purse levels that may decrease by 50%.”
The International Wagering Conference wraps up tomorrow.