A recent study by research firm IBIS World ranked the Top 10 Dying Industries in the United States. Each of them have suffered massive declines and continue to face rapidly increasing weakness.
I suggest that the harness racing industry pay close attention to this list, and recognize that the sleek new freight-train we hitched our wagon to — slot machine and casino facilities — may not carry us as far as we think.
Looking at the list of dying industries, virtually every one of them has been supplanted because the customer has been given a better way of receiving a benefit or product.
Wired telecommunications carriers have been supplanted by wireless and Internet providers. Mills, apparel manufacturers and formal wear providers have been replaced by cheaper foreign imports. Newspaper publishing, game and video rental, video post-production, record stores, and photofinishing have all been replaced by the ability to access these services from a computer or wireless device. Manufactured home dealers is the only industry on the list where the decline is related to a real decrease in demand — in this case, because of recent economic troubles.
Horse racing, to its credit, has made some inroads in the at-home market, with satellite, Internet, and wireless wagering now widely available. For our sport, the huge challenge is to improve the business model and increase demand — a tough challenge.
But the reason this industry is doing little about increasing demand is its reliance on bricks and mortar slot machine, VLT and casino facilities. It may not happen today, my friends... but the time will soon come when these massive gaming parlors become prominent on this list of dying industries.
Currently there are more than 1600 casinos in North America, and estimates peg the number of slot machines at more than 750,000 in the United States alone. As states like Ohio, Illinios, Maine, Massachusetts, New York and others get further into the game, the numbers will continue to climb.
In a 2010 Businessweek article, Gary Loveman, the chief executive officer of Harrah’s Entertainment (the largest gaming corporation in the world, and the owner of several racino facilities) said, “Harrah’s makes more money from elderly slot machine players than any other demographic in the casino — even the high-rolling millionaires casinos traditionally spent fortunes luring and flying in by private jet.”
As horse racing relies on a bricks and mortar business that is very expensive to operate, and is largely supported by elderly customers, others are working on sleek, low cost online platforms, wireless casino applications, wagering on video games and in-home solutions.
Virtually every lottery corporation in Canada now has either a legal online gambling site or plans to launch one in the coming months or years. In the United States, legislation is likely on its way to pave the way for Internet gambling south of the border as well. Unless something changes, horse racing will be completely cut out of this market.
When evaluating the racing career of a horse, there is a beginning, an upswing, a peak, and a decline towards retirement. The same goes for certain industries that fail to reinvent themselves. Sometimes you need to give your head a shake and invest your money into a green two-year-old over a really talented 12-year-old — before it’s too late.
Top 10 Dying Industries in the US
Wired Telecommunications Carriers
Mills
Newspaper Publishing
Apparel Manufacturing
DVD, Game & Video Rental
Manufactured Home Dealers
Video Postproduction Services
Record Stores
Photofinishing
Formal Wear & Costume Rental
*IBISWorld Study
By Darryl Kaplan [email protected]