Mitchell: Racing Has To Adjust Its Business Model

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In a report discussing the future of the Ontario horse-racing industry, Western Fair District chief executive Hugh Mitchell has gone on the record as reiterating that he believes it is best for the provincial horse-racing industry to refocus its business model in 2013 amid a period of forced contraction.

Mitchell's comments have come in an article by The London Free Press. In the midst of what the majority of provincial horsemen are referring to as the Ontario industry's darkest hour, the veteran raceway administrator is looking at 2013 as an opportunity for the industry to adjust its out-of-date business model.

“I see us getting to the point where there are fewer tracks," Mitchell said. "The (financial) model we now have is decades old, it is outdated. I am bullish on the opportunity that lies ahead, but the industry needs to contract (to survive).”

Later in the report, Mitchell referred to the fact that the industry must become more reliant on pari-mutuel handle. He stated that the handle reliance would 'right-size' the business, which he states must become "more consumer-driven."

(With files from The London Free Press)

Comments

Well "said" Mr. Poteck. I wish I had thought of it!!( Actually I wish the Industry had thought of it years ago and it would not be in the position it is today!!

Tying handle to purses does not make the industry customer driven! The correct term would be that purses will become ‘demand driven’. There is a big difference between ‘demand driven’ and ‘customer driven’.

A true customer driven model is one that can identify its target market, has the ability to understand and meet the target market needs, builds loyalty and creates identifiable value.
Horseracing in Ontario has failed miserably on all accounts. The first step to correcting the problem is to understand the term. The next step is to address it.

Year in and year out of the SARP the horseman's 10% went back into the economy via purses. The breed improved, better stallions,broodmares and yearlings. Infrastructure improved training centers were built...Can someone tell me what happened or where the track owners 10% went ??? Was it in advertising, building better facilities ? just saying.

If handle is your only standard to 'right-size'the industry, when the lowest handle tracks close you become the bottom and the next to 'right-size' out of business.

People talk about "downsizing" and "remodelling" the racehorse industry to fit the current market but they don't give breeders and owners the appropriate time to adjust to these changes. We are dealing with living, breathing animals--not motorized vehicles--that, through no fault of their own, have become a glut on the market as we now see it and into the future. How is this fair to anyone-- especially the horses? The industry encouraged us to breed and so we did. Now we are trapped.

Mr. Mitchell has been talking about focusing on the consumer (bettor) and relying on pari-mutuel handle for a while now.

He has 21.4% takeout rates on WPS, 26.3% on Ex-Sup-DD, and 28.3 on Tri's. Those rates are tough on existing customers while discouraging any new customers from ever even getting involved.

Pari-mutuel handle can not be relied upon with those takeout rates. Shouldn't Mr. Mitchell at least attempt to lead by example?

The industry is in such a sad state when solutions to the problems are talked about but the person talking about them has the power to do something.

I agree with Hugh Mitchell that the industry needs to change but I would like to ask every racetrack operator and executive of racetracks the million dollar question. Are you willing to tie your revenue or personal paycheque to a model that relies on increasing pari mutuel handle? Because all horseman and breeders are asking for is that everybody in the racing industry drinks the same medicine. If Western Fair is compensated for running a casino and 90 percent of their revenue comes from casino then the disconnect that has plagued this industry for the last 10 years will continue it will just be half the size.

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