As internet use exploded during the late 90s and people grew accustomed to web-based commerce, online wagering platforms entered the market. It was horse racing’s chance to leverage its online wagering monopoly under the protection of the Interstate Horseracing Act.

Simple and consistent state by state wagering rules could’ve been used to establish online wagering on horse racing as a reliable, secure, and safe alternative to dodgy offshore internet wagering sites. A tagline of “US-based, licensed, regulated, safe and secure” with quality racing content from across the country would have played well. The industry should’ve jumped on this like a hobo on a ham sandwich, but it didn’t.

Why?

1) FEAR – in a way, it was a replay of the 1970s in which racing stiff-armed televised coverage of horse racing events for fear it would hurt on track attendance. Live game coverage was embraced by its peer major league baseball and relative upstart, pro football; and well, you know the rest. Specifically, track owners viewed internet wagering similar to simulcasting which allowed horseplayers to bet on races around the country from their local track or OTB. Simulcasting appealed to horseplayers wanting more variety and the ability to bet the top tier tracks in California and New York, but it depressed on-track handle at mid-tier and bottom-level tracks.

To this day simulcasting is viewed as a key reason on-track handle nosedived. So instead of pursuing internet wagering with gusto, it was treated with caution.  Why take a chance courting internet players for the fear of hurting on-track handle. For track owners this made sense as getting their full cut of the takeout from on-track wagers was better than splitting the takeout with the wagering provider (AKA the Advanced Deposit Wagering company).

2) STUPIDITY – the industry didn’t really believe a robust market existed. Because racing was becoming less and less popular with an aging demographic, providing a dwindling fan base with a more convenient (and costly) alternative made little sense. As a consequence, the battlefield was ceded to poker sites who not only locked in current players, but created millions of new poker players through mainstream marketing channels.

3) GREED – track owners focused on the BIG money – expanded gaming – and turned their tracks into slots packed “racinos” while turning their backs on the horseplayers. Expanded gaming was essentially a life preserver for small tracks that lost handle due to simulcasting. It could be deemed “successful” as it kept tracks such as Penn National and Charles Town from closing (and employing thousands of racetrack employees and backstretch workers). However, it also diluted the racing market in which there are too many races with too few bettors to legitimately support.

A consequence is that purse subsidies from once failing tracks started cannibalizing successful circuits by drawing horsemen (and wagering handle) away from more successful tracks to chase easy purse money. To survive, nearby tracks had to add slot machines which led to a racino “arms race” that is still playing itself out. What the racing industry (the non track owning part of the industry) have yet to figure out is what happens when track owners get tired of subsidizing the money-losing part of the operation (i.e., the racing operations) and ask the state governments, who are drowning in debt, if they can shut down the tracks and divvy up the extra revenue.

And lastly, and most importantly:

4) THE TRIFECTA – FEAR, STUPIDITY, and GREED combined -  infighting over revenue splits and self-defeating (and confusing) state by state internet wagering legislation frustrated horseplayers that actually wanted to bet over the internet. The biggest offenders are Arizona, California, New Jersey, West Virginia, and my home state, the Commonwealth of Virginia. For example, fearful that internet wagering would hurt on track wagering, Arizona outlawed internet wagering altogether. This strategy proved ultimately proved self-defeating. Virginia gave into greedy track owners and horsemen by enacting humongous source market fees (totaling over 11%!!) that cover the entire state. For example, I live 1 mile from the DC border and 3 hours from Colonial Downs, yet Colonial gets a source market fee from my online wagering despite the fact that the tracks I would most likely frequent are Laurel (30 minutes away), Charles Town (60 minutes away), or Pimlico (70 minutes away). California enacted huge licensing fees that stifle competition and source market fees which prohibit rebating of horseplayers. New Jersey mandates by law that their residents must use a state sanctioned platform (NJ Bets) that most consider inferior to even the worst products on the market. Residents in West Virginia can’t bet on race tracks located in their state, even if they live several hours away – lunacy!

And don’t forget the “signal wars” that erupted a few years back that forced horseplayers to switch from ADW to ADW to bet their favorite tracks. Many bettors quit playing altogether as frustration and anger turned to apathy.

HANA President Jeff Platt brought attention to this topic in a recent article on the HANA blog. He was responding to a comment from the aptly named “Rewards” on the Paulick Report which alluded to the dubious nature of the TrackNet consortium (which was disbanded). Of course, the companies that owned & operated TrackNet are still around and you can draw your own conclusions as to whether they are good for the sport.

A sport that could use a shot in the arm, or maybe a kick in the ass.

Was it the decision not to broadcast races on network TV, the spread of state lotteries and Indian casinos, endless industry infighting, changes in demographics, or even the relaxation of clubhouse dress codes as this writer suggested?

Regardless, the most pressing question is whether or not racing can ever recover?  I believe it can, but it requires total commitment to the core product of horse racing.

Instead of focusing on horse racing, in the sprirt of “if you can’t beat ‘em, join ‘em,” tracks are pursuing slot machines with reckless abandon.  And why not? They provide a steady stream of revenue, and for many tracks, a lifeline.

But the “racino” revolution caused a crack cocaine-like epidemic within the industry.  Profits haven’t created more racing fans and bettors, only more racinos.

While tracks spent millions building slick casinos, horseplayers were relegated to crowding around faded TVs in a neglected corner of the track to bet the races.  Tracks simply replaced one group of gambling degenerates with another, because they’re all the same, right?

Wrong.  The Horseplayers Association of North America (HANA) membership poll indicates their supporters are generally well-educated and, you might assume, have high incomes as well.  I’d wager your average horseplayer represents a more appealing customer than the average slots player.  A target market with expectations for quality, customer service, and unlikely to frequent tacky slots parlors or “all can-eat” buffets for that matter.

However, racinos are the new reality.  In most cases, slots machines & poker rooms are the difference between a race track’s profitability or bankruptcy.  And as more and more states legalize slots, it’s spawned an arms race of sorts.  For instance, fearing slots in neighboring Maryland, West Virginia approved table games and Delaware approved sports betting.

Where does it end?  Perhaps with states legalizing every possible casino game imaginable.  For state politicians facing overwhelming state budget deficits, raising money through legalized gambling is more palatable than raising taxes or cutting services.

Given this situation, you must wonder if anyone in the horse racing industry truly believes in its own product?  Yet for horse racing to become a viable and vibrant sport again, re-focusing on the core product is essential.

Horse racing is a great game, I believe the greatest.  But it’s not the easiest for newcomers to appreciate, or even understand at first.  In order to grow, racing must become more customer-friendly and accessible.

However, with a neglectful industry in disarray, horse racing is adrift. Those most likely to still believe in horse racing’s product–the horseplayers themselves–are the best qualified to spark its revitalization.

To that end, I’m creating WirePlayers.com - a boutique, customer-focused ADW site that will feature a first class internet wagering platform. Admittedly this is only a small step, but I hope one that’s in the right direction.  While I can’t guarantee success, I can say with certainty that WirePlayers.com is betting on horse racing.  Is anyone else?

“We are the ones we have been waiting for” – it gets to the heart of something that’s been bugging me about the state of racing, and the racing industry, for a long while now.  There are millions of racing fans and horseplayers out there who are die-hard followers of the sport.  And most of them are pissed (it’s true, read about it here) about the sport’s current state of affairs.  However, the simple fact they haven’t completely abandoned the sport altogether demonstrates how great the sport is and their dedication.  This is a powerful resource that should not be underestimated.  Furthermore, the “racing industry” tends to take horseplayers for granted and lump them into a generic category of habitual gamblers.  This is particularly insulting as horseplayers are on average more intelligent, sophisticated, and passionate than your everyday casino denizen (especially compared to slots players).

Furthermore, there’s been endlesss discussion, hand-wringing, blog-posting, meetings, symposiums, summits, and so on and so forth about what is going wrong in thoroughbred racing.  Everybody and their mother knows things are bad and change is needed, the only point of contention is where to start first: the inconsistent medication rules or the lax enforcement?  The excessive takeout or the poor customer service?  The ineffective marketing or the need to do better PR?  And don’t even get me started on industry fragmentation and infighting (“ADW signal wars” anyone?).  Not to mention its less than stellar record on support for thoroughbred retirement and backstretch workers, and the industry’s apathy toward the issue of equine slaughter (except Suffolk Downs!) are not helping its PR issues.  The list of problems goes on and on.  Everyone wants to figure out who is going to clean this mess up?  Some have called for federal intervention and/or the establishment of some form of “racing czar,” however,  this may lead to a case of “be careful what you wish for.”

Instead we have to quit sitting on our hands waiting for someone else to come along and solve these problems.  The people and organizations that are in charge, whether they have good intentions or bad, whether they are competetent or incompetent, are only going to keep doing what they’ve always done.  And what they have always done is to protect their turf and pursue their own self-interests to the detriment of the sport.  We are the ones who must drive change.  It’s up to us to make the things better.  The efforts of HANA to create a grassroots organization to engage the industry and lobby on behalf of horseplayers is a great example.  I believe we can take it to the next level.

Wise words indeed.  In fact, the elders’ philosophy aligns closely with the objective of this site - self-empowerment, interaction, participation, cooperation.  As everyday brings another bit of bad news, it’s finally time to stop waiting around for someone or something to “save” racing.  It’s time to act.