Friday, December 12, 2008

HANA 2.0 - Invest & Reinvent

It is no secret that with more and more gambling, a 500 channel universe and high takeouts, racing has not been doing well the past while. Many people have spoken about a wagering crisis and it appears that there is, but with a plan for the web it may be possible to reverse these trends. The Internet is something that can be used to our benefit, just as we spoke about in Part I of the series. But it does not happen by itself. The super-highway is littered with company carcasses who believed that they could win at the game with a few dollars of venture capital and little more.

Just how is racing on the web doing, compared to other sports and gambling games?

Google is considered what racing is unfortunately not - innovative, customer driven and fresh. They try more and more new ideas, and put ideas into practice at laser-speed. A neat tool that they have is Google Trends, where they show off what customers are searching for and what the trend is. With Google Trends we can compare side by side search trends and popularity of different brands, celebrities and more. Using this tool for racing might open our eyes to what is happening out there.

To show how this works, here is an example or two. Here is the Google trend for "Facebook". We all know what that is, and how it has come to prominence. This should show this well.

Ditto for Youtube.

Now let's go racing. Here are the trends for horse racing itself:

It is trending downwards, despite some online news mentions and hundreds of millions of new broadband users. I think it is important to note that the countries of Ireland, the UK and Australia search for it more - much more - than in North America. We clearly have some work to do; but there is obviously plenty of upside.

How about slot machines? Not a surprise that it too would trend downwards. It would also not be surprising at all that in ten or fifteen years this slots boom will be a shadow of itself. There are some signs that the market is getting saturated, and we are dealing with an aging demographic as well. Even racing insiders are starting to believe that slots will not save racing.

Let's now see how horse racing is doing relative to poker - our main competition as a skill game

Poker in terms of searches is 1520% more popular than horse racing. I would submit that decades ago, this trend would have been a mirror image. Poker is not a new game; a century before the first Kentucky Derby it was being played. It is an old game.

Next we'll have a look at online betting giant Betfair and how they have built their brand through targeting gamblers who are price sensitive and by delivering racing to that market in a fun fresh way. Here is horse racing relative to Betfair.

That is pretty amazing. The term "betfair" is searched for more than horse racing is. You do not see a brand name searched for more than a sport very often.

That is an important lesson about how the Internet works for sharp companies who are competing in the 2.0 world. Poker is beating racing badly, and it is simply a mind game just like racing is. Poker never had a monopoly, was never protected by regulations, was never the only game in town. But it reinvented itself, both online and off. Betfair has beaten pari-mutuel or bookmaker betting in the Internet world, as well. They just started eight years ago and grew by offering UK racing by repackaging how they offer it for the hungry 21st century bettor. Poker brought the game to offices and bedrooms online, and Betfair did the exact same thing. Here is the chart on Betfair alone. Notice the trend? Compare this to the stock charts of some of our ADW's and tracks.

Clearly we have some major work to do. Some of the things happening are a start. But we are serving a meal that tastes pretty bad. We all know (it is sinking in with the handle losses) that we are not a lottery, or a slot machine, and those people are not our customers. We all know our pricing is too high for the Internet user. Racing is a skill game and it has to be packaged and sold as exactly that: A skill game that can be beaten, just like poker sells itself.

We are not seeing the thought and narrative change that we need to see, however. We need to be scared of these trends. We need racing to invest in the game on the web, and kickstart racing as a game that anyone can play online. We need both a marketing plan and an ADW plan to work hand in hand. We have to package racing as a 2.0 business - build a sport and a game that fits the Internet, not the other way around. Fans will not fall all over themselves to play our game. It takes work.

We are not Facebook, YouTube, or Betfair. But that does not mean we have to give up. We can work towards being like them. If there is a will, there is a way.

Lend us a hand, won't you? Please sign up for a HANA membership. It is free and confidential.

Special thank you to for supplying the graphics for this piece.


Anonymous said...

How did these things pass us by so quickly? It is amazing how far behind we are.

Anonymous said...

A very informative study here. Well done.

Anonymous said...

as always, great stuff

Pull the Pocket said...

That picture looks like my dorm room way back when. Only much cleaner.