Tuesday, May 5, 2009

Racing in 2050? Will it be here?

In an entertaining and well-written article, the problems of racing are looked at. The premise of the article is an older gentleman sitting with his grandson, playing the harness races in the year 2050 in Canada. In case one it shows what happens to racing by 2050 if we cling to the status quo. In case two it shows what can happen if the industry gets together to lower takes, invest in new technology and more.

It is very eye-opening, and cuts-to-the-chase about the future of horse racing and what we need to do now to ensure its longevity. This goes hand in hand with the panel HANA sat on for the "Future of Wagering" at the recently concluded Wagering Conference at Caesars Windsor (it is from the same trade magazine that invited us, and many of these issue we spoke about on the panel).

I do not think this is too strong a piece, nor do I think we should be convinced this can not happen to a large part of the sport. In 1968, dog racing in New Hampshire had record crowds and record handles. 40 years later it has been banned.

Some snippets (if you find them thought-provoking please give the article a whirl)

From the "if we do nothing" case:

“There were some, but not enough. The tracks never really did get it,” Greg says, his voice beginning to soften.

“Around the mid-20s when the simulators got really big, racing had no way of coping. By the early 30s, IRSL, the International Racing Simulation League, was offering a guaranteed $5 million pool every race. Not much compared to online video game betting these days, but still pretty good.

“Picture it: there I am in 2030, in my 50s, supposedly saving for retirement, and the track is charging me 12 per cent on every bet I make. Amazingly, around the turn of the century they were still charging more than 20 per cent. The simulators were taking pennies on every dollar bet with races every minute on the minute. The technology was there to recreate real form cycles and produce comprehensive data, available for free, without having to wonder about drugs or whether a horse was really in-to-go or just tuning up for a bigger race.

“At the track, they still had something called pari-mutuel betting. You’d bet on a horse and then when the race was run, you’d get whatever odds he was when betting stopped. The whole world figured out other forms of betting, except for us in North America. We got shoddy, unpredictable odds and the Canadian tracks had tiny betting pools.

“The industry thought that they could build the sport back to greatness by encouraging breeding and ownership through investment into purse money. But all that happened is that an increasingly smaller group of people kept all the money and continued to take from the game. The breeders made money, owners made money, drivers, trainers, vets, industry associations – they all took money out. Who was supposed to put the money in?

“For a while there, the government paid the bill through a percentage of slot machine revenues but that gravy train quickly ended.

“Decade after decade, the sport failed to resonate with the public. Star horses retired and were shuffled off to stud before anyone knew their names.

“When the Canadian government legalized sports betting at tracks, sure purses went up again, like we saw when slot machines were introduced. But racing only suffered. Why bet a horse when you can bet tonight’s hockey game? All over the world, gambling was growing. The flood gates were opened and it was only a matter of time.”

What if we invested in new things, lowered takes and brought racing into the new century with vigor? Here is that case:

Racing just isn’t the same today,” says Greg. “I remember when the sport was grassroots. People were involved in racing because they loved it. Now it’s all big businesses with sponsors and celebrities.”

“It’s called progress, Grandpa.”

“What’s happened to the younger generation?” snorts Greg. “All this technology was for you. With the quality of holograms today, I can watch races in my living room from every track in the country. My Personal Betting Assistant places 2,000 to 3,000 bets a minute by buying and selling positions on horses. I ask the computer to evaluate Return on Investment stats for every horse over the last 20 years for trainers with 25% win averages, and it tells me exactly what bets to make and makes them for me.

“I request to buy any position at 20-to-1 or higher and sell any position at 18.8 or lower, staying within my bankroll. It’ll bet every track in the world instantaneously if I want. If you ask me, it’s a flawless retirement strategy without having to fight the crowds. If only we can convince the track to drop takeout. They take one-quarter of one percent off the top of every bet! It’s robbery.”

“You have to give racing credit,” says Greg, ignoring his grandson. “Horse racing was almost dead 40 years ago. The vultures were circling, governments were poised to start taking back slot money and everyone was fighting for their share of the pie.

“But somehow, miracle of all miracles, they sat down and began to do things right. A Commissioner’s office was formed and was well funded. All race office activities were centralized and managed in one place.

“Today purse money is pooled and distributed based on customer demand. Eighteen to 25 horse races are the norm. And the motto, ‘life changing payouts every day’ only came about in the 30s. Years before that, you’d be lucky at a shot at a decent payout once or twice a year.

“The first North American betting exchange was approved around 2017. Within three years, players were matching billions in bets. There was betting during races and handheld devices made it that much easier for on-track participants.

I found this piece fascinating, and I hope you did too.

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