Slots, Slots, Slots… Why Does Horse Racing Continue To Build Itself a House Of Cards?

DecouplingUnless you’ve been hiding under a rock since Christmas, it’s no news that for the past several months, Florida horsemen have been in a state of understandable panic about the future of thoroughbred racing in their home state due to potential “Decoupling”. What the full extent of the impact of decoupling on racing, through subsequent reductions in revenues for purses and racetrack operations, may ultimately turn out to be, is scarily unknown. Most believe that it will potentially see horse racing in Florida become a mere shadow of its former self. As betting handle, casino revenues and purses drop, many horsemen may go out of business at worst, or move their horses elsewhere at best.

Decoupling bills have failed for now, but will no doubt be back in the not too distant future. Thoroughbred racing’s casino bedmates are restless, and now they want out.

But wasn’t “Coupling” a ridiculously short sighted and dangerous idea in the first place? The arranged marriage of thoroughbred horse racing and slot machine operators was surely never destined to be one that would last. While initially both parties were mutually beneficial to each other, and of course agreements with racetracks were in many cases necessary for slots to become licenced, legalized and operate in the first place, divorce was surely always going to come. As soon as the gold digging casino operators had their feet parked firmly enough under the table to be able to survive without having to deal with and attend to the horses and horsemen they used to get in business in the first place, they were going to make a play to legislators and government for a case to leave those horses and horsemen behind.  

slotsTo make matters far, far worse, as racetrack operators and various thoroughbred industry beneficiaries began to get (temporarily) fat on the run off revenues from casinos and slots, they got lazy too. They let themselves go and took their eyes off the business ball. They paid little attention to the quality of their racing product and their customers’ racetrack experience, as their customer base and their racetrack business eroded. Rather than focus on using this opportune financial time to build their racing product and their business up for the day when the slot revenues and support might not be there anymore, racetrack operators chose instead to lie down on their backs and bask in the sun. As if it was never, ever going to go down…

So to today. Now we have the nightmare in Florida, which will be only the first of several other racing states, who set up casino deals, that will have this coming. You could be forgiven for thinking that the lesson would have been learnt. Yet the coming day of reckoning in Florida apparently has not stopped New Jersey racetracks trying to jump on the casino/slots bandwagon.

As reported recently, New Jersey racing is now currently lobbying for a percentage of revenues from the expansion of casinos in the state, and installation of slots at The Meadowlands. A move which they apparently see as necessary to “save” racing in New Jersey.

AmercanPharoah“Save?” While thoroughbred racing is in poor shape in some states, and is obviously not as popular as it was in days gone by, there is cause for optimism. Monthly average betting handle across the USA is actually up on 2015 so far this year. But the path and the solution to seeing thoroughbred racing thrive again is not to seek out short term, hand out, revenue streams from “partners”, such as casino and slot machine operators, harboring ulterior motives and no genuine interest in horses and horse racing. To do that is simply to build a house of cards, as Florida has found out.

For horse racing to survive and thrive, there is only one way to do it. Alone. It must operate as a standalone business. If it cannot survive and thrive on its own feet, like any business, in the long run it won’t survive at all.

In the normal world of commerce, if a business needs improving, if it is failing to turn a profit, a smart business owner looks to solve their problem by:

— Improving their product to make it as good as it can be.

— Adjusting pricing to provide recognizable value for money.

— Focusing on providing a great experience for the customer to ensure continued repeat business.

— Aggressively, thoughtfully and continuously marketing their improved product to maintain and expand the customer base and build a loyal and sustainable following.

These fundamental business basics are what US horse racing and racetracks should have been practicing for the past twenty years. Yet sadly, anyone who pays a visit to their local racetrack can see only too clearly that not one of these four basic business initiatives has been genuinely or properly implemented in the past two decades. If racetracks and horsemen had tried as hard to push these four business basics in the past twenty years as they have tried to stop decoupling in the past few months, decoupling would not be a problem. Horse racing’s own core business would be thriving without any need for handouts from other sources. 

Horse Racing 2015: Travers Stakes Scene AUG 28It’s not too late. There is so much that can be done – that is not being done – to turn things around.  While gambling and owners fund the business of course, the amazing sport of thoroughbred racing is so much more than slot machine or casino gambling. How does the sport try and get this truth across to people who don’t know it yet?

As a general rule, people who “don’t get horse racing” generally don’t “get it” because they don’t “understand it”. Almost anyone who receives the education and opportunity to understand horse racing really cannot help but to enjoy and follow the game. Horse racing fans are fans for good reason. We just need more of them.

Those new fans are out there. And they can be found, if racing and racetracks decide to get their act together and improve and market their product – which is horse racing, not just gambling – instead of turning their backs, as they rely on temporarily lucrative, but inevitably doomed revenues from slot machines and casino operators. 

— Carl Wilson

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