Anyone who cares about thoroughbred racing — from leaders of the industry to fans in the grandstand — has to be worried about the health of the sport. Since 2007, when $14.7 billion was wagered on U.S. races, betting totals have dropped year after year, falling to $11.4 billion in 2010. In the first quarter of this year — even as other segments of the overall economy were beginning to recover — the sharp decline continued.
Faced with these grim facts, the Jockey Club commissioned the prestigious consulting firm McKinsey & Co. to “examine the current course of the sport” and make recommendations for change. McKinsey has been interviewing people from all segments of the sport, and the researchers’ preliminary findings are distressing. “In their modeling,” said Jim Gagliano, president of the Jockey Club, “the industry will continue to contract at the same pace.” This means that betting totals will keep dropping unless the horse business changes course. But how?
McKinsey has been hearing a wide range of ideas from its interviewees: The sport needs stronger central leadership. The sport needs to promote itself better. The sport needs to attract new and younger fans. The sport needs more TV coverage. Many people who love the game still dream of reviving the era when fans packed the grandstands of American tracks to cheer for their thoroughbred heroes.
It’s time for the industry to get realistic about its product. Aside from a few special places and events (Saratoga, Del Mar, Keeneland, the Triple Crown, the Breeders’ Cup and some tracks’ marquee stakes races) horse racing can no longer attract large live crowds. It is unlikely to be a mainstream sport again. But the game still has one significant strength.
In a country that loves to gamble, the racing industry allows customers to play a great gambling game with unmatched convenience. Fans can watch races on two television networks, on their computers and even on their telephones (through the marvelous app of twinspires.com.) They can legally bet from phones or computers. The most serious, committed horseplayers — including syndicates with sophisticated, computerized operations — bet enough to keep the industry semi-healthy despite its dwindling on-track business and fading popularity with the general public.
But now these core customers are betting less. Why? My evidence may be anecdotal, but I talk to a lot of gamblers, and I hear the same refrain from all of them. The complaints are not the familiar ones about high takeout or illegal drugs. Serious gamblers say can’t find enough tracks offering enough races that are worth betting.
Gamblers demand fields large and competitive enough to present the possibility of big payoffs. A 12-horse field, regardless of the quality of the horses, is usually a good betting vehicle. Five- and six-horse fields usually are not.
The U.S. thoroughbred population has been declining since 2008, when general economic conditions dissuaded many owners and breeders from bringing more horses into the world. Because of the horse shortage, tracks from coast to coast struggle to put on decent cards. On April 3, Aqueduct ran a nine-race program with no field larger than six horses. Golden Gate Fields last month carded 20 consecutive races with fields of seven or fewer entrants. As bettors steer away from weak products, a vicious cycle ensues. A track’s betting pools shrink, and the smaller pools in turn make the races even less attractive to big players. So they bet even less. One of the highest of this country’s high-rollers told me his wagering is down by 90 percent from his heyday.
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