Cultivating New Players: A Continuing Failure To Communicate

During this past weekend in Baltimore, I was reminded once again at a continuing failure by the horse racing industry to educate fans on the ability to wager on our sport (and why the complicated inter-play between tracks, horsemen and ADW companies erects barriers to growth).

I brought a college friend of mine to Pimlico for both the Friday and Saturday cards, both of which were his first two times attending a horse race of any kind. My friend, Mike, is a huge sports fan - football, baseball, hockey, auto racing - you name it, he probably likes to watch it. And although he knew very little about horse racing before this past weekend, he was tremendously excited at the prospect of playing the ponies for the first time.

Mike isn't a big gambler but he'll take trips to Vegas and he enjoys placing a wager or two on certain sporting events during the year. This was an excellent opportunity to introduce a new fan to the sport, and from a demographic that the sport should be actively cultivating: young, professional, and already a sports fan.

Prior to flying to D.C. I sent Mike a copy of the past performances for Friday and Saturday's card, knowing full well that when he took a first look at them he'd believe he was looking at pages of hieroglyphics. Fortunately, most of the past performance companies provide some excellent guides for beginners on how to read the form and/or how to make bets. Basic fan education is generally pretty decent, even though the barrier to learning how to play the races is somewhat high.

The night before the Black-Eyed Susan we were sitting at an area bar with our forms spread out before us as we walked through each race on the card. At one point Mike asked me a simple question, "so, do you make all your bets at the track or at an OTB?" To which I replied that I make bets at my home track of Emerald Downs, or on-line though a site that takes bets on horse racing. His response, which is the same response I get time and again when asked about how I bet, was, "I thought it was illegal to bet on-line? Do you bet through an off-shore company?"

I sat at my seat at the bar and flashed a brief smile while I shook my head in continuing disgust. I mentioned to Mike that a perfect example of the failure of the horse racing industry to cultivate new fans and players was summed up in that brief exchange. After I finished explaining that horse racing is an exception to the on-line gambling laws, and that it's completely safe and legal to bet on horse racing from your computer through a U.S.-based and state approved company, Mike remarked, "I didn't know that. I could have been betting on horse racing all this time."

I run into this issue all the time. And when I write "all the time", I literally mean ALL THE TIME. I frequently walk up to my neighborhood bar to grab a couple of beers and a bite to eat while I read my racing form of the upcoming cards. Almost on que I'll get a couple of looks from whomever is sitting next to me and then the proverbial, "what are you reading?" question, followed by the "how do you bet?", and finally the obligatory "I thought that was illegal?" statement.

On the day of this year's Kentucky Derby, I noticed several people on Twitter discussing how to bet on the races at Churchill Downs. One person asked the typical question that non-horse racing fans put forth over and over again. Below are the embedded tweets from our exchange:

@kgoyette there is an exception for horse racing in the law.

— Matt Gardner (@pressthepace) May 5, 2012

@kgoyette If your state allows ADWs then you can bet horses online.

— Matt Gardner (@pressthepace) May 5, 2012

@pressthepace Ahh...awesome, never knew that...

— Ken Goyette (@kgoyette) May 5, 2012

"Never knew that." It's not the fault of the individual that they don't realize it's legal to bet on horses, it's the fault of the industry. Pure and simple.

The conversations that I had with my friend Mike and the gentleman on Twitter are not isolated instances. In general, I would estimate that the majority of non-horse racing fans believe it is illegal to bet on horse racing via your computer, something that can only be described as a monumental failure of the horse racing industry.

As die-hard horse racing fans, we know why tracks don't push the ADW aspect more aggressively: the track wants you to bet in person at their facility because they receive a bigger cut of the pie than if you bet through an ADW. My local track of Emerald Downs makes more money on a per bet basis if I'm betting in person than from the couch in my TV room. The nature of the ADW/Track relationship is such that it has created this perverse relationship that is at odds with actually making it easier for people to wager, or even encouraging people to bet on-line.

I'll repeat what I wrote above: this is a monumental failure of the industry.

I don't profess to know what the answers are to this problem, although I believe it has to start with a re-structuring of the economics of on- and off-track wagering. But regardless of the ease or difficulty at finding a solution to the problem, this is something the industry simply cannot ignore.

(Note: This whole ADW/Simulcast/On-Track betting inter-play is a pretty complicated issue of which most of us aren't privy to the nitty gritty numbers that provides the backbone of the relationship. The Thoroughbred Owners of California put together a presentation on the differing rates for on-track, simulcast and ADW wagering, summarizing how revenue is split between the different entities depending on where a bet takes place. It provides a bit of a baseline for understanding how the economics of the system and why if handle stays flat, but bettors move to ADWs from on-track betting, that tracks lose money. (Link: ADW Primer, October 2008)

Do we want new fans to gamble on our sport or not? The answer to that question should be an unqualified ‘yes', but right now the industry is acting as if their answer is ‘well, sort of'. While ADW wagering has grown significantly over the past decade, overall the "growth" is merely a shifting from on-track to on-line play. And that shifting bleeds money from the tracks. At the same time, while tracks would retain a lower percentage of the handle with on-line wagering compared to on-track, would you rather receive a small percentage of 5 or 10% growth, or 100% of nothing?

The fact of the matter is that we are in the digital age where people expect to be able to do things via their computer and their phone. It's an age of increased convenience and simplicity of communication. In most states it is legal to bet on horse racing via your computer, a huge advantage that the industry has over other forms of gambling. Yet, if you aren't a hard-core racing fan, you likely have no idea that it's permissible.

While it's a short-term gain for ADWs to try and extract the largest fee from the tracks that they can (and their business is about making profit, same as any other business), ultimately the model will fail if the relationship is so skewed that it's in the best interest of the tracks to essentially not advertise the fact that you can bet on their product via your computer. How long can the industry survive in it's current form if tracks are only concerned with protecting the status quo because of a fear that they'll lose money if their patrons utilize the tools that make it easier to place a bet? And how many more years will it take for the industry to get the message across to sports fans that aren't horse racing players that, yes, it's perfectly legal to bet on the sport on-line (if your state allows it)?

Until the industry can adequately address these issues they will continue to find it difficult to bring new players to the game. We can talk about social media, the internet, promotions and medication rules till we are blue in the face, but if we can't even convey the basic message to non-players that it's legal to bet on this sport in the most convenient of ways, then we will continue to be stuck in the mud.