Filling the Grandstands Again: Rescuing Horse Racing

I recently read an interesting article from Bill Shanklin, over at Horse Racing Business where he draws some interesting parallels between the decline of the horse racing industry and that of classical music. He argues that these two formerly popular entertainment events have not kept up with the demands of the current generation more interested in the hype associated with today's pop culture heroes.

While I agree with the observation that certain aspects of horse racing are ideally suited for an era of proliferating mobile communications devices, the Internet and contracted consumer leisure time, I don't buy the commonly identifed structural issues of high takeout (the portion of the betting pool taken out by industry operators to manage the business side of the industry) and too many races over-saturating the market. Reducing supply to meet demand is a means to an end and the end is the demise of the industry and associated businesses.

To be successful, companies and their leaders must continually reinvent themselves to meet the needs of the customers and more importantly the demographic they wish to attract. Horse racing in particular needs to compete with other forms of gambling that court the online gaming demographic. Year over year, that market is growing by over 25%. So the question isn't who but how.

Reshaping horse racing to attract this demographic involves understanding both it's relative strengths and weaknesses, leveraging the strengths and addressing the weaknesses. Some of the characteristics of the sport make it very appealing. It is visual, with immediate gratification, and with the potential for large payouts. To be successful, the sport must overcome two obstacles:

1. Win rates and return on investment must be comparable to other forms of gaming. Most horses involve nine or more horses giving the novice a 1 in 9 chance of winning compared to 50% when betting on other sports. Vegas and other online betting alternatives have an ROI of approximately -10 to -15%, while horse racig is -30%.
2. The game must be simple for new fans to understand and learn.

Without addressing these things, attracting new fans to horse racing will continue to be an uphill battle.

What do you think?

Photo Credit: Jason Merideth