The horse racing industry should exploit the growth of sports betting, broaden its distribution, and develop new content rather than looking to racinos as an industry "savior," according to Scientific Games chairman and chief executive officer A. Lorne Weil.
Weil was the keynote luncheon speaker Tuesday on the opening day of The Symposium on Racing and Gaming held at Loews Ventana Canyon Resort near Tucson, Ariz. The annual conference is presented by the University of Arizona Race Track Industry Program.
Touching on the keynote address by Churchill Downs Inc. president Tom Meeker at last year's symposium, Weil said horse racing is in a "rut" and said though he supports racinos, the industry shouldn't look to the racino model as its savior.
"We're in a rut, like being in a steady job that doesn't pay much while we wait for a Messiah that may never come," Weil told a large crowd of industry stakeholders.
Weil said that a solid technology foundation is essential to the health of the industry, but it should not, like racinos, be looked to as the sole redeemer of the sport.
"Technology is an enabler of growth but by no means a driver of growth and a driver of growth is what this industry is in need of."
Weil said horse racing needs new content in order to grow. He used the lottery system as an example saying that though the lottery is a "sensational business model" which reaps high profits, it hasn't grown over several years because it has not developed new content, yet its still outgrown horse racing because of its widespread distribution.
"If you don't change the product and content, you can't grow," Weil said.
Weil also cited the controversial betting exchange Betfair as a good example of what new content can do for growth without making an argument for or against the actual allowance of such exchanges in the United States.
"Betfair combines the excitement of racing with sophisticated elements of a business exchange," Weil said as he dismissed the notion the sport is too complicated to attract new customers. "Betting exchange players are not dumb. They're coming in droves to bet this way...Look at the impact of what new and improved content can do to turn around the fortunes of the industry."
Weil said horse racing should exploit the growth of sports betting moving forward. In Nevada sports betting is about four times larger than horse racing in terms of revenue, he said. He cited the sustained growth of the Hong Kong Jockey Club since introducing a sports betting element to its structure.
"Sports betting is something we need to think really seriously about," Weil said.
Weil said industry leaders also need to work better at distributing their product and looked to European counterparts as examples of better distribution. For instance, in the U.S. there are two points of distribution per million people, whereas in France, where betting is offered in restaurants and bars, there is 141 points of distribution per million people.
Overall, Weil said new content is paramount. "If there is no new content, we can scream 'Go Baby Go' until are faces turn blue, but by the time we're done, there will be no one there to scream it to, because without new content there won't be new customers."