Wagering Plummets Since Triple Crown
Bets placed on United States and Canada racing dropped $209,860,208 from a similar six-week period following the Belmont Stakes (gr. I) in 2007, according to data collected by The Jockey Club Information Systems. This year’s total handle of $1,691,643,357 wagered from June 8 through July 20 is also between 5.5% and 7.4% less than any similar period from 2003-2006.
Take your pick of reasons for the decline, and probably all deserve consideration: the national economy and oil/gas prices headline pressures working over the industry from the outside; signal disruptions from revenue disputes and integrity issues are among many taking a toll from the inside.
Chris Scherf, the executive vice president of the Maryland-based Thoroughbred Racing Association, a coalition of more than 40 racetracks, is one of those who feels the decline can’t be blamed on one or two issues, but is likely fueled by a broad spectrum of factors in and out of the industry.
“There is a significant drop in the casino industry, if you look at the Atlantic City numbers from around here,” he said. “Some think that is a general reflection of the economy. I wouldn’t underestimate the prices of gas either. And there is an obvious impact from cutting off simulcast signals to various places. But to apportion it at this point exactly, I can’t do it.”
Scherf said handle is not nearly as accurate a metric of a racetrack’s overall revenue stream as it once was, given the fact that rates paid for different signals – on-track, simulcast, advance deposit wagering, etc. – vary from track to track.
But he agrees that handle may be an accurate reflection of general interest in the sport.
“If the handle is going down, that is not a good sign,” he said. “There is less interest. What underlies that, though, is that it may not be as bad as what it looks for a particular racetrack, or that it could be way worse for another racetrack.”
The National Thoroughbred Racing Association, in conjunction with Equibase, recently reported a 4.15% decline in North American handle during the second quarter of the year, which ended June 30. NTRA president and chief executive officer Alex Waldrop said a look at a snapshot period can often be misleading, and that his office would wait until after the end of the third quarter -- which features the premier Del Mar and Saratoga meetings -- to make any hard assessments.
"It could be related to the Eight Belles tragedy, the integrity issues, the health and safety issues," he said of the recent declining numbers. "While we certainly can't ignore all of the factors, including the economy and others, it’s probably too soon to separate the issues.
"In my years from working at the track, if you look at a weekly basis or daily basis, you can see exaggerated changes," continued Waldrop, whose employment stints in the industry included a tour as president of Churchill Downs. "Look at the Keeneland (Spring) meet, for example. We saw there that the handle was down early in the meet, but that it recovered by the end."
One ADW executive, who asked to remain anonymous, said he saw an immediate drop in wagering following the end of the Triple Crown series.
“It was instantaneous and dramatic,” he said, estimating his company’s decline at 15% since July 8. “One day I looked at our numbers and it was like, ‘Where did all of our players go?’ ”
Where are the bettors?
There is an ongoing concern that the “whales” of the industry – those high-volume players that annually bet upwards to $1 million or more – have left outlets contributing to purse-feeding pari-mutuel pools because of restrictions in wagering offerings. Signals to such ADW giants as TVG and Youbet.com, among others, have been curtailed in recent months by a well-publicized national dispute between racetracks and horsemen groups on how revenue from those wagering dollars should be shared.
But Scherf discounts the theory that whales are leaving the pari-mutuel pools.
“There is less concern over booked money as its going back in the pool,” he said. “If you are just booking, you have limits on what you can handle, because you want to limit what you can lose. And the big bettors find that is not a viable outlet, particularly if they are a very good bettor.”
Instead, he said there is concern over the loss of wagering dollars to alternative forms of gambling.
“I think sports betting and poker through bookmakers has been a bigger problem -- in that we have lost some players now doing that instead of horse racing, or they have cut back on horse racing betting to do that,” he said.
But one of the organizers of the new Horseplayers Association of North America feels some bettors have indeed departed the pools for friendlier environments.
“There is no doubt that some players have left the traditional pari-mutuel wagering platforms,” said John Swetye, a Connecticut entrepreneur who helped launch HANA, an advocacy organization for bettors. “Some left because they can't get a bet down with their ADW because it doesn't offer a particular track, or because the player can't have an account with a certain ADW because of where they live.”
Swetye, a former horse owner who is involved in television production and hedge funds, said one of HANA’s goals is to contribute positively to the industry’s solution process. But he said some perceptions are going to have to change.
“Right now, horseplayers get too little respect -- especially among some racetrack executives,” he said. “Horseplayers can not understand why the customer is given so little respect. Without horseplayers, would racetracks exist?”
Scherf said data he has seen suggests that handle wagered at night-time venues is suffering the most.
“There seems to be decreases there that are significant,” he said. “You would think it’s alternative gaming. And that can be everything from sports betting to online poker, to people just playing more slots at night when they go to a casino. It’s probably a variety of combination of those factors.”
In high-profile examples of some steep betting declines, betting at the recently-concluded Churchill Downs meet was down 11.5%, and opening-day handle at Del Mar was off 9% -- including a 14% drop in on-track wagering despite a record crowd of more than 43,000 on hand.
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