Account wagering offers Thoroughbred racing its best opportunity yet for real industrywide growth, according to a new report from Bear, Stearns, & Co. The 128-page report analyzes the regulatory and technological environment governing account wagering, and offers suggestions about what changes must occur for account wagering to expand. The report also compares the strategies and structure of the companies currently offering telephone account and Internet wagering. "Account wagering currently comprises just 4.0%-6.0% of the $18.0 billion pari-mutuel wagering industry," said Marc Falcone, Bear Stearns managing director and gaming and leisure analyst. "The room for growth is staggering, particularly as the legislative environment heats up and technology continues to rapidly evolve." The full benefits of account wagering won't be realized unless four factors are addressed, according to Bear Stearns' analysts Marc Falcone, Jason Ader, and Eric Hausler, who authored the report. The factors are: regulatory expansion, marketing and branding, enhancing technology and media exposure, and international markets.Regulatory hurdles are the most significant for the racing industry. Even though a December 2000 clarification of the federal Interstate Horse Racing Act allows wagers by telephone or other electronic means between states with legalized pari-mutuel wagering, account wagering legislation must still be adopted state-by-state. The Bear Stearns report said the recent adoption of account wagering by California and the project budget shortfalls in 36 states this year could help accelerate the process.Beyond the regulatory obstacles, the report recommends that the industry develop a focused, consolidated marketing and branding strategy. Targeted marketing and player tracking should improve account wagering products and services, and ultimately increase the fan base. Technologically, horse racing needs a greater television presence and should focus on developing interactive television wagering, which Bears Stearns' analysts believe will make the sport more attractive to younger fans. Internationally, the United States has significant opportunity to increase handle because its racing product is considered one of the world's best, according to the report. Expanding into overseas markets, however, means additional technological challenges, another layer of regulatory obstacles, as well as culture differences to overcome.The companies expected to benefit the most from account wagering are the ones with the best racing content, the strongest brands, and the most advanced technology, according to the report. Bear Stearns' analysts said the companies that stand to gain the most now are Churchill Downs, Magna Entertainment, and Penn National, but they are not the only ones. Other companies that should benefit because of their distribution platforms are Scientific Games, the parent company of Autotote; the TV Games Network, and Youbet.com.