Woodbine: TV Combats Handle Cannibalization

by Jack Shinar

While California horsemen fret over the risk of customer cannibalization as a result of account wagering, Woodbine Entertainment officials say they have found just the opposite to be true: Televised racing drives wagering.

Nick Eaves and Andrew MacDonald of Woodbine Entertainment told the Harness Racing Congress Feb. 21 about their company's success by "employing any and all distribution strategies."

The final day of the congress was devoted to technology and the marketing of horse racing in the decade to come. New media experts from several companies painted a very bright future -- if horse racing can harness technological advances.

Topping that list is interactive television, which allows bettors to easily watch and wager from home. But "e-wagering" is a concept many horsemen are still struggling to grasp.

Eaves cited figures that show account wagering in the Canadian provences has jumped from $10 million in 1997 to more than $72 million in 2001. At the same time, on-track wagering went from $720 million to more than $900 million.

"We saw significant increases in both, so this growth was not at the expense of our main customers," said Eaves, Woodbine Entertainment's senior vice president of marketing, gaming, and business development. "We did not see cannibalization."

Officials in California, where account wagering was legalized in January, worry it will keep horse players who would otherwise come to the track at home. The key to preventing that is more televized racing, Eaves said.

He painted a picture of Woodbine in the early 1990s as a business in serious decline. It was failing to attract a new audience, its distribution was limited to live racing, it had little TV exposure, had no technological advances, and experienced a steep drop-off in wagering due to competition for entertainment and gaming dollars.

Embarking on a new distribution strategy with an emphasis on bringing racing to the people, Woodbine reversed those trends. The Toronto, Ontario, track now shows its product on four different TV mediums: simulcast, satellite, digital cable, and basic analog cable.

Woodbine now operates three full-fledged TV studios on-track with shows developed for both hard-core traditional customers interested in odds and action, as well as "softer" shows designed to educate as well as entertain potential fans.

The approach also entices people to bet more. For example in a study of Saturdays, Woodbine had an average account-wagering handle of $59,807 when no races were broadcast live. With live racing shown on TV, the Saturday home-wagering handle soared to $101,026.

In other presentations, Alan Bergstein, a "techno-evangelist" who works with Microsoft's Product Strategy Group described new interactive technology that his company is developing. "Interactivity will radically transform the landscape of home entertainment," Bergstein said, "and that's very good news for you. It puts the user in control."

He described 360-degree desktop cameras that can visually connect people into virtual communities and even create the illusion that users are anywhere, including the racetrack. Millions of tomorrow's Internet users won't even own a personal computer; they'll use "smart" cellphones with infinite wireless capabilities and hook-ups to the Internet, he said.

Bergstein held up a cellphone the size of a matchbox. "You'll have to be able to display data in ways you can't even imagine now -- you'll have to get it all in here," he said.

"The technology is already here today," said Bergstein, son of Harness Tracks of America executive vice president Stan Bergstein. "The question for racing is how to take advantage of it."

About 143 million Americans regularly get online, with 450 million users worldwide. E-business in gaming and racing, it is estimated, will be in excess of $5 billion in 2003.

MGM Mirage, parent company of the Mirage, where the conference was held, is among the corporations that has jumped on board the techno-gaming wave. Bill Hornbuckle, president of MGM Mirage Online, told of his company's recent launch of an international e-casino with race and sports books based on the British Isle of Man.

"We didn't have a choice to get into it or not," Hornbuckle said. "We didn't want a $5-billion opportunity to pass us by in our core business: gaming."