As one tote company executive sees it, should expanded sports wagering soon become reality, horse racing needs to make sure those bettors place their wagers on-site at racetracks or online at advance-deposit wagering outlets.
"Having sports wagering at our tracks and on our ADWs is very important," said Michele Fischer, vice president of sales and business development at Sportech Racing and Digital. "If they're not in your building, they're somewhere else."
Fischer spoke March 14 on a sports wagering panel at the National Horsemen's Benevolent and Protective Association convention in New Orleans. With a Supreme Court decision that could open the door for expanded sports wagering expected in the coming weeks, the panel encouraged horsemen to pursue a seat at the table.
Consultant Jennifer Durenberger said in pursuing that seat at the table, horsemen and the industry should emphasize that racetracks—and potentially ADWs—are good fits for sports. Durenberger noted, as anti-gambling groups oppose expanded gaming, it can be a helpful argument to say that the new form of gaming—in this case sports wagering—would be conducted at racetracks or online ADW sites, which already offer gambling. She said that argument helped when slot machines were added to many racetracks.
She also said states understand that licensed individuals should have a seat at the table for changes that could impact their industry. She said as states form a plan for putting sports gambling in place, racing will need to emphasize its impressive economic impact, its high number of jobs, its ties to agri-business, and its benefits for green space.
"You are thousands of small business owners," Durenberger said. "And you have the privilege and blessing to work in an industry that has economic impact in your states in very large numbers. In my state of New York, it's over $4 billion, with a 'B.' Even in small states it's tens of millions of dollars."
Durenberger said the potential impact, good and bad, of sports wagering on horse racing gives the sport a seat at the table.
"There's opportunities here to bring some new customers in, if we get with the operators and have some creative marketing and things like that, to bring people who are interested in betting on say, basketball, over to looking at horse racing," Durenberger said. "But there also is the opportunity to lose customers if we're not forward-thinking in the products that we're offering."
National Thoroughbred Racing Association president and chief executive officer Alex Waldrop encouraged horsemen and tracks to reach out to companies that have expertise in sports wagering, then pursue that common interest together. That model already is in play at Monmouth Park, where William Hill has spent $1 million to build a sports book facility.
"The No. 1 thing you should do is to get on the phone with a William Hill, or someone else in this business, because this is not our business," Waldrop said. "We don't understand this. It's vastly more complicated and risky than pari-mutuel wagering. You need to get experts that are out there who can advise you. You should not go down this road thinking this is just another case where you can divvy up purse money. It is much more complicated.
"If you're not prepared (and) well-advised, you'll be left behind for any number of reasons."
Joe Asher, chief executive officer of William Hill U.S., noted his company spent $1 million to build the sports book at Monmouth, and, with some sense that the Supreme Court could repeal or partially repeal the federal legislation that has prevented states from offering sports wagering, recently added space for sports wagering at the track.
Asher said the model at Monmouth will see his company take on the risk—sports wagering is a bet made against the house, where the house potentially could lose money. He said William Hill is used to that model and can stomach the volatility around it. He expects the wagering companies will assume this risk in states.
Asher added the William Hill-Monmouth partnership has worked well, noting that Dennis Drazin, who oversees the track, probably deserves as much credit as anyone in pushing forward the sports wagering Supreme Court case.
In terms of potential returns to the industry, Asher said in Las Vegas his company has not seen much crossover on a day-to-day basis, but noted there is opportunity on racing's Triple Crown and Breeders' Cup days, as well as its marquee meets.
In terms of specific agreements that would generate money for purses and tracks, Asher said in Delaware—which is allowed to offer parlay cards at racetracks—some money is shared with the industry, but he wasn't sure of the percentage. He said the Monmouth operation would share profits 50-50 between William Hill and the track, which is owned by horsemen. Monmouth will then determine a percentage to purses.
Waldrop noted that anyone who thinks the addition of sports wagering will come at a slow pace, similar to the expansion of casino gaming, should rethink that position. He said changes will come at a faster pace, and the time to act is now.
At the federal level, the NTRA is working to protect horse racing's interest in the changing landscape, he said. He expects that current federal legislation could be revoked or changed, and the NTRA also will stay on top of any impact on the Wire Act, which allows horse racing to conduct interstate wagering.
"The NTRA is on top of it. We have a seat at the table for the industry, among all the players we've talked about—the sports leagues and big casinos," Waldrop said, noting some legislators who have worked for the industry. "If the Supreme Court opens it up, a lot is going to happen very quickly."