PA Horse Racing Thinks Sports Betting’s A Complement, Not A Competitor

Posted on August 28, 2018

Horse racing in Pennsylvania has been declining since the turn of the millennium.

Now that the state has legalized sports betting, Pennsylvania racetracks are bracing themselves. Both to protect their market share of the entertainment dollar and to grow by introducing the joys of the sport of kings to new demographics.

Horse racing revenue continues to steadily decline

State Agriculture Secretary Russell Redding set out the problem:

“The system is broken, and needs to be fixed. This problem has persisted for years. There has been a 71 percent decline in wagers placed on live horse racing in the state [of Pennsylvania] since 2001. This means there has been less revenue for the oversight of the industry.”

The 2017 Racetrack Casino Benchmark Report identified that there was a 3 percent increase in the total amount bet on races during the year. This was the first increase since 2013.

Unfortunately, this wasn’t much of a positive because the entirety of the increase came from growth in “out-of-state betting on simulcasts of Pennsylvania races.” In every other category of betting, revenues declined.

Is marketing racing to Millenials the answer?

To combat the decline, and promote horse race betting in the face of new sports betting opportunities, the Pennsylvania Horse Racing Association (PHRA) hired marketing company Pavone to help create a strategy.

PHRA spokesman Pete Peterson explained:

“With the push to get casino gambling and ancillary online gaming in the state, such legal forms of gambling took money away from horse racing gambling. To insure that PA’s horse racing industry wasn’t harmed, a portion of casino revenue went to supporting the industry through award purses, breeders incentives and health benefits. This made legalizing gambling across the state more palatable to rural legislators looking after farms and breeders. However, more state marketing revenue went to advertising casinos as profit margins were larger, so what horsemen and breeders decided to do was market themselves with help from but 1 percent of money they got from award purses and breeders incentives.”

Hiring Pavone was the first step to raising interest in horse racing amongst the Millennial generation. Pavone’s Associate Creative Director Gabrielle DeNofrio immediately focused in on the excitement of being trackside during a race:

“Horse racing on a track is unlike any other gaming, wagering or sporting experience. Millennials have to know how truly interactive this is, how easy it is to be part of the action – you can get right on the track’s apron. You can practically lean in and touch it.”

DeNofrio believes that horse racing has characteristics that make a fit with the Millennial culture. She should know, she’s a Millennial herself:

“Everything old is new again – the retro feel of whiskey, handlebar mustaches, handmade crafts, men and women wearing hats. Millennials are loving all things authentic, and horse racing meets that criteria. From its physical effort to the pageantry to its animals bonding with the riders to the fact that you can choose your own level of involvement – studying up on stats or just picking a horse because you like the color; it’s all there. Young people will respond to this.”

Or is the answer for racing to offer sports betting?

Some of Pennsylvania’s racetracks are directly connected to the casinos which are likely to launch sports betting. Notably:

Kim Hankins, executive director of the Meadows Standardbred Owners Association commented on the role the casinos currently play:

“It’s the casino’s duty to capture the slots market, and it’s our duty to generate new fans,”

He believes that horse race betting and sports betting share common elements. As a result, not only will horse race bettors try out sports betting, but that new sports bettors can also be a new customer for horse racing:

“Sports betting is a mental decision, whereas slots are ‘push-a-button. Horse racing is also a mental decision; you have to put some thought into it. … it could offset some of what we’d lose in revenues.”

Mini-casinos and tracks need to band together

He also commented on the role of the new mini-casinos. At locations like The Meadows, horse racing could benefit from players making a day of it by visiting both the mini-casino and racetrack.

If we can define an optimist as someone who turns every negative into a positive, then the PHRA is definitely optimistic about the future of Pennsylvania horse racing.

The advent of sports betting can be exploited to provide a growth opportunity for racetracks and to introduce the Millennial demographic to the turf.

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Joss Wood

Joss Wood has a master’s degree in organisational development from the University of Manchester as well as an English degree from the University of Birmingham and also earned. His writing primarily centers on international online gambling markets, though he also writes about the legal US online gambling industry in addition to sports betting and esports gambling.

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