UofL Panel Discusses Current Racing Landscape

Though horse racing was negatively affected by the global COVID-19 pandemic, as was every other industry, it also gained exposure as it was nearly the only sport to watch and bet on when businesses and entertainment initially shut down across the United States in mid-March. Even as the economy and other sports have reopened, the racing industry has been given an opportunity of which to take advantage, a virtual panel of the University of Louisville Equine Industry Program Speaker Series discussed the evening of Sept. 22.

"Racing's Now Reality: Is it Sustainable?" was the first of three panels scheduled to be hosted this fall and discussed if horse racing's current operational model in the midst of the pandemic can continue for the long term. Andrew Offerman, the vice president of racing operations at Canterbury Park; Terry Finley, the founder and president of the ownership group West Point Thoroughbreds; and Jack Jeziorski, the executive vice president of Monarch Content Management, a subsidiary of The Stronach Group, fielded questions from moderator Mike Penna, the president of Horse Racing Radio Network, and from the comments of a live Facebook stream conducted by Horse Racing Nation.

Jeziorski said content for horseplayers started to quickly disappear in mid-March as tracks in both the U.S. and around the world started to shut down. But even with only a handful of tracks running in April, broadcast signals were being sent out internationally. 

"The tracks that were running—and I thank God to this day for Gulfstream Park, which never shut down—we were sending those tracks literally around the world and I was working with Fonner Park and Will Rogers and sending those tracks along with Gulfstream to Europe, to Australia, to South America, because literally there was almost nothing to bet on, so people were desperate for it," Jeziorski said.

Finley also noted the increase in television coverage that horse racing experienced as other sports were sidelined.

"I've had a good number of people that said, 'I downloaded a betting app and I got exposed to horse racing and I really liked it. It's a lot of fun,'" he added. "I do think we have some momentum in the public's eyes. It's up to all of us to capitalize on that momentum."

As for capitalizing, Jeziorski urged for the increased distribution of content and different ways to push content out to the public.

"Back in January, on FanDuel they launched horseracing on their sports betting site. It did a little bit but in March when all the other sports went away, it took off," he said. "We were getting some significant handle, real material handle, from FanDuel customers on Gulfstream in April and May. And even with all the other sports back now, it's not as much as it was, but we are still getting some significant handle from the FanDuel Sports app. That tells me people discovered the sport and have stayed with it. But that increased our distribution.

"I think we got to figure out how to increase the distribution even more. If you see the model in other countries, whether it's France or Australia or these other places, there are far more places where you are exposed or they have the ability to bet on horse racing, whether it's a bar or more (off-track betting facilities) or set up in your convenience store, there's a kiosk."

Advanced deposit wagering outlets allowed for some tracks to set record handle, even without the on-track crowd, including Canterbury Park. The shortened meet at the Shakopee, Minn., track closed Sept. 17 and though on-track wagering declined 65%, off-track wagering increased nearly 116% and average handle per race increased 114%. Offerman said the live racing schedule was shifted to Monday through Thursday to capitalize on the off-track betting.

"For a long time you kept seeing content and racetracks consolidate around the weekend. I think that there was a lot to be learned from spreading content out over seven days of the week," Offerman said. "Providing larger areas of less competition was probably better for everybody and did, not surprisingly, do what a lot of people have called for: increase the whole industry's handle over that six-month time period."

While handle boomed, tracks still experienced setbacks without the crowd to place on-track bets or buy concessions, and casinos closed to reduce the spread of COVID-19. Offerman noted that Canterbury Park drives a significant amount of its revenue through attendance, food and beverage sales, and general entertainment practices as much as it does live racing. The track was able to host only 750 spectators during the 2020 meet, compared to the daily average of over 6,500 last year.

"I can say for a fact that the revenues that were lost from our lack of patrons were not made up for even by record wagering," he said. "From truly a bottom-line perspective, we need to do even better than a record, let's put it that way, to make it sustainable under the current model."

Penna also asked about looking at the amount the tracks receive from ADWs differently now that on-track takeout is down.

"First, remember when the pandemic hit, thank God for ADW or people couldn't have been betting at all. We would have all been out of luck. They were a lifeline those couple months when everything was shut down," Jeziorski said. "I've been in this business about 12 years now. That whole 12 years this has been an essential tension: How do you divvy up that line, and what's a fair split of it? I do think, particularly if stuff moves online, you're going to see—it's happening already in a couple of jurisdictions—where horsemen are saying, 'Wait a second, we're down.' Handle may be up, but the share going to purses is down. There needs to be an adjustment in that."

Penna asked if there was concern that states would look to take money from casinos or other supplements that go to the horse racing industry, which can be important to fund purses. In New York, with less money in the pool already and casinos operating at limited capacity, the Belmont Park fall meet has had purses cut. The Oct. 10 Jockey Club Gold Cup (G1) will run for $250,000, for example, down from its $750,000 purse a year ago.

Finley said the situation between states and casinos is a concern, and certainly in New York. He said it was important to show states the value of the overall Thoroughbred industry, the ecosystem of it from the farms to the tracks, and that supplements from video lottery terminals are being used to drive the industry to better things. 

Finley also noted the effect the pandemic is having on sales between purse money available.

"When we see purses going down, we're less apt to go to a sale and to spend big money. We spend big money because we like to think that we're going to have a shot to go to Saratoga and to run for a million dollars or $750,000 or $500,000," he said, "so when they get chopped, I think it really affects the outlook of the owners and the agents when they go to the sales, and I think the cumulative effect of that is a challenge for us and I think could be a pretty major problem."

"We're in an important stage in our industry and important time in our industry where we've had a slow, gradual decline over the last few years. I think we can reverse that," Jeziorski said. "I think we have a great opportunity with the increased exposure we've gotten this year, but it's going to take a lot of effort across the board. There aren't any silver bullets, and we need to improve the customer experience, improve the owner experience, and improve the bettor experience in order to grow the sport so we can all live and thrive and it'll be here long after all of us are gone."

The next Speaker Series panel, "Waiting for the Gavel to Fall: Kentucky Horse Sales Go High Tech," will take place Oct. 13, and the series will conclude Nov. 10 with "An Evening With Hall of Fame Jockey Pat Day." Livestreams will begin at 5:30 p.m. ET.