6 February 2015

Location Location Location

It seems that one of horse racing's largest entities has given up on the idea of pari-mutuel growth in North America.   It is probably realistic given the direction the industry leaders are heading, especially when it comes to the effects of their actions on price sensitive players (the 25% of Horseplayers who wager more than 75% of the collective handle).

It is a good thing that there is an acknowledgement that handle can be increased if foreign markets start participating in North American pools.

But what is overlooked is that there are quite a few markets in the USA that doesn't allow parimutuel wagering.  Why not push for those markets?   One would expect that states that don't allow parimutuel wagering and/or online horse race wagering like Alaska, Georgia, Hawaii, Mississippi, Missouri, Nevada, North Carolina, South Carolina, Utah, DC, and Texas would have more interest in the North American racing product than countries in South America, for example.

Texas has 9% of the US population, and internet horse race wagering is somehow banned there.  It is unclear who is to blame for the law, but it needs to change.

There is a coalition in Georgia looking to bring horse racing to the state, including online wagering, and they believe that they can add over half a billion in handle the very first year they get the green light.

What is really mind boggling is that you can wager on play Daily Fantasy Sports online in every state mentioned above.  Currently, it appears that Arizona, Iowa, Louisiana, Montana and Washington are taboo states for DFS companies.  By the way, Arizona just started allowing phone betting on horses, so it is the only state with a consistent no "playing" online rule.

Seriously, what is wrong with this picture?   Not that most gamblers, especially young ones, in states like North Carolina would choose a 21% takeout game over an 8% takeout game if given the opportunity, the problem is they don't even have the choice to bet on horses.

Still, expanding into states and/or countries is only a band aid solution in the big scheme of thing, and until pricing is dealt with directly, horse racing will continue to spin its wheels at best.

I'm convinced that if horse racing adopted a universal takeout maximum of 15% 10 years ago, this guy would be handicapping horse races on Youtube today instead of fantasy basketball games:

The similarities between handicapping a few races and handicapping a fantasy basketball lineup are shockingly similar (so much for horse racing's learning curve excuse).  The similarity ends when it comes to discussing industry growth as the North American horse racing industry has all but thrown in the towel (they know their current philosophies will mean no handle growth), while the Daily Fantasy Sports industry is thinking a bad year would mean it grows by less than 50% in 2015.

Horse racing needs a few Jake Sanders in order to grow, but with a 21% average takeout, that is an impossibility.

No comments: