Blood in Corpse Still Pretty Warm

“We’ve been on a death march for two days. Is (horse racing) valuable? If you don’t believe it is, it’s time to look for a different job. We need to educate ourselves about the things that work in this industry. We have a lot of strength and things going for us if we can get our crap together. I don’t think it’s dead or dying—or at least it doesn’t have to.”

The above was said by Susie Sourwine, vice president of marketing at Emerald Downs in Washington state, during the 2008 International Simulcast Conference. I didn't see Susie at this year's conference, but I can tell her this: Her comments are still relevant. That, of course, is no surprise.

On multiple occasions in Saratoga Springs, N.Y., Oct. 12-14, it was said horse racing is dying or already dead. If the latter is true, we're walking dead, a zombie if you will. And if we keep telling ourselves that, chances are we are doomed.

That's not to say excellent points weren't made at the conference. For example, Eugene Christiansen, chairman of Christiansen Capital Advisors and a longtime observers of the racing industry, said the business needs "wholesale structural changes." Jeff Gural, who owns two New York harness tracks with video gaming machines, said horsemen and breeders view slots revenue as an entitlement and called them a collective "welfare recipient."

Christiansen is correct, but the industry must not agree, because very little has been done to alter the structure for decades. Gural's assessment is brutal but true; hundreds of millions of dollars in slots revenue have been wasted on an artificial fix when tens of millions of it could have been used to try to build the core business.

If we are dying, what do we have to lose?

Gural is a realist and has casino partners to answer to, but he keeps spending money to promote racing. For him, slots are a means to an end.

He noted closing day at Tioga this year produced record business with the slots play at $400 per machine. About $10,000 was spent marketing racing that day, and pari-mutuel handle was up 50%. But the track earned $2,000 in revenue from handle, and $40,000 in revenue from slots.

"If I didn't have slots, I couldn't justify it (to the partners)."

Fair enough, but an effort is being made at a racetrack in a remote location. It's not hopeless.

Here's a bright spot: State Fair Park in Lincoln, Neb., posted double-digit gains in attendance and handle for its 37-day meet this year. Mike Newlin, director of racing operations at the track, said it charged admission but instead gave out live past-performance programs for free. Interesting, and perhaps part of the reason on-track handle increased 17%?

Small price to pay, huh? Pompano Park in South Florida just announced it will start giving away live programs to encourage wagering, another encouraging move at a time when the cost of track-owned data is becoming prohibitive to purchase.

Someone at the conference told me Daily Racing Form costs $7 on Saturdays in New York; at Saratoga Gaming and Raceway last weekend, a NYRA program that included Belmont and Keeneland sold for $4.50. Yikes. And if you wanted to play other tracks, you had to spend $5 for a DRF simulcast program that doesn't even have the third-place finisher in past-performance lines.

This is the kind of stuff that discourages and ultimately kills players. It can be rectified with a simple mindset change: Eat the cost now and benefit down the road.

(Interestingly, two guys from Accumark Digital Racing Programs in West Pittston, Pa., were on hand displaying their multi-track Equibase-style programs. The number of their clients continues to grow, they said.)

There were some upbeat folks at the conference, including Andrea DeLong from Capital OTB in New York. She talked about "hybrid" fans and cultivating their interest in horse racing. She said such customers want to be valued, catered to, respected, and educated. She took a small poll that showed only 11% may wager at first, but the ones that do aren't $2 bettors; they bet $10, $20, or more.

Sounds like a somewhat captive audience.

There were other good stories about using facebook.com and twitter.com to attract newcomers. And if you look around the country, smaller tracks like Canterbury Park and Emerald Downs still put a premium on on-track business. If Turfway Park can attract 3,000 people on a Friday night in January for dollar nights, there's still a pulse.

Most people, I believe, really like horse racing. But I wonder sometimes if racing industy honchos truly appreciate it and what it can be.

"Groups are forming because they love horse racing," Thoroughbred Racing Associations executive vice president Chris Scherf said. "They have surprising interest in building our business. Our industry could use a little health care. Sometimes I think we are surrounded by death panels."

Exactly. Racing needs to change, contract, streamline, reinvent--take your pick--but it doesn't appear near death to me.

And let's take Susie Sourwine's advice from last year: Let's get our crap together.

 

 

19 Comments

Leave a Comment:

Somethingroal

Great article Tom. I agree, instead of focusing so much on the doom and gloom, why not start focusing on being part of the solutions? If there is a will there is a way and I believe we have enough well informed people involved with the horse racing industry to turn things around.

15 Oct 2009 3:55 PM
Craig

Churchill Downs proved with night racing that if you make it an event, instead of just a day at the races, you will attract a very large, younger hip audience to the track. Short term they may not be big gamblers but many will become long term customers of racing.

The Kentucky Derby is an event, the Breeders Cup is an event just like each NASCAR race is an event. The day in and day out racing cannot be an event but by selectively making event days at tracks there is something for the industry to build on.

15 Oct 2009 4:42 PM
FourCats

"Jeff Gural, who owns two New York harness tracks with video gaming machines, said horsemen and breeders view slots revenue as an entitlement and called them a collective "welfare recipient.""

"Gural is a realist and has casino partners to answer to, but he keeps spending money to promote racing."

What?  I'm a long-time fan and recently a horse owner.  I don't view slots as an entitlement.  I don't even view slots as a fix.  And, as far as being a "welfare recipient", I've put a lot more money into this sport than I've ever gotten back in purses.

I don't live in NY and have not been to Mr. Gural's tracks.  Perhaps he is spending a lot of money to promote racing.  But all of the track owners in my area spend zip on promotion and zip on upgrading the horse racing part of their establishments so that it is pleasant to go.  The local tracks that have slots have made those areas nice with carpeting, good food and pleasant service.  The slots are advertised on TV and other media.  The horse side of those tracks have none of that and no advertising.

The track owners, along with the state regulators and the media, are the leaders in the industry that have the capability to market the sport.  (Few horsemen have that level of influence.)  Most of these track owners simply seem not to care.

15 Oct 2009 7:17 PM
coyotebait

Congratulations Tom.  

You have written the seldom-spoken least known truth.  

Mr. Gural is a rarity in racetrack management.  He seems to love the sport, as well as work to promote racing which serves to honor the track's originating partnership with horsemen.  

You have accurately depicted the miserable failure of a sport to grow its the fan base - for the most magnificent sport in the world.  

Pathetic marketing; incompetence; too long a monopoly, gone fat and lazy with profits from the no-brainer windfall of off-track wagering.  

Racetrack managers were so busy counting the money, they never realized they had nothing to do with it, and the unattended bubble was soon to burst.  

In fact, regulators and racetracks have persitently contributed to the mess that we see with policies designed to destroy the backbone of the industry:  the little man; small owners and trainers.

...The sport of kings

...My how the mighty have fallen.  

...Humpty Dumpty comes to mind.  

...All the king's horses and all the king's men, couldn't put Humpty Dumpty together again.

Sad to say.

...Bravo, Jeff Gural!  Without, and a few, there would be no hope at all.  

CHOMPS,

^__^

..

15 Oct 2009 9:27 PM
tvnewsbadge

Agree with FourCats. At my local track, they've even stopped giving out those little pencil stubs when you buy a program.

And DRF is no longer available.

Even the "meet end" trophies have been downsized to in one case what looked like an empty bottle.

15 Oct 2009 10:24 PM
BELLWETHER

BACK... BACK...BACK..."OUR NATIONAL TREASURE IS ON ITS WAY BACK" TO THE TOP OF THE SPORTS WORLD WHERE IT DAMN SURE  BELONGS...EXPOSE IT...EXPOSE IT...EXPOSE IT...& THEY WILL COME...LONG LIVE THE KING BABY!!!...

16 Oct 2009 1:15 AM
richard

Dump 'marketing' people, adopt "people who love horses." Otherwise, I and millions of others are outta here. Rg

16 Oct 2009 7:24 AM
Somethingroyal

I live in CA and subscribe to the California Thoroughbred publication. One would think that the magazine would have had Zenyatta, who is California-based, on at least one or two of the covers within the last six months. Not once have I seen Zenyatta on a cover or an article about her or her team. What the heck is going on with CTBA and why are they not promoting the heck out of this great mare? Zenyatta has a huge fan base who will drive hours to come watch her run. And yet she is not being promoted to drive people to the track when she runs. I'm with Richard. Dump marketing people and bring in people who love the horses and sport. Wake up CTBA!!  

16 Oct 2009 8:40 AM
BridleWise

There are plenty of bright spots, if the industry is willing to open its eyes and look at them! We have a small track in a small market here in Fargo, North Dakota, and yet we managed two straight years of DOUBLE-DIGIT increases in on-track handle and attendance! A little bit of strategic and yet cheap marketing (we used our Facebook, Twitter and even door-to-door "free tickets" like madmen!), a lot of fan-friendly additions (an ex-racehorse as mascot for the kids to pet, free and more importantly FUN betting seminars, daily giveways using coporate sponsors, etc.) and a cheerful willingness to try it, at least once, if we think people might have fun and enjoy it made our 2009 meet wildly successful (like a 48% increase in on-track handle!). We managed this due to a collective belief by our staff, our board of directors and our fans that what we were "selling" was fun, exciting and worth coming out for!

Willfull blindness to the concept that horse racing ITSELF (not slots, not card rooms, but RACING) is a product worth developing and marketing is painful for me to watch. I am part of the "core demographic" of 21-35 year olds that every marketing agency selling every entertainment product in the world is after...every marketer except apparently those involved in racing.

To see industry giants like Churchill Downs take this long to "discover" that night racing on a Friday night is a "good idea" is laughable!  I should think it does not take millions in marketing research to find out that large groups of young people with jobs (and by default, with money) do not normally go out for entertainment purposes (especially to gamble) on a weekday AFTERNOON but that they just might on a Friday or Saturday night.  This should NOT be an astounding breakthrough, not in the year 2009 and not with an industry with so much to lose if we don't starting using our heads soon.

Indeed Susie, I met you last year at the conference and gave you my kudus then and I give you my kudos now.  We really do need to get our crap together...and soon!

16 Oct 2009 10:29 AM
racehorsefan

I've been in the industy for 20 years as a grunt employee. I was a hotwalker and groom at Remington Park when it first opened in all its glory and big dreams.  In the six years I was there, I watched the fight with state legislation over revenue and the failure to return it to the purses which in my opinion is how you attract the good horses, which attracts the bettors. Year after year, I watched the beautiful facility and barn area deteriorate until I could bear it no more and moved to KY. People in this industry, at EVERY level, need to work TOGETHER for horseracing to return to being a top spectator sport. Fans love their superstar horses and they want to come to a great place and enjoy the venue. We are all linked together in this process and if it's always everyone for themself then it will and is going to fail. This industry needs to get back to the basics of what makes it a success (the people) and build on that solid foundation towards competing in the modern world of sports. Anybody ever think to ask the $2 bettor (most of the youngsters) what it would take for them to bet $20? Most of them would just like to know the basics of betting and a little about the daily life of their favorite racehorse. Do any of you longtimers out there have an understanding of how hard it is to get a start in this industry or become a fan if you have no previous experience or mentor? This industry needs to open up to some fresh air and ideas. You might start by just asking ...

16 Oct 2009 11:13 AM
Randy in Knoxville TN

I'm a 50-yr old fan of KY racing for the past 20 yrs. I drive up about 8X a year. I have never wagered on anything other than horses, but I think slots are probably the most sure-fire way to "shore-up" lagging attendance, and thus handle, at least in the short-term. But also, like Gulfstream has done, consider using that huge CD infield for concerts. Also be creative in attracting families, young families. I consider myself a racing purist and don't look forward to a day when I have to wade through toddlers to place a bet, but better that than the game of racing vanishing. Once again, I'm just a fan, and I do not truly understand the depth of the situation, but it does seem that numbers of fans are declining somewhat at the tracks I visit. I guess my best advice would be "think outside the box". Man, the world sure has changed.

16 Oct 2009 12:01 PM
KenfromRI

I had posted in another blog the need to get an overseeing organization, NTRA or some such group to get all the industry to work TOGETHER instead of as separate little fifedoms as they now do. A small pct. should be taken out of each race handle, even 1/10 of 1 pct. would work to fund a national advertising campaign to get racing back in the public's mind. Beyond that, some way of legislating no breeding until a horse is 5 would allow us to promote some continuity in the racing stars, the horses themselves, so that the average joe can latch onto a name and not have it whisked off after 6 or 10 races as is now the case.

16 Oct 2009 12:03 PM
Don McDougall

I have done a lot of betting thoroughbreds over about 40 years, and more recently attended casinos. I have bred and owned a thoroughbred, though, happily, none now. Betting, breeding, and owning are expensive propositions for a small outfit, especially since I never seem to win. While the population around the world has grown, the proportion attending live sports events has probably dropped in all sports, not just horse racing. Television and radio have been strong substitutes but, sadly, racing has been way behind the curve in adjusting to this new entertainment model. I think it will be difficult to keep going successfully because so many of the industry's stakeholders (how I hate that word) simply view racing as a source of easy income. Governments siphon off a significant amount and could care less as long as no obvious crimes are committed that would reduce handle. Racetrack owners and management probably care most about the customers, but they seem short-sighted and interested in preserving their monopolies in their areas and in making more money as easily as possible. Racetrack workers and their unions care about their paychecks and benefits and job security first, and the customers come way behind -- no surprise there. Jockeys care about safety first, probably the horse, and then winning. Trainers care about owners first, horses second and income third. Breeders care about horses and sales. Owners care about horses and purses and bills. Who is there with much time for trying to build the long-term customer base, and who cares about the long-term anyway? Not many, though the idea for The Breeders' Cup was wonderful. I am not a fan of Federal regulation, but, unfortunately, the horse racing entertainment industry is so fractured that, unless they can quickly get a powerful Commissioner, the USA should pass a law and crack heads together to get a nationally-regulated industry with a reduced tax takeout initially, which could increase as handle increases. Medication rules should be limited and standardized nationwide, and the FBI should be seen once in a while on the backstretch. That seems draconian but consider the present perception of many that some races may be "fixed" with medication that may not be subject to current tests. If even a very small number of races are "fixed" how is a small bettor to know which ones? The big ones? The little ones?  Certainly people feel that way about Olympic athletes. Why not horses?

16 Oct 2009 1:37 PM
Ratherrapid

why does racing need to "contract"?  why do we keep hearing this?  where i come from racing needs to "expand".  Tracks like Lincoln need to figure out that when we bet at Twin Spires etc. we'd like to be physically able to make a Lincoln bet. How much revenue do they lose through simple stupidity and lack of basic internet marketing?

16 Oct 2009 1:56 PM
Waquoit

I applaud the doom and gloom because without it, there is NO chance of any positive action. The happy-face people are kidding themselves. Horse racing as a business is just like the newspaper business. Look what happen to them, they fell off a cliff.

Racing is such a great game it's pathetic that it's in such trouble. Pricci is right when he asks why the fact that it is a great gamble isn't marketed more. Touting "jackpots" isn't the way to go. Racing is more subtle than that.

And why doesn't racing market to retired folks? They have the cash and the time to enjoy the game more than anybody. Yeah, today's 65-year-olds probably won't be playing in 20+ years; but a new batch of people turn 65 every year.

16 Oct 2009 5:01 PM
BELLWETHER

RICHARD HIT THE SNAIL ON THE HEAD...GET A FACE...GET A MOUTH...GET A TRUE PROMOTOR...HORSE RACING IS HIDING FROM AMERCIA N PLAIN SIGHT!!!...GREAT BLOGS...THANKS HORSIE PEOPLE...LONG LIVE THE DIRT!!!...

17 Oct 2009 1:37 AM
realist

We hear a lot of talk, now it's time to walk the walk.

Americans have an uncanny ability to judge sincerity & they love animals. Kids - potential race fans - love horses. Racing is at a crossroads, a historic opportunity to be as aggresive and transparent about guaranteeing the humane treatment of the equine athletes that make it possible as it is about other aspects of the sport.

Until the industry sincerely makes equine welfare a top priority, bans slaughtering yesterday's winning ticket for human consumption overseas, cleans up the drugs and pays its fair share for sound retirement programs (including for post-career vet care) for all its equine athletes, including $5,000 claimers, mainstream America - including families and festival type audiences - will shy away.  

18 Oct 2009 6:51 AM
Shiznik

Who had heard of Geico 10 years ago? That insurance company has been around for decades. They are now one of the tops in their field.

How about Free Credit Report.com? How many jingles do they have running through your noggin (regardless, if you want them there or not )?

There are multiple examples of companies that went from also-rans to tops in their field by using effective advertising and marketing to promote their products. Not to mention, that all the established products still use the above approach.

Advertising and marketing campaigns can WORK. They need to be consistent and creative. There are many avenues in horse racing that can be exploited and promoted. Get creative!

Use a sense of humor and hammer it home over and over and over again with a variety of clever promotions with a focused theme.

I don't even see, what I would call, a realistic attempt at advertising and marketing. Promote, promote, promote!  Creative marketing WORKS, but you have to try.

Companies that make products like Pepsi, Coke, Budweiser ( and a million other products that are household names) continue to spend millions and millions on advertising and marketing.

Why?

Who hasn't already heard of those products? These companies understand that name recognition isn't enough to sustain the business model they have set up. These companies continue to do, what many would consider unnecessary,  and promote, promote, promote. It is a never- ending cycle.

Why would horse racing think they are any different? Horse racing is a product, just like the rest, and needs an updated approach in promoting their sport. Or even just an approach of any kind, lol. It is hardly enough to say "well, who doesn't love horses?"

I know, I know, there is no governing body so it is just a bunch of individuals trying to protect and save what they have. Therefore, the money is sparse and no one can afford what I am talking about.  

What a woe-is-me sport this has become. I would give up the money I wager for an entire year and give it to a REAL leader with vision, if only someone like that would step up. Really, is it that hard to organize a sport that is flailing? How hard would it be to seriously convince the powers that be in the various regions that the sport needs fixing and show them an effective model of how to do it.

Money, with the proper motivation, can always be raised and there really is no excuse for what has happened this once proud sport.

It is shocking to think ( with all the successful examples of organized sport) that horse racing is still doing what they did 100 years ago in terms of how they run their sport.  

A total and complete lack of organization, without even so much as ONE leader, has gone on for well over a century.  

It really is mind-boggling.

19 Oct 2009 3:32 PM
Rachel/NH

You're right...many people love horse racing...until they see the whipping, find out horses are allowed to run on pain killers, hear about the drug scandals, see their first breakdown, find out the only option for most retiring race horses is "rescue" as opposed to retirement and a new vocation...

I live in a world of hunter/jumpers...where people spend thousands and thousands to buy a horse, train it, take lessons, buy equipment, etc just to go to a show and spend $100s of dollars to show in classes for a chance to win a lousy ribbon EVERY weekend, and these same people couldn't be PAID to go to a horse race.

There is a serious disconnect with not only the general public, but with horse people when you can't even attract a horse fanatic!

20 Oct 2009 8:19 AM

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