Fantasy Sports: An Opportunity - and a Competitor

By William Shanklin 

CNN.com earlier this year posted an article titled “The Rise and Rise of Fantasy Sports,” in which it reported the activity is expanding at double-digit rates.

The Fantasy Sports Trade Association estimates 27.1 million adults in the United States currently participate in and will spend roughly $4 billion on virtual sports competitions in 2010. Prizes earned by game winners vary from less than $100 in cash or comparable value to $10,000 or more.

The Unlawful Internet Gambling Enforcement Act of 2006 made exceptions for horse racing, fantasy sports, state lotteries, and certain kinds of securities transactions. The magazine Editor & Publisher—in referring to a recent cash-reward sports fantasy contest run by the Philadelphia Inquirer web site Philly.com—remarked that the publication “has become the first newspaper to offer online sports betting in the United States.” All but six states permit their citizens to partake of fantasy sports for money and in-kind rewards.

Media portals such as CBSSports.com and Yahoo.com offer free fantasy sports games in football, basketball, baseball, and hockey. The demographic profile of fantasy sports players is highly desirable.

According to World Fantasy Games, a typical player is a college-educated 37-year-old male who is married with children and has a $94,000 annual household income. He manages six fantasy teams in various sports and, in doing so, is online at least three to four hours a week. Men compose about 90% of fantasy sports players.

Horse racing needs to pay close attention, given the magnitude and growth trajectory of the fantasy-sports market. This segment of sports entertainment represents an increasingly important competitor for the gaming dollar. 

TVG Fantasy Horseracing allows fans to enter, with no entry fee, a public league or to create a private league to manage a stable of horses, jockeys, and trainers. Similarly, the 2010 Road to the Roses Fantasy Game, sponsored by Churchill Downs, enabled players to select a stable of runners eligible to enter the Kentucky Derby Presented by Yum! Brands (gr. I) and its prep races. Rewards for earning the most points ranged from small stipends for weekly best performers up to a grand prize of $5,000 for the contest winner.

The abundant and precise statistics in horse racing make the sport conducive to online fantasy gaming. While an increased involvement in fantasy horse racing would not directly boost purses, it would indirectly do so if it succeeds in cultivating enough real-life bettors among well-educated men and some women in their 30s and 40s who have above-average incomes. Further, racetracks and ancillary wagering services might be able to profit from compelling fee-based games with real money returned to winners.

William Shanklin, a longtime contributor to The Blood-Horse, is the publisher of the Web site horseracingbusiness.com

11 Comments

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Mike D

Agree with comments.  Fantasy sports has grown in sports where the leagues have cheaply (or more often freely) licensed the data that underpins the game.  The past performance data for horses, trainers, jockeys, etc. is so expensive and closely controlled that it makes market entry (by a Yahoo, an ESPN, etc.) and their innovation unlikely.

21 Jul 2010 4:05 PM
Adam Lazarus

The world of fantasy sports is an open entree to horse racing. Its no secret that horse racing needs more fans/bettors/owners. The fantasy sports world got me hooked on horse racing to the point that I have gone from a weekend player to a horse owner. If any racing fan knows of a friend or a person in there office who plays fantasy baseball/football invite them to the track one weekend I bet you can turn some of those fantasy players in to horse players and potential owners in the process.

This sport needs new blood/new ideas.

21 Jul 2010 5:12 PM
Stephanie

I don't exactly meet the demographics but as a 28 woman with 1 child I LOVE playing the fantasy horse racing games when they are going on. I have played the Road to the Roses for 4 years now and it is great. I wish more people would start or promote fantasy games like Winstar and Vinery did this spring. It is a easy way to get light advertising out and teach people about picking horses.

21 Jul 2010 5:33 PM
C. G. Dean

Fantasy Sports is a great example for racing to copy.  All or most of the data is free and the hold on some of these leagues/contests is very high.  I've been is some where they take in $50,000 and pay out $20,000.  That's a takeout of 60% and you have to shut people out after the contest maxs out.  Because the price of getting involved is free, people don't mind the 60% takeout.  Racing needs to copy this model with free data/stats for all bettors and charge them higher takeout on their wagers.  Racing will get much more money that way and will have many more bettors because the price to play is free.

22 Jul 2010 1:24 AM
stanley

interesting article.  the future for fantasy racing stables is mindboggling.  Racing has a way of viewing everything as "a competitor".  if racing executives would "join up" instead of labeling and looking at the world thru the eyes of a monopolist they would see the many benefits & obvious costs of not "joining up."  

22 Jul 2010 9:52 AM
Owner

I have a question, when Churchill Downs closes their race track for training for three days to host a big festival and I am paying a day rate to have my horse there do I get invited for free drinks?  I haven't seen the invitation yet.

22 Jul 2010 2:13 PM
Herman

Thank you for this article. You hit the nail on the head. Fantasy Horse Racing can only help our industry. I have bought a couple of stables on DerbyDreamer.com. It is a lot of fun, helps to understand horse racing and seems to be enjoyed by proper handicappers as well.

22 Jul 2010 3:03 PM
Cangamble

As a horseplayer who loves playing Fantasy Football as well, I think the best way for it to work is to focus only on jockeys and trainers to keep it simple so as to appeal to the fringe audience.  But I can see it taking off if the right people run it.

22 Jul 2010 7:48 PM
mike rullo

the racing industry needs to support derby dreamer, this can save the sport if it's done properly. everybody that loves the sport sign up at derbydreamer.com

and enjoy the best sport created.

23 Jul 2010 11:24 AM
trackjack

Needless to say, I have enjoyed this article and comments and believe that fantasy stables can help this industry if marketed correctly.

I won the roadtotheroses.com contest this year.  My wife and I will be guests of Churchill Downs for next years Oaks and Derby and the additional cash prizes will allow us to stay the week in Louisville and attend this years Breeders Cup at CD.  Thanks Churchill Downs for a great contest!

NYRA used to have a similar contest for Belmont, Saratoga and Aqueduct but stopped a few years back.  

Perhaps a nationally marketed contest similar to roadtotheroses.com, starting with Haskell/Jim Dandy weekend, continuing each weekend leading up to the Breeders Cup, tied in with nationally televised segments, would help promote this great sport.  It can be done!

24 Jul 2010 11:16 AM
Giddup

Call me crazy but I think you can probably get all the fantasy you need by just going to the track and trying to hit the pick 4 or superfecta.

27 Jul 2010 9:40 PM

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