Sports Betting Will Bring More Customers to Racetracks and Expand Interest in Horse Racing
Last week’s Supreme Court decision forever changed the wagering landscape in the United States. The Supreme Court ruled by a 6-3 margin that the Professional and Amateur Sports Protection Act (PASPA) of 1992 was unconstitutional. That Federal law had banned sports betting in every state but Nevada and three others with limited wagering. The Supreme Court ruling paved the way to allow states to offer sports betting.
Track owners believe horse racing has an advantage since race tracks in many states will be among the first to allow sports gambling. Many race tracks already offer slot machines and table games, commonly known as racinos, in addition to betting on horses. And, in reality, pari-mutuel wagering on horse racing has been the only legal form of sports wagering available throughout most of the United States at both physical locations and online.
Casino gambling is available in 40 states, with horse racing in 32 and 14 with racinos.
Many tracks have reduced races but have remained financially solid because slot machines and table games are more profitable. Now states are free to regulate sports wagering as they see fit, and horse racing is in a better position to seize the opportunities and rise to the challenges of a legal sports betting landscape.
But horse racing must overcome stiff political opposition in two of the Triple Crown states, Kentucky and Maryland, to take advantage of the ruling.
Kentucky is capital of thoroughbred horses, but has no casinos.
While both Churchill Downs in Louisville, KY and Pimlico Race Course in Baltimore, MD had more than 135,000 fans in attendance for the recent race days featuring the Kentucky Derby and Preakness Stakes, it’s those kind of race days and events that keep interest in horse racing afloat. And with Justify winning both races, the chance at a rare Triple Crown winner in the Belmont Stakes June 9 will keep horse racing in the media spotlight for the next three weeks.
But horse racing is still looking for a boost, and sports betting may provide it with more overall wagering dollars spent. The handle, the total of money wagered at tracks nationwide, has fallen from $15.18 billion in 2003 to just under $11 billion the past seven years. Industry website Equibase hasn’t tracked attendance since the mid-1990s, but it has been dropping. Alex Waldrop, president and CEO of the National Thoroughbred Racing Association, said the sport is “holding its own” financially through all of the betting platforms.
Still, the horse racing industry recognizes that it needs more immediate help.
Churchill Downs Inc. wasted little time taking a step on this new frontier. The company announced an agreement last week with Golden Nugget Atlantic City to enter online gambling and sports betting in New Jersey.
“You’re now going to see casinos, if they don't already have race and sports books, interested in putting those in," Waldrop said. "The two are perfect compliments and we see them all over Las Vegas. Perhaps we'll see them in commercial casinos, and that would be a boon for horse racing. Anytime we can expand our distribution platform is a good thing."
New Jersey will get a jump on sports betting
Sports betting has already entered the starting gate at Monmouth Park. The ocean side, New Jersey race track has a sports bar that is being expanded to allow sports betting through its partnership with sports book operator William Hill. Once lawmakers establish regulations for the new venture and sports betting, and get approval by the Senate at the next session on June 7, then the governor can sign the bill. New Jersey will then be up and running to allow sports betting with financing, rules and procedures in place. Many more options could be available by the fall for the start of football season and in early November for the Breeders’ Cup at Churchill Downs.
Mobile Betting will add to the pie
Mobile betting will also be implemented by states over time, and as more people are able to watch their favorite teams, sports and wager on the events, they will crossover to horse racing. Those that are already at the race tracks and casinos betting on sports will give horse racing a try and bet on a few races. They will divert some of their dollars to bet on the races or innovative wagers that involve horse racing and sports games. The additional dollars bet on horse racing through the expanded legal sports wagering platforms in states will produce more revenue. Those dollars can be used by the race tracks to offer greater purses and promotions to increase interest and wagering on bigger events.
There are plenty of questions, challenges and opportunities ahead as states move from the paddock to the starting gate and work on legislation to enter the sports betting marketplace. The horse racing industry has been handed a huge opportunity by the Supreme Court and how they break from the gate will be a determining factor in its financial future.
The odds on the horse racing industry just improved, and legal sports betting in the United States is going to be a boost to horse racing. You can bet on it.
FairwayJay is a leading national sports handicapper and is recognized as one of the sports industry's most insightful analysts. Read more great insights from Jay here and follow him on Twitter: @FairwayJay