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HORSE RACING FEELING THE PRESSURE OF ONLINE COMPETITION

Monday August 15,2011 : Competition from casinos, online poker, and a poor public perception of horse-racing cited as major factors in the decline of the racing industry.
 
A study commissioned by the Jockey Club cites casinos, online poker, and a poor public perception of horse-racing as major factors in the decline of the American horse racing industry, reports the Associated Press news agency.
 
Conducted by the consulting firm McKinsey and Company the results of the survey were presented Sunday during an annual Jockey Club Round Table.
 
Jockey Club spokesmen said that the study will form the foundation of a multi-million-dollar series of initiatives over the next several years to move the sport forward.
 
The study found that overall betting handle is down by 37 percent, and attendance at racetracks is down by 30 percent.
 
However, McKinsey and Company also found that while racing has lost substantial gambling market share to casinos and online poker, it retains strength in the core product, citing the Kentucky Derby, where attendance is up by 8 percent since 2000. And betting handle on Grade I and Grade II races has increased by 23 percent per race over the past decade.
 
If current trends continue, the research firm estimates, thoroughbred racing will lose fans at a rate of 4 percent a year, and by 2020 the fan base will be only 64 percent of what it was in 2010.
 
Only 22 percent of the general public has a positive impression of horse racing, the report said. In the face of the sport's decline in image, commercial casinos in the United States grew 34 percent from 2001 to 2010.
 
Casinos at racetracks now account for $6.7 billion in wagering.
 
There are currently 854,000 slot machines in 939 casinos across 38 states. For a new bettor, online and casino gambling offer significant advantages over thoroughbred racing, the survey noted. And these are available around the clock and easily learned.
 
The report said current trends will lead to a 27 percent decline in the number of viable tracks, a 25 percent decline in tax revenue paid to states and a 50 percent increase in losses to horse owners by 2020.
 
Negative trends in the breeding industry will also steepen as the demand for horses declines.
 

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