How have racinos helped save the horse racing industry?

In recent years, the U.S. horse racing industry has seen a significant drop in on-track attendance and gross revenue. This has been brought on by decreasing overall interest in the “King of Sports” along with the advent of online horse race betting platforms like TwinSpires and TVG.

The bottom line is fewer people are visiting live race tracks in favor of betting on horses online or participating in other forms of online gambling. That would include sports betting and casino gambling with regular and no deposit bonus casinos.

With so much pressure on industry officials to rescue the horse racing industry, said officials have been forced to look for creative ways to attract more horseplayers. That would explain the creation of “racinos.”

The horse racing industry as a whole has gone through significant changes over the past 10-15 years. Many of these changes have been intended to protect the athletes (horses), which most people would agree is a good thing. However, the unintended consequence of these changes has been a significant drop in fanfare.

Some of the key changes include:

• Stricter medication rules for horses
• Inability to keep superstar horses on the track due to breeding value issues
• Dominance by wealthy horse owners who have made ownership too expensive for recreational horse racing enthusiasts
• Higher take-out rates from wagering pools leaving less for horseplayers

Enter the racino. A racino is a combination retail casino and race track. Such facilities allow gamblers to bet on horse races while enjoying the option of playing casino games in between races or when the track is dark.

It’s noteworthy that lawmakers in some states will only allow racinos to offer slots. That has been largely the case since 1994 when Prairie Meadow in Iowa opened the nation’s first racino. However, recent trends point to more states allowing racinos to also offer table games. It’s a somewhat new trend that seems to be paying dividends to all vested parties.

A reasonable person would question why opening a casino at a race track would save horse racing. To be clear, racinos have made a positive impact on horse racing though one could debate the extent of that positive impact. Let’s look at the three (3) primary ways racinos have made a difference.

Horse racing has long suffered from a decrease in media exposure. Aside from major events like the Kentucky Derby and the Breeders Cup, the media offers little to no coverage of horse racing. The lack of media coverage has resulted in the inability of the industry to draw new customers through direct marketing efforts.

It took a bit of creativity for industry officials to realize that maybe new customers would visit race tracks if they had another reason to do so. What better customers would there be than casino gamblers who have already shown themselves to be gamblers?

It works. On-track attendance has been improving and significantly higher at racinos than traditional race tracks over the last few years.

In states where racinos are permitted and regulated, it’s common practice for a portion of the gross revenue created by the casino to be distributed to the race track. The race track will typically use the money to boost race pursues and improve marketing efforts.

The increased purses have definitely improved the quality of horse racing. This is due in large part to the fact larger purses give potential owners more reasons to get involved in the industry at a financial level. More owners mean more horses. More horses mean a better horse racing product for new and existing fans.

As for improved marketing efforts, many of the nation’s top racinos are turning their marketing efforts to younger adults. They are doing this based on the realization that the industry could perish if new and younger horseplayers aren’t pulled into the industry.

Another reason the horse racing industry has suffered is because of racing saturation. It wasn’t that long ago that there were too many race tracks running too many races. In conjunction with fewer owners, there came a point where the horse population was too small to support the industry infrastructure as it once existed.

This has been changing because casino ownership requires high capital reserves from owners. The requirement for higher capital reserves has forced racino ownership into the hands of larger gambling conglomerates like the Stronach Group, Fanduel, and Churchill Downs Incorporated. This increasingly centralized control over the horse racing industry is proving to be a positive as it helps streamline the institution of new directives that are intended to fix horse racing and move it into the future.

One final thought: All of this should be considered good news. Why? After 150+ years of history, it’s too soon to put the horse racing industry “out to pasture.”