I had possibility to participate in excellent Betting on Sports event in London two weeks ago. Among many other things I listened to panel discussion about the future of UK horse racing and betting. Although horse racing and betting in UK is not at all the same than it’s here in Scandinavia, the challenges sounded very familiar to me. I’m sure that horse racing and betting won’t succeed if they are not ready for big changes, but how big risk they are ready to take?
I have owned racing horses already 44 years (since young kid), been active horse punter almost as long time and worked many years in horse betting business. So, I believe that I have enough knowledge to make analysis about that industry. BUT there is big risk that I’m too insider and can’t see all problems we have. It would be interesting to get deep analysis from someone who is familiar with gambling and/or entertainment business but not horse betting/racing.
It seems to be global trend that people are not anymore keen on going to normal average horse racing events. The number of spectators on “Monday evening” races has reduced all over the world. Nowadays it’s so easy to watch races from TV or mainly internet and there is no reason to go to racetracks anymore. That will cause big problems in long term, because racetracks have been the best channel/place to attract new customers. Where we could reach them if they are not going to visit tracks in the future?
The situation is not so bad yet. Big horse racing events are still popular ones. There were over 70000 spectators in one day in Cheltenham Gold Day Cup (in average over 60000 per day) and we had 55000 people in Kuninkuusravit, the biggest Finnish horse racing event, in two days. So, it’s still possible to get audience to the racetracks but you should offer them something special which big events are doing. But I’m worried about would that continue and what would be enough for audience. I have examples from Sweden. I have visited in their most popular horse racing event Elitloppet already since 1978 and I think that there less audience this year than ever before. I also visited in the classical Trav Kriterium last weekend in Stockholm and there were less than 3000 spectators and Kriterium is one the main events. If that kind of high-level racing event doesn’t attract people, what we should offer? It seems to be obvious that racing is not anymore enough and you should offer more entertainment.
Horse betting is extremely big business and has managed surprisingly well although there are more and more new gambling opportunities available. According to surveys the size of global legal horse betting is about 27 billion euros (illegal market is also extremely big one) and it’s estimated to grow by 1 – 2 % in next few years. The growth rate is lower than in other gambling areas but it’s not catastrophic and that might be reason for the future problems… It is always difficult to make big changes when your business is still going rather well. You are not willing to take big risks because you are afraid of losing what you have although those changes would help you to maintain or even increase your profit level. That seems to be case now in horse racing and betting industry. Almost everybody agrees that we need structural changes, but we are not ready to change things which have worked well.
Horse betting industry has managed to move towards digital channels. Nowadays horse betting from digital channels is almost as big as betting on tracks and betting shops. In next two years digital horse betting will be bigger than retail and track betting. Here in Finland about 75 % of horse betting is already coming from digital channels. In that area horse betting is acting in modern way. Someone might say that even too modern way, because punters get better service in digital channels than they get on racetracks and there is no reason to go there anymore. Anyhow I think that the problems in horse betting are unwillingness to change racing formats and bet types. We have had same bet types (win, place, exacta…) tens of years and we are not ready to test something totally new. I’m not sure if Live betting would work in horse betting, but we should at least test it and/or try to find out another solution to offer customers more interactive betting options. There is huge amount of data available from horse racing and betting, but are we really using that to develop our product better? Do we know what kind of races are the most interesting ones from customers point of view? Do we know when punters are willing to make horse bets – when the races should start, where races should be etc.?
The core question is to whom we are developing horse racing and betting. Are we doing that for horse trainers and owners or for active horse punters or for “big audience”? The needs of those groups are very different ones and we can’t fulfill the needs of all of them. I think that horse racing and betting industry should understand where the money is coming from and try to maximize or at least optimize that revenue. Everyone in horse business would gain from higher profit. I have told that already many times in previous blogs, but I say it again: customer is the king or queen! I know that now some of readers might say that I’m too much horse betting guy and I don’t understand and appreciate horse racing and horse people. I do, but in my world we need customers and horse punters who will bring money to our business. I’m keen on hearing and understand if there are examples where the level of horse racing price money is not linked to the level of horse betting. I know that the Arab Emirates and Al Maktoum family is an exception but is there any other examples?