Arizona Global Racing & Gaming Symposium Wraps Up

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Two days of speakers and panel discussions focusing on innovation in horse racing concluded Wednesday evening in Tucson. The 43rd annual Global Symposium on Racing & Gaming was sponsored by the Race Track Industry Program at the University of Arizona.

Two Wednesday morning speakers addressed the animal rights agenda and the threat that it poses to racing.

Marcia Kelly, a veteran of conflicts with animal rights activists, said small problems can quickly become a big headache for racing.

“It's not hard to find one example of a bad apple, and from that one bad apple a propaganda campaign can explode,” said Marcia Kelly, a veteran activist. “Most industries have more than more one bad apple.”

She encouraged racing regulators and executives to take a hard line on punishments for animal welfare issues to maintain credibility on the issue and to stave off a backlash from animal rights groups.

Kelly believes that horse racing has done a good job of addressing animal welfare issues, but has done a poor job of publicizing their efforts.

“Tell the media what you're doing,” she urged.

Kelly added that when a racing executive says “no comment” to inquiries about animal welfare or refuses media access for photos, it appears that racing has something hide.

She was forthright in her advice: “Be proactive and be open. Communicate to the media.”

Kelly said the animal rights activists can undermine events by persuading sponsors to drop support, and, as an example, cited the efforts of the Humane Society of the United States to end the Iditarod dog sled race.

Patti Strand of the National Animal Interest Alliance stressed to the audience that people involved in animal rights organizations want to end all use of animals and sport and can muster widespread public support.

Joe Harper, president of Del Mar Racetrack, urged symposium attendees to take the animal welfare issue seriously and detailed the protests that Del Mar has endured by people wanting to shut down the track.

“They tell people that we're killing horses at Del Mar,” Harper said. “These people are going to come to all your racetracks, too. Get a plan together now. Medication issues are something we must deal with. We've had a necropsy program at Del Mar for years, but I think we need to take it further. I think that every horse that dies on the track should have its veterinary records open for inspection. This is the most dangerous issue I've seen in my 40 years in racing.”

In a session on racing innovation, Walter Hessert of Derby Games said that horse racing has been lagging in providing enticing online betting opportunities. He pointed out that many of the horse racing apps easily found online are low-budget and unattractive.

His firm has introduced new product called “Race Champ” aimed at filing that void. The mobile app will be introduced in May, 2017.

Hessert noted that half of all American adults play mobile games while children spend seven hours a week playing mobile games. He said that those findings demonstrate a great opportunity for horse racing.

“The appeal of gaming crosses all demographics,” he said.

Hessert said that if racing misses the social gaming opportunity, it will be like repeating the mistake when horseracing turned its back on TV a half-century ago.

Yenni Vance of Remington Park discussed the success of the “My Remington Park” app, and said that tracks must have a fully integrated mobile strategy or they're destined to fail.

“You must have a direct relationship with fans,” Vance told attendees.

One of the most compelling panels late on the first day of the symposium was titled “Racinos: Is The Marriage Headed For A Divorce?”

Lonny Powell, CEO of the Florida Thoroughbred Breeders Association, explained the challenge that breeders and horsemen in the Sunshine State face with the prospect of decoupling racing from gaming operations, potentially affecting purse money dramatically.

Powell remains confident the marriage between racing and casinos in Florida will remain intact, but spelled out several steps that each partner in the marriage must take to keep the bonds strong.

Chris McErlean, vice-president of racing for Penn National Gaming, outlined his organization's efforts in various states.

He pointed to Ohio as a success story as purses at both Thoroughbred and Standardbred tracks have skyrocketed, and that Ohio has returned to the top of the list of states producing Standardbred foals.

Greg Martin, vice-president-wagering for Woodbine Entertainment Group (WEG) in Ontario, outlined how his province has gone through the marriage-divorce-settlement process with its Slots At Racetracks Program (SARP) at tracks.

In 1996, when Ontario faced a budget shortfall, the government approved VLTs at tracks and thus began the “marriage” of gaming and racing. The Ontario Lottery Commission operated the slots under the agreement but tracks and horsemen would benefit with generous percentages of the revenues.

Initially, optimism prevailed and WEG invested $400 million in new and improved facilities.

“We rebuilt barns and refurbished the tracks,” Martin said. “We built the best sports bar in Toronto.”

Everything changed in March, 2012 when without warning the provincial government decided to divorce its gaming operations from tracks. The slots program was termed a “subsidy” and tracks were given a one year notice of termination of the partnership.

“WEG spent 12 years investing in this program only to be told that we had a year to transition into not having the slots,” said Martin.

The overall impact to WEG and the Ontario racing and breeding industries was devastating.

The Ontario government later admitted that it had “dropped the ball” in making the changes and attempted to repair the damage with a new commitment to racing. Wagering has rebounded, but WEG and the Ontario horse racing industry adjusted to a new reality with a lower income from slots.

A popular afternoon panel on Wednesday titled “Making Wagering Great Again” was moderated by Ray Paulick, publisher of The Paulick Report. Paulick noted that pari-mutuel wagering in the United States has declined 27 percent over the last decade, mirroring a 25 percent decline in the number of races.

Klaus Ebner from the Woodbine Entertainment Group explained efforts in Ontario to increase handle, including lowering bet minimums and lowering takeout. WEG has also pushed its multiple bets to entice bettors wanting to hit a big payoff.

“Big fields are the key to driving wagering,” stressed Ebner. “Also, adjust your post times so that you don't step on post times from major tracks. Don't force your customers to decide which one to bet.”

Andrew Offerman, director of racing operations at Canterbury Park, showed how wagering and purses at the Minnesota track have increased in recent years.

Canterbury decided to reduce its takeout rates, and Offerman added, “Results were mixed in that handle increased but overall revenue did not go up due to the takeout reductions.”

David Haslett from Sky Racing World in Australia said that wagering on racing is increasing in Australia while the US pari-mutuel is declining. He attributed the increases to providing customers with options such as fixed odds wagering, flexible betting amounts, and allowing a customer to cash out early on a Pick 4 bet.

Bart Barden, the US director for Betfair, explained that exchange wagering customers match bets against each other.

“One person thinks a horse is going to win, and another person thinks a horse is going to lose,” he said. “Exchange wagering increases customer engagement and churn.”

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