Horse-racing tracks with alternative gaming, so-called racinos, have generally been successful in revitalizing the racing product by subsidizing race purses with earnings from gaming.   Yet racinos have not achieved what racing interests had hoped would occur:   the large-scale crossover of gaming players to betting on horse racing.  The question remains whether, given enough time and exposure to horse racing, gaming customers will increasingly be attracted to pari-mutuel wagering.   As far as slot-machine players are concerned, the most likely answer is no, not in significant numbers, without significant repackaging of the pari-mutuel product.

The learning theory explaining why customers become loyal to slots is very different from the learning theory accounting for why horse-racing players prefer pari-mutuel wagering.   It comes down to a marked contrast in consumer behavior.

The late B. F. Skinner, the famous Harvard psychology professor, is most associated with operant conditioning, which is also referred to as instrumental conditioning.   In operant conditioning, behavior is rewarded or punished and the learner thereby eventually associates the behavior with a consequence.   Positive reinforcers follow and reward a particular behavior and increase the likelihood that a behavior will be repeated, whereas negative reinforcers or punishment are intended to deter a behavioral response.

There are two kinds of positive reinforcement: continuous and partial.   In the former, the behavior is reinforced every time it occurs and in the latter the behavior is only sometimes rewarded.   Further, of the four types of partial reinforcement, gaming and lotteries are based on one type–a variable-ratio schedule of reward.   In a variable-ratio schedule, the slots player, for instance, is rewarded with a win only after an unknown and unpredictable number of tries.   This has the effect of fostering additional responses because the slots customer is conditioned to know that his or her next play may be a winning one.

Contained on a video tutorial about operant conditioning (click here to view it), B. F. Skinner states that “people gamble because of the schedule of the reinforcement that follows.”   This is why, of course, that it is difficult to extinguish the compulsion of addicted gamblers.

While wagering on horse racing also has elements of operant conditioning, an alternative explanation of learning–cognitive theory– is more applicable.   Compared to the rote stimulus-response-reinforcement pattern of slot-machine play, productively handicapping horse races is a far more complicated task.   It requires intellectual skills such as assessing past performances and determining their relevance to an upcoming race, making accurate probability estimates, and managing money.

A handicapper tries to decipher what a horse’s past performances bodes for its next race rather than betting strictly on the basis of some predetermined rule of thumb, such as using the first three digits of one’s home telephone number to select the Trifecta in all races on tonight’s card at Charles Town.  The numbers player is, of course, much closer to a slots player than he or she is to a handicapper.

Cognitive theories reject the notion that all human behavior can be attributed to people responding to stimuli in a certain way, based merely on past positive or negative reinforcement.   In the cognitive view, humans are information processors who learn by thinking, remembering, and applying their mental capabilities to solve problems.   The adept horse-racing handicapper processes and organizes esoteric information that may vary widely from race-to-race and track-to-track, depending on, for instance, whether the surface is dirt, turf, or artificial and whether the distance is a mile around one turn or two.

The operant conditioning of slot-machine behavior and the cognitive learning of horse-racing handicapping are so dramatically different that to expect a lot of crossover between the two forms of gambling is unrealistic.   Card games requiring skill like poker and blackjack may provide for better crossover prospects for handicapping.

However, that does not mean enticing slot players to pari-mutuel wagering is a lost cause, provided the pari-mutuel product can be adapted and presented in a format that is based on the theory of operant-conditioning.  Notably, Instant Racing, or recycled horse races presented on slot machines, capitalize on operant-conditioning.   The website of Arkansas’ Oaklawn Park Racing & Gaming  says:   “Alongside the latest electronic games of skill in the Instant Racing and Gaming room, you’ll find these popular pari-mutuel machines that combine all of the fun and flash of video gaming with the wagering excitement of racing.”

Instant Racing is consistent with the stimulus-response-reinforcement consumer behavior of slots players instead of the thinking–or “figuring it out”–behavior of horse-racing handicappers.   While the Instant Racing machines are today’s best model of a slots/pari-mutuel interface, creativity by racetracks, perhaps in collaboration with their customers and slots vendors, might yield new and profitable approaches to packaging horse racing in a way that would appeal to slots players.   Moreover, consumer-products companies often retain firms (click here for an example) that specialize in new-product ideas and development, so that is another promising option for racetracks to pursue.

If you are creative, conceive of a modus operandi besides Instant Racing to present pari-mutuel wagering in a format that will appeal to slots players, patent your invention, and maybe sell it to a slots or pari-mutuel equipment manufacturer for sale to racetracks.

The June 27, 2009 edition of Horse Racing Business had a related article titled:  “Alternative Gaming at Racetracks:  Gold or Fool’s Gold?”   It is available in the June archives.

Copyright © 2009 Horse Racing Business


  1. Biggest problem is that those who profit from slots the most do not want slot players to turn into horse players.
    Joe Blow has $200 to blow. He goes to the track and in theory gets to bet around $1000 before it is gone. The track gets around $85 to $90, and the horsemen get around $85 to $90, with the balance going to the state (depending on the taxes it could be lower for each the horsemen and the track).
    Now Joe decides to go to the slots instead. He gets around $2000 in action before he blows his $200 on average. The track gets $20 of that and the horsemen get $20 of that, and the state gets the rest.
    If you were the state, where do you want Joe losing his money?

  2. Slots involve no thinking. Consistently picking a winner in horse racing involves a great deal of thinking….so the answer is NEVER. Horse racing needs to find different answers.

  3. Well, Alejo, the “never” part is untrue. Racing need only present to slots players “live” runners in numeric format on which they can quench the desire to gamble without thinking.

    The typical lotto/slots player throws his money down consistently on a steady money-losing proposition, NEVER having any greater hope of winning on this bet than on the next bet.

    In racing, any establishment which offers him “live” horse numbers (consisting of horses carefully selected by would-be paid handicappers hired for exactly this purpose) to gamble on will ALWAYS outperform a computer selecting ‘random’ numbers from the same horse races.

    (with the advent of simulcast wagering, the door is wide open to this concept based on the fact that any random casino/simulcast establishment is only a small fraction of the nation-wide pools on the biggest tracks)

    In other words, racing controls its own fate that way, and it simply doesn’t care to implement the obvious…

  4. I reiterate…NEVER. As one of the young people who this sport supposedly is dying to attract, I know this would never work. Die hard fans are drawn to the “sporting aspects”, the beauty of the horse, the tradition, and the challenge of picking a winner. These are exactly what the sport needs to do a better job of promoting…not slots. For example, going to a track and being able to interact with horses, historical information, and listening to legends of the game.
    All of this will lead to betting on the races. That little machine might be of casual curiousity and tried out by the curious….for a while.