Archives for September 2021

ROBUST BUSINESS FOR U. S. HORSE RACING SO FAR IN 2021…WITH A DELTA WILD CARD

Key contributors to the economic health of the horse racing enterprise in the United States are the summer meets at Del Mar and Saratoga Race Course, tracks located on opposite coasts.  Betting at their recently completed meets broke existing records.

In 31 days of racing in 2021, Del Mar took in total handle of $569.98 million.  By comparison, in 2020, aggregate handle for 27 days was $$467.6 million.  Average daily handle for 2021 was $18.38 million compared to $17.3 million in 2020. The card featuring the Pacific Classic set an all-time wagering high for the day of $36 million.

At the 40-day meet at Saratoga, total handle was $815.51 million.  This represented a 15.6% increase over the previous record of $705.34 million in 2019.  Average daily handle in 2021 was $20.39 million.  Saratoga had paid attendance of over one million patrons.

Meanwhile, in Virginia, Colonial Downs handled wagering over 21 days of $46.87 million or $2.23 million per day.  This was a 91% increase from the 2019 meet.

Year-to-date, betting on U. S. horse races is up 17.51% over 2020 and 10.18% over 2019.

It was fortunate that the popular gatherings at Del Mar and Saratoga were able to be completed without fan attendance being limited or shut down altogether.  In this 2021 Labor-Day week, a new wave of the Delta variant of Covid-19 infections is surging and slowing economic activity.  Johns Hopkins reports that Covid cases are up 300% compared to this time last year. Major companies are delaying a return to the office for employees until early 2022, business travel is stalling, restaurant chains are closing some in-door dining facilities, and many hospitals are overcrowded. 

Whether sporting events like college and NFL football and the Breeders’ Cup will be able to accommodate full houses through the mid-to-late fall is an open question.

Copyright © 2021 Horse Racing Business

THE SPORTS BETTING JUGGERNAUT IN THE USA

Legal sports betting in the United States is a booming market (an estimated $4 billion in 2021).  Eighty percent of the states have either legalized sports betting or have introduced legislation to permit it.  In twenty states, sports betting is already operational and two more states, North Carolina and New Mexico, allow sports betting at tribal casinos.

Leisure and entertainment giants are moving to get in on the action.  ESPN, owned by Walt Disney Company, is trying to license its brand to such major sports betting companies as Caesars Entertainment and DraftKings, Inc., the latter specializing in online gambling.  ESPN is reportedly offering to let a sportsbook use its name and possibly even rename its sportsbook ESPN.

Penn National Gaming, the owner of the most horse racing tracks in the United States, bought a large stake in Barstool Sports in 2020.  Well-known brands like MGM Resorts International and Caesars Entertainment are also aggressively pursuing the sports betting market with acquisitions and apps. 

And the National Football League, for the first time in its history, is accepting advertisements from sports betting firms, with a limit of six ads per game.  The NFL has authorized seven companies to advertise: DraftKings, FanDuel, Caesars, Fox Bet, BetMGM, WynnBET, and PointsBet. The NFL embracing gambling companies is a 180 degree change for a league that traditionally spurned gambling and would not sanction a team in Las Vegas, until the Oakland Raiders moved there.

The forgoing developments are by no means the only deals in the works, as media companies like Sinclair Broadcasting and CBS scramble to not be left out. 

It may be that a significant portion of the estimated $4 billion in legal betting on sports is not new money, but rather, is money being shifted from illegal betting. If that is the case, growth in the overall sports betting market is not accelerating as fast as it appears to be.

The degree to which burgeoning legal sports betting will cannibalize, promote, or have little effect on horse racing handle is not yet clear.  The commercial future of horse racing in the United States to a large extent depends on the answer to this question. 

Copyright © 2021 Horse Racing Business