Most American racetracks were built for crowds in the days before remote betting from almost anywhere. As a result, many of them are disadvantaged, vis-à-vis advance deposit wagering operations, by the upkeep on substantial brick-and-mortar facilities.

The mismatch is similar to the competition that pitted Blockbuster against Netflix and cable television distributors of movies. The number of Blockbuster stores in the United States plummeted from approximately 5,500 in 2005 to 300 in late 2013, and Blockbuster’s parent company, Dish Network, plans to close all company-owned stores by early January 2014.

The communication and information technologies that spelled the death knell for Blockbuster have also roiled racetracks. Yet a key distinction between Blockbuster and racetracks is that the latter were meant to be entertainment venues.

Racetracks that offer an ambience and experience people enjoy can succeed in both the on-track and off-track markets. However, racetracks without the inherent advantages of a Del Mar, Keeneland, or Saratoga, must rely predominately on advance deposit wagering and alternative gaming, or else go the way of Blockbuster.

The vast majority of new racetracks are being incorporated into racinos, with limited seating for watching live races. Some are little more than television studios for advance deposit wagering and simulcasting.

Owners of the host racetracks of premier events like the Triple Crown races face a less obvious and more difficult choice regarding seating capacity. For instance, should Gulfstream Park be greatly expanded so as to accommodate a large turnout for the Florida Derby or an occasional Breeders’ Cup—with the liabilities of year-round plant maintenance and being close to deserted most of the time? Similarly, should historic but old and rambling Belmont Park be razed and replaced by a fan-friendly downsized racetrack where 5,000 patrons don’t feel lost?

One thing is clear–very few mega-racetracks will survive a digital age in which viewing/wagering on races is readily accessible no matter the distance between track and customer.

Copyright © 2013 Blood-Horse Publications. Used with permission.