HRU Feedback (2018-03-25)
Faraldo: Gural quote is required reading for anyone questioning intentions toward racing
It has long been a belief by many in the horse business that “the horsemen are the guardians of the sport,” and there is no doubt that we have a direct and abiding interest in making sure this game survives. And while we have long known that some entities and individuals who have benefitted from harness racing would rather see us and our game disappear, rarely is this unfortunate and ugly truth detailed as blatantly as it was in Harness Racing Update on March 18.
In an article discussing the future of marketing harness racing and the relationship between racino/casino owners and racing (full story here), Jeff Gural was quoted on the record as admitting that “the tracks – including me, if I’m just wearing my ‘track hat’ – all want harness racing to disappear as quickly as possible” and “so they are going to do whatever they can do to make that happen.”
While Mr. Gural’s conclusion may not be a surprise to astute watchers of the game, the cavalier manner in which he so easily dismisses an agriculture/harness industry that employs tens of thousands of New Yorkers is stunning and should be required reading for every regulator and legislator who has heard our horsemen’s and breeder’s concerns in recent years. Sadly, it seems the owners have forgotten that their entire VLT model was made possible by a thoughtful legislative initiative that mutually benefitted education, agriculture, breeding, racing and the state treasury. And now it is clear that at least some of them are not only not our “partners,” but are absolutely an enemy among us actively seeking to kill our industry.
So while there are certainly exceptions – I’m proud to report that the SOA of NY has been working very effectively in partnership with management at Yonkers Raceway to expand racing into new global markets and concurrently grow our domestic handle – the reality is that too many track owners have no interest in helping to support racing through innovative marketing or other means. Yet there are those who want us to take their advice, use and spend our purse money, while they plot our demise. This is despite the fact that in New York there is a marketing and promotion allowance that the state provides the operators of these VLT machines, who collectively take in $300 million per year, for the promotion of both video lottery gaming and horse racing. The state clearly understands the value of allowing the operators to seamlessly market the sport along with their own interests.
Once again, let’s be clear that no one is naïve enough to be particularly shocked that this is how the racing industry is treated by some of our supposed “partners”. However as partners and guardians of the sport – guardians working seemingly alone every day to find new ways to help our industry grow and thrive – we have a duty to continue to try to work cooperatively despite such comments which and speak out about the clear, direct interests lined up against us… and which was finally just confirmed for all of the world to read.
— Joe Faraldo / president SOA of NY
Marketing efforts need local focus
In reading the column on a “nationwide” marketing initiative (full story here) and statements by both sides I can easily see their reasoning. Jeff Gural is correct in his assessment of the future. Pragmatic trends are much too clear not to accept facts that the industry is downtrending. Mike Tanner is correct that the recent pricey attempt at a national social media marketing failed to attract new fans.
So where to go from here?
Personally I have stated to all the players for years that any attempt at a “national” program will never get approval and possibly rightfully so.
However, there is no reason to think that “local” regional — track by track — programs won’t succeed. Remember what the late Tip O’Neil said about politics: “… must be local.” The same mindset needs to be applied to the sport. In the case of local harness racing participants — drivers, trainers, horseman and horseman associations — it is well worthwhile to attempt a timed program to interest and gain local fans. A sport cannot survive without “fans in the stands.” In discussions with both Mr Tanner and Mr Axelrod of the USTA I’ve attempted to explain this rationale. Their job as the main overseer of the sport should be to put together a simple quantified blueprint ‘How To’ template that local associations can use to market locally. Yes, local funding must be a small percentage of each purse. Yes, local horsemen are aware of the industry downtrending and their own futures. Thus, they must be willing to put “skin-in-the-game” and be active supporters of their LOCAL plan headed by their horseman association. In my mind I’m not talking about some “big money marketing firm” initiative. I’m speaking about a marketing associate at each venue who has a defined budget and purpose; and of course is held accountable for success at the local level.
Personally, if I hadn’t started this discussion years ago only to see it fall on deaf ears I wouldn’t be bringing up again now.
In my opinion where does the failure reside? It is easy: USTA. Racetrack management with casinos surely won’t support it. Why should they? Add five new slot machines, market heavily to their “local” demographic and voila — an instant ROI. However, horsemen need to quickly start focusing on their future as Jeff stated. It ain’t pretty!
— Jimmy Bernstein / Boynton Beach, FL
More thoughts on marketing
In 2017, the purses for harness racing in the USA were about $430 million: the proposed 5 per cent marketing fee would generate a nice-sized, owner-funded pot of over $20 million per year.
We have about 5,000 active racehorse owners. These are the folks that bankroll the harness racing industry. They own the 20,000 racehorses and shelled out $100 million last fall for the new cohort of yearlings. In 2017, they saw the FMV (fair market value) of their racehorses decline from about $200 million to about $160 million. And recorded 2017 operating EBITDA (earnings before interest, taxes, depreciation and amortization) red ink of about $150 million.
So I don’t think that whacking the owners (a truly endangered species) with a new $20 million annual tax is an economically sound concept.
Only the harness racing horseplayers, who lost about $300 million last year, generate greater annual losses.
But I really, really like the idea of all industry stakeholders, including state governments, contributing to a focused marketing fund. Perhaps we could start with The Hambletonian and help create a big-time media event like the Prix D’Amerique or the Elitloppet. As an owner without a Hambletonian eligible colt, I would certainly participate.
— Joseph E Smith / Vero Beach, FL
Gural at it again
I see Jeff Gural is at it again. Do things my way or harness racing is going to die!
I realize racing of all types needs more marketing and general advertising to help it stabilize and grow its product. However to say Jeff Gural and the Meadowlands is the only way is just not realistic. Harness racing did fine many years before there ever was a Meadowlands and will survive and still could prosper even without it. If Jeff Gural thinks good racing will end if Meadowlands ends winter racing he must think his competing other tracks will do nothing to pickup the slack. As recently reported in Harness Racing Update, Yonkers has recently improved its handle even with the Meadowlands running concurrent with them. Pompono Park in Florida would most likely also benefit and upgrade their racing program and I am sure other tracks would look at their dates and racing program to try and take advantage of a Meadowlands loss.
One last note, casino gaming is getting increasingly completive. Racetracks and states have to realize the market is limited and the days of easy money are over. Jeff Gural has already experienced this at his Vernon Downs track. He threatened to shut it down had the state not reduced his taxes due to the increased competition due to added casinos in New York state. Pennsylvania also has increased the number of casinos in our state so stay tuned to see what happens here as the new casinos open.
I hope for the best, but the industry must be realistic and realize more promotion of the sport is needed to survive long term. Thanks for the article.
— John Chambers / Lansdowne, PA
Grandson and Breaking Stride series caused me to break my promise
Forgive me for breaking a promise I made to myself three years ago while my wife and I were still financially, physically and emotionally involved in harness racing and I still had the enthusiasm to put ideas on paper and send them to “the shakers and movers”, the “old white men” of the sport.
No more would I do that. There is a deeply ingrained bias against change held by those folks who,on a daily basis, give established meaning and breathe new life into Einstein’s definition of insanity.
Our grandson Logan, age six, along with the “Devo Rides” series in the most recent HRUs convinced me to do otherwise.
“Grandpa, I don’t want you to buy anything on Amazon ever again, the six-year-old said. I asked him why and his response was “They put my favorite store (Toys r Us) out of business.”
No sense trying to explain that the now irrelevant chain put itself out of business, but his comment caused me to revisit a belief I formed about breathing new life into harness racing.
This is going to take a while, so if you want to at least consider a contrarian position, bear with me. For the record, I am not a sexist or racist or anything else liberals who use those terms to denounce anyone who disagrees with them. Those of you who know me will attest to the fact that I am none of the above.
I contend that you can write off the ability to engage a meaningful number of people over age 21 in active participation in our sport/business as bettor, owner, spectator etc. That audience’s attention and commitment, financially and otherwise, is already directed elsewhere. Don’t waste five per cent of the sport’s shrinking supply of dollars on a fool’s errand.
The only way I see a renewal of the audience/spectator and then active participant in any aspect of harness racing is by engaging young people, by which I mean children, in the various aspects of harness racing.
The New York State Lottery had a great slogan several years ago something to the effect that you “had to be in it to win it.” To me, that translates into getting people to the track.
No one goes the tracks in Delaware, but the summer meet at Ocean Downs is enthusiastically supported each summer and it has little to do with the marginal promotional efforts the track expends. It has to do with facility location and Ocean City as a family resort. And no we aren’t going to close Harrington or Dover Downs or relocate them.
So how do we build the audience? Several years ago I wrote a series of proposals designed to create an awareness of harness racing among elementary, middle and high school students. They were simple and inexpensive and, at least to me, had the possibility of achieving a goal because they capitalized on existing avenues of approach. I sent them here, there and everywhere… to the Delaware Standardbred Owners Association, to USTA, to Mr. Gural and his minions, to key figures in the sport. In most instances I got a polite thank you and interesting ideas we’ll get back to you. Not! In other instances the silence was deafening.
Maybe they were bad ideas, ill conceived and irrelevant. I’ll never know because no one told me.
Logan, my beloved grandson, is not interested in getting the toy from Amazon. He wants to go to the store and see the product, do a test drive and then bug the hell out of mom, dad or grandpa and grandma to buy it for him. That was the thrust of the proposals I put forward. I still think they have merit.
— Lawrence Mayer / Ocean View, DE
Anthony MacDonald: No survey needed, secret is affordable horse ownership
Last week I found myself reading the story about the marketing survey request from Jeff Gural.
As I read it, I was shocked that our industry had apparently not learned much from the past. It appeared we once again were choosing inaction over anything remotely proactive.
But then I asked myself two very important questions I think we should all consider:
1) What are we marketing?
2) Who are we marketing it to?
Those two questions are the two biggest left unanswered in horse racing across the board today.
I think we can all agree that our investor base is dwindling, as is our fan base and gambling clientele.
So where are the next generation of potential gamblers and investors coming from and how do we attract them to horse racing?
For those of you that don’t know how dire the situation is, our industry’s growth from a governmental stand point can only be judged in three ways:
Wagering revenue, attendance, and memberships sold. Imagine working for the governor (or premier in Canada) and being asked to explain horse racing:
“Memberships are down by nearly half over the last decade. Attendance is waning and wagering is not generally high enough to support the purse pool and day-to-day costs at any facility.” Does that sound like a wise investment if you’re an elected official? We have government deficits all over North America and this is the business model we are standing behind?
We need to rethink how we market horse racing. How can we grow the industry and attract fans who will wager on this industry?
Currently, our clientele is aging and it is not being replaced. The younger demographic, for the most part, is not interested in the slow drag of horse racing and its confusing, archaic forms of wagering. Simply put, our game is old and its draw has been dwarfed by technology.
So, let’s try something new. Something that attracts newcomers with pure engagement, heightened customer service and a chance to experience something unmatched anywhere else.
1) What are we marketing?
2) Who are we marketing it to?
For three years, I’ve set out to show the industry a better way forward: a way to attract newcomers and bridge the gap between horse racing and the general public. A way to bring people into the sport who otherwise would never give horse racing a second look. Some didn’t gamble, some didn’t have the budget to slap down thousands of dollars for a high risk investment like horse racing. But they all liked horses, and they were intrigued by the idea of joining an engaging experience, where affordable ownership leads to participation in the game itself.
Where else in society does that happen? No one buys tickets to a hockey game with the chance to play right wing. These people are now completely immersed in the game that hooked us all years ago. Where else in society can you spend such a small amount of money and continue to be entertained for a long period of time?
All of this time, we’ve have been trying to convince people to come out to the track and wager, and the answer has continuously been, “no thanks”.
I’m suggesting we focus on building a rapport with the general public in a different way — through affordable horse ownership — and begin to energize this sport with engaged participants.
The by-product of this clientele is obvious: the potential for growth in gambling from a new clientele who otherwise wouldn’t dawn the doorway of a racetrack or casino. We have simply been focused on the egg and have forgotten about the chicken. Gambling on horses did not come before racing, it always was a by-product, but along the way, we’ve forgotten that.
Mr. Gural is asking the wrong people for help. We don’t need a survey. Everyone in this industry knows we need a better marketing budget and strategy. But we all know the likelihood of forming any consensus on how to use it.
That money has to be redirected at a governmental level. Policies and contracts would need amending, and yes, we would also need private advertising money. But how could you get such advertising with no one present to advertise to? One thing is absolutely certain: If we don’t discontinue our divisive ways, no government on earth will take us seriously. We need to stop fighting at the highest levels, which only widens the divide in this industry at the lowest levels.
We need unity, and we need a plan that benefits the Meadowlands, Yonkers, Woodbine and everywhere in between. We need leaders who recognize they will not always agree with one another, but support one another’s initiatives. We need the old guard of harness racing to step aside and allow people to usher in the 21st Century.
What we have done in the past has led us to where we are today. I suggest a new approach, one that is inclusive, transparent, and interesting to the people we are so desperately looking to attract.
I didn’t ask for a survey or a poll to be done three years ago. I didn’t need one. The information I collected personally first-hand in politics led me to start thestable.ca. I knew I couldn’t do any of it alone, so I asked for Mr. Gural’s help and he obliged. Tom Grossman of Blue Chip Farms understood the importance of what we were trying to accomplish and he helped, as did the USTA.
I don’t want any more surveys, I want action. If you don’t agree with my views on fractional ownership that is completely fine. I agree that we need a larger marketing budget spent wisely by people who will market outside of the industry. But in order to succeed moving forward, someone needs to be sure we know the answer to the two questions I asked at the start:
1) What are we marketing?
2) Who are we marketing it to?
— Anthony MacDonald / TheStable.ca
In last Sunday’s Hollywood’s Hits, Bob Heyden wrote:
My Field Marshal and He’s Watching have now made Art Major the one and only stallion who can say he’s sired a sub-1:47 winner in both the Northern and Southern Hemisphere — 1:46.9 for the 6-year-old Down Under bred My Filed Marshal — a new mark there — and He’s Watching, whose 1:46.4 in the Meadowlands Pace still stands as the fastest ever pace in 41 editions
Sorry, Hollywood, but He’s Watching is by American Ideal.
— Kendra Casselman / Peterborough, ON