What if it all goes wrong? (Part 2)

What if it all goes wrong? (Part 2)

April 4, 2021

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by Trey Nosrac

Part 1 can be read here.

“Dangers lurk everywhere. The sport faces decoupling from casino revenue, PETA, offshore gambling, and lawsuits against participants using illegal drugs. Not to mention zero national exposure, computers used for multiple devious means, aging demographics, new forms of sports gambling and about six more problems that escape my mind. Somehow, someway, harness racing is still afloat.”

My friend smiled and said, “Trey, harness racing is a tough old bird.”

“You said you would try to come up with a plan in case one of those torpedoes explode. What did you come up with?”

“So far, I’m stymied.”

“Stymied?”

“Frustrated, obstructed, hampered, blocked, thwarted, and foiled.”

“You got nothing for me?”

He shrugged. “Revenue, of course, is the problem. When you have income, you have a chance. Without it, you are a boutique pastime or a club sport. I attempted to use other models as prototypes but could not find a fit for horse racing.”

“Nothing from a guy who helped build the Internet? That is worrying news, my friend.”

He sighed. “There are four ways professional sports generate revenue.” He ticked them off on his fingers, “media contracts, gate receipts, licensing and merchandising and sponsorship.” Then he asked me, “Do you see any of these that could power horse racing?”

“No.”

“Me neither. The big economic driver for major sports is advertising on television and streaming. That will not work for harness horse racing. Hell, your sport could not even get on the public airspace during a pandemic. To 99.2 per cent of the world, a harness race is boring and pointless. Playing in the entertainment realm does not seem possible.”

“I agree. Not even a racing junkie like me watches horse racing without skin in the game. Revenuefrom admission is ridiculous. We can’t get people to come for free.”
“And,” he added, “a substantial limiting factor is that professional sports that make money consist of leagues. National media is not going to negotiate with a state or a single racetrack.”

“Lack of unity has always been a problem; there are different licenses and different enforcement. Each racetrack is like the House Targaryen, the House Essos, and the Wildings in Game of Thrones.”

He nodded and went on gloomily, “I tried professional poker tournaments as a model. In poker tournaments, the purse money comes primarily from the players. The big tournaments have massive numbers of entrants who pay large entry fees to support extremely top-heavy payouts.Poker doesn’t look like a promising prototype for racing.”

I asked, “Does this mean you are admitting failure?”

“To this point. I don’t see a magic bullet.Horse racing has always depended on gambling to keep the train rolling. Casino gambling partially funded horse racing and boosted some states, but the money will not last.The best I can foresee is that your sport will chug along, shrinking each year until it evolves into a niche sport for a handful of wealthy diehards.”

I winced, “That’s been the diagnosis ever since horse racing lost our status as the only legal gambling game in town.”

He nodded. “While casinos helped,legalized sports betting will hurt, and theclock is ticking.The spread of legalized sports gambling since the Supreme Court’s May 2018 ruling will not stop and will challenge horse racing’s existence.”

“Why won’t legalizing sports gambling help?”

“Horse racing is different from other sports. Other sports can have money wagered without directly benefiting from the wager. In the horse racing game, the participants need to share in any wagering.”

“So, a bet is not always a bet?”

“No. Pari-mutuel wagering is different. If you place a bet of $100 that the Cleveland Cavaliers win the 2021 NBA title, you could get some incredibly high odds today and a guaranteed payout based on the odds on the board the instant that you wagered. In horse racing, the odds change based on the money bet. That is the way it has been in racing for a century. Horseplayers know that when you punch in your bet, the odds can change. Sometimes they change a lot. For some handicappers, those last-second fluctuations of odds are the most import part of their wager.”

“People seem to like it.”

He gave a hand waffle motion, “Yes and no. The people who have grown up with this form of wagering are fine with pari-mutuel gambling. The diehards will run out the clock with this type of gamble because it’s all they know. Young people will not love pari-mutuel wagering. Casual gamblers will not read pages of data.”

“So, you are saying we need to go to fixed-odds wagering.”

“Racing horses must compete with players entering the sports gambling door. Those new gamblers will have plenty of opportunities. Watching the betting clock tick down will hold less appeal in the future.”

“You’re rambling a little here. The assignment at hand is to find a new model.”

“I can’t so far.”

“Well, that stinks.”

“I am not a harness horse racing expert. You are my only source.”

“Hah, you need better sources.”

“All I can do is give you my opinion.”

“Hey man, your opinion is better than nothing, and it will remain our secret.”

He said, “Harness racing should somehow coalesce under a simple structure and national organization, embrace fixed-odds wagering and view the federal legislation for sports gambling as a reason for reorganization to fight future battles with a bigger army. In my opinion, those should be the starting points.”

I laughed. “Oh, is that all! Our sport is well known for cooperation, innovation, and flexibility.”

He smiled. “It may be complicated, but for your little world of trotters and pacers, it is life or death.”

I smirked, then sighed. “As usual, Trey will need to step in and right the ship just as the raging waters approach the starboard bow. I have an idea for harness racing should events take a turn for the worst. I’ll make a few calls to my people and get back to you.”

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