Photo courtesy of Eclipse Sportswire
The betting handle at this year’s Kentucky Derby was down from last year. That could have been the result of lower attendance at the track on Derby day due to heavy rains. The enormous crowd of 151,616 was down from last year’s record 165,307, but not by much when you consider the awful weather!
The event remains the largest non-NASCAR sporting event in America, even in the rain.
The decrease in betting handle was also slight relative to 2012’s record-setting numbers: $184.6 million versus $187 million. The number was still big enough to be the second-highest Derby handle of all time.
The amount of money wagered in casinos in 2012 was also way up. U.S. casino gaming revenue was $37.3 billion last year. This was the highest amount since 2007 when, prior to the effects of the recession, Americans gambled $37.5 billion.
The increase in casino numbers is largely due to the growth in legal brick-and-mortar casinos in states with newly enacted gambling legislation. Four states with casinos in their first year of operation in 2012 saw double-digit growth in gambling revenue. New York, Maryland, Maine and Kansas all had new casinos in 2012. Kansas had a 604% increase in revenue, amounting to $92 million in additional tax revenue for the state (casinos in Kansas are state-run).
Horse racing, however, remains virtually non-existent in Kansas.
The Woodlands, a greyhound and horse racing track on the Missouri border, closed in 2008 after a failed attempt to keep it afloat with slot machine revenue. The state only shared 25% of that revenue with the track, which was not enough in the end. Free-standing casinos have no such restrictions and are currently thriving. There is a bill to try to work out a more equitable share of slot revenue between the state and The Woodlands (or any other track that chooses to open and operate in Kansas) that currently is stalled in the legislature.
The huge handle on the Kentucky Derby proves that gambling on horse racing is an attractive product that American bettors are excited about. They simply need to be presented with quality racing and a unique and exciting experience. It is not fair to compare the Kentucky Derby with a day at The Woodlands as it would be unfair to compare The Bellagio on the Vegas strip with a racino off the interstate. But it’s a paradox: how do you afford the purses and renovations it will take to provide racing fans a quality experience without any way to increase your current revenues?
If only states like Kansas would make the same bet on horse racing that they’ve made on casino gaming, chances are they’d see a good return – so long as the track invests the money in what matters. Take a look at tracks like Saratoga Race Course. Shorter meets, quality racing, attractive facilities, great food, events and programming geared toward recreational race fans and families. The racetrack can be a gambling experience that is 180 degrees different than casinos.
It takes a little care and feeding, and it requires tracks and government to not nickel and dime fans and horsemen and bleed the sport dry.