Industry pundits have been predicting the demise of horse racing betting for years. However, while the number of overall race days has been trending down, the arguably more important metrics of purse sizes and total betting handle are increasing.
In fact, according to economic indicator data recently released by Equibase, the U.S. horse racing industry just recorded its largest annual wagering handle numbers since 2009. It’s important to note that this occurred across over 30% fewer races overall.
Some of the key points from the data include:
- Total wagering handle topped $12.2 billion in 2021, an 11.86% increase over 2020
- U.S. purses exceeded $1.1 billion, a 35.77% increase over the previous year
- U.S. race days and total races jumped by more than 20% over last year
- The average field size contracted from 7.94 to 7.37, a 7.20% decrease
- The average purses per race day increased by over 10% to just shy of $290,000
Most notably, the U.S. horse racing industry achieved this growth while recovering from the effects of a global pandemic, significant negative press resulting from well-publicized scandals, safety issues, and regulatory changes stemming from new legislation.
Here’s NTRA President and CEO Tom Rooney on the numbers:
"Against an extraordinarily difficult backdrop, the resiliency of Thoroughbred racing was on full display in 2021 as we concluded the year with significant growth in purses and total handle of more than $12 billion, the highest since 2009.”
The Horse Racing Integrity and Safety Act
The passage of the Horse Racing Integrity and Safety Act takes effect on July 1, 2022. Industry analysts believe the adoption of enhanced safety regulations will improve the public’s perception of horse racing.
Among other changes, the Integrity and Safety Act will transfer the responsibility of drug testing and policing from individual state commissions to a centralized laboratory accreditation, drug testing, and enforcement program. The change will bring much-needed national conformity to horse racing.
Tom Rooney is also optimistic the legislation will ultimately benefit horse racing:
“We thank our customers for their ongoing support as their wagering dollars continue to fuel our industry. As we turn the page to 2022, we look forward to the beginning of a new era for U.S. Thoroughbred racing with the launch of the Horseracing Integrity and Safety Act and an even greater focus on equine safety and welfare and the integrity of America's oldest sport.”
OTBs and Advance-Deposit-Wagering Apps a Contributing Factor
Off-track betting has been available since 1978 thanks to the Interstate Horseracing Act (IHA), which lawmakers amended in 2000 to pave the way for legal online horse racing betting.
Legislators further clarified the IHA in 2006, and it didn’t take long for the first advance-deposit-wagering sites to begin taking bets online.
In states where horse racing betting is legal, advance-deposit-wagering sites (ADWs) and apps have been building customer bases and quietly growing the industry.
Some of the nation’s biggest operators are generating more horse racing betting revenue than ever before through their ADW platforms. Case in point is Churchill Downs, which derives a growing percentage of its horse racing betting handle through its online arm, TwinSpires.
Mike Murphy of BettingUSA.com had this to say:
“Major sports betting operators are starting to integrate horse racing betting into sports betting apps. FanDuel and BetMGM now offer horse racing betting, and this is going to lead to more cross selling opportunities between mainstream sports and ‘America's Oldest Sport.’ Events like the Kentucky Derby will inevitably become more enticing customer recruitment opportunities for gambling companies in the United States.”
Online horse racing betting is legal in more states than not today. Many states regulate and license ADWs, while others simply permit online wagering under existing legal frameworks.
And with sports betting legal in more than 30 states, the crossover opportunities are rapidly expanding. As parimutuel wagering continues to grow while legal sports betting expands, all signs point to horse racing and sports betting being complementary activities, with the best days for both still ahead.