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Can Track Tech and Social Media Help Horse Racing Regain Its Audience?

Placing any bets on the ponies today?

The 144th running of the Belmont Stakes, the final jewel of this year’s Triple Crown, took place two weeks ago on Saturday, June 9th at Belmont Park in Elmont, New York. Those placing bets for this year’s race had to do some scrambling and fancy footwork the day before the race as news spread that the dual classic winner, I’ll Have Another, was not only going to be scratched from the race, but also retired.  Shocking! Devastating! Unbelievable! Hellacious! These were just a few of the words used to describe the drama that was unfolding at the park less than 48 hours before race day.

Am I a horse racing fan? Not really. Do I love watching beautiful horses and the pre-race show? You bet I do! Perhaps it’s the stories about the owners, the horses, and the challenges. The lovely ladies in their outfits and oh, those hats! My familiarity with the horse racing world began when I was living and working in Cincinnati, OH. Occasionally, I would drive from Cincinnati to my parents’ home in South Carolina:  I-75 South to I-40 East to I-26 East. As I would approach Lexington, KY, I’d keep my eyes open to see the horses roaming the property of the ranches along that stretch of freeway….what beautiful animals! Also while living in Cincinnati, I met a few folks from horse racing country. I have done my share of derby parties with mint juleps and derby pie.

I’ll Have Another – 2012 Kentucky Derby Winner – Ridden by Mario Gutierrez (Benoit Photo)

When I decided to write this post on horse racing – that’s right horse racing – it was just a few days before the running of the Kentucky Derby on May 5, 2012 at Churchill Downs in Louisville, Kentucky. I had just finished listening to National Public Radio’s (NPR) Here and Now, and one of the subjects discussed on the May 3rd program was “Horse Racing Industry Looks to Regain Audience”. [Ref 1]  Could this be possible? When did the horse racing industry – once the dominant sport in the U.S. – lose its edge? How did it lose its audience? When did choosey gamblers stop choosing horse racing as the sport to bet on?

This post provides a short history of horse racing as a sport and industry, addresses some of the challenges it is now facing, and how the industry is using technology to keep its current customers as well as entice and attract new fans, especially those from the millennial and Gen-X crowds.

Horse Racing – Early History

Horse racing is an equestrian sport that has a long history. Archaeological records indicate that horse racing occurred in ancient Babylon, Syria, and Egypt. By 648 B.C., both chariot and mounted horse racing were events in the ancient Greek Olympics. In the Roman Empire, chariot and mounted horse racing were major industries. [Ref 2]

Italy Palio Horse Race (Ancient Sports – Equestrian Events, Source: http://www.perseus.tufts.edu)

Modern-day horse racing picks up around the 12th century. English knights returned from the Crusades with swift Arab horses. Over the next 400 years, an increasing number of Arab stallions were imported and bred to English mares to produce racing horses that combined speed and endurance. Matching the fastest of these animals in two-horse races for a private wager became a popular diversion of the nobility. [Ref 3]

The maturing of horse racing into a professional sport began during the reign (1702-1714) of Queen Anne, when match racing gave way to horse races involving several horses on which the spectators wagered. Race courses sprang up all over England, offering increasingly large purses to attract the best race horses. These purses in turn made horse breeding and owning horses for racing profitable. With the rapid expansion of the sport came the need for a central governing authority. In 1750, racing’s elite met at Newmarket to form the Jockey Club, which to this day exercises complete control over English racing. [Ref 3]

History of Horse Racing – United States

British settlers are credited with bringing horse racing to the new world. [Ref 4]  The first horse racing course built in the United States was in Hempstead Plains in Nassau County, New York. The course, Newmarket, opened its gates in 1665, and in doing so, kicked-off the rich tradition of the horse racing sport in America. Due to the success of Newmarket, many other racing tracks were opened, including the Belmont track in New York. For the next two centuries, tracks were opened and closed around the New York area. [Ref 4, 5] The tracks were operated by the rich and famous to showcase their horses.

Some historical notes in American horse racing [Ref 4]:

1864 – track built at the popular summer health resort in Saratoga Springs. The inaugural meeting was conducted, and America’s oldest stakes race – The Travers, named for the first president of Saratoga – was staged.

1865 – the development of organized horse racing in America did not arrive until after the Civil War when entrepreneurs began treating the sport as a business – organizing and promoting betting by the general public.

1875 – On May 17, 1875, in front of an estimated crowd of 10,000 people, a field of 15 three year-old horses competed in the first Kentucky Derby. Today, the Kentucky Derby is the pre-eminent thoroughbred horse race in America.

1890 – horse racing grew explosively; 314 tracks were operating across the country.

1894 – The rapid growth of the sport without any central governing authority led to the domination of many tracks by criminal elements. In 1894, the nation’s most prominent track and stable owners met in New York to form the American Jockey Club, modeled on the English version.

1890-1900 – Frenchman Pierre Oller developed the pari-mutuel wagering system, the process by which betting at American tracks is done today.

1920s – Legendary racehorse Man o’ War rescued American horseracing in the 1920s.

1950s and 1960s – The sport prospered until World War II, declined in popularity during the 1950s and 1960s and then experienced resurgence in the 1970s triggered by the immense popularity of great horses such as Secretariat, Seattle Slew and Affirmed.

1969 – Until 1969, horse racing had traditionally been a male-dominated sport with women playing an increasing roll over the years. Female jockeys burst onto the scene when Diane Crump became the first woman jockey to ride in a pari-mutuel race in North America. That same year, Tuesdee Testa became the first female jockey to win a race at a major American thoroughbred track.

1989 – Horse racing is the second most widely attended U.S. spectator sport after baseball. 56,194,565 people wagering $9.14 billion attended 8,004 days of racing.

Present – Thoroughbred tracks exist in about half the states. Public interest in the sport focuses primarily on major thoroughbred races such as the American Triple Crown and the Breeders’ Cup races (began in 1984).

At the Starting Gate, Belmont Park, 06.09.2012

Out of the Starting Gate, Belmont Stakes, Belmont Park, NY (06.09.2012)

The three most important races in North American horse racing come together to form the “triple crown.” Including the Kentucky Derby, Belmont Stakes, and Preakness Stakes. Beyond that, many racing enthusiasts enjoy the Breeders’ Cup races.

Declining Fan Audience

From the information presented above, horse racing has a storied if not fabled past around the world as well as in the U.S. So what gives? What caused a decline in the fan base and the sport over the years? According to the NPR report [Ref 1], the three Triple Crown races attract millions of viewers, but three Saturdays a year isn’t enough to support a sport that was once the most popular pastime in America. According to NPR, last year both pro bowling and poker had more national television time than horse racing.

When I logged onto my computer today, the “Sports” tab caught my eye on the MSN home page. I quickly looked to see if horse racing was included in the drop down menu. It wasn’t. I also looked under Fantasy Races and found Racing, but it was for cars. Oh well.

Empty Racing Stands (Source, WEKU, Matt Laslo)

“The headline is very sobering”, says Jason Wilson, vice president of business development at the Jockey Club. “We’re losing about four percent of our fan base each year.” Wilson’s job is to stop that loss and revive the fan base which will not be an easy task.  “Even our core fans are not extremely enthusiastic about the sport,” he said. “If you look at the numbers, 46 percent of our core fans would not recommend the sport to another person.” Those core fans say betting systems are out of date, there are too few horse races and betting facilities are often rundown, he said. [Ref 1, 6]

As a comparison to other sporting events, this past Sunday, May 17th, I watched Webb Simpson give his victory speech as the 112th U.S. Open champion. Professional golf has its superstars and tournaments year round. The National Basketball Association (NBA) brags in its commercials that it is extending its fan base to China and other countries by using Cisco Systems – a company known throughout the world as a leader in networking that transforms how people connect, communicate and collaborate. More interestingly, the NBA on Twitter has a following of 5,424,450 and growing. Lots of tweets were flying during the recent series final that saw the Miami Heat emerge as victors in game 5 on Thursday evening, June 21st.

Sadly, one of horse racing’s downfalls is one that possibly could have been avoided. One criticism is that racing ignored or pushed aside many of the technological disruptions that changed American sports and society. The well known spectator sports – baseball, football, and basketball – took to television and cable. Horse racing did not.  This was not just bad strategy; it turned out to be disastrous for the sport of horse racing.

During the 1990s, tracks attempted to expand their reach to fans by simul-casting races to other tracks and off-betting sites. Unfortunately, these deals didn’t produce the expected income that was needed to sustain the tracks. As a result the owners had less money to invest in facilities and technology.

Drugs & Steroids

So far, horse racing seems to be out of step with most of the other spectator sports in this country. However, it is in good company when it comes to illegal drugs and scandals. According to Sid Gustafson, a former veterinarian and now author, “widespread use of painkillers and steroids in horses by owners and veterinarians began in the 1960s. Phenylbutazone or “bute” as it is commonly called, seemed like a miracle drug alleviating lameness and stiffness in joints.  Back then, most racing jurisdictions prohibited the use of any drug, however, bute could be used during training.” [Ref 7]

Bute was considered a pain killer like aspirin. The problem is that it appears that too much of a good thing like bute, or medication in general, has been taken too far. In the passion of competition and in a world of big money, horses have become victims of a misguided pharmaceutical culture. If you figure that it’s all right for a human athlete to take aspirin the day or even during a competition, surely, applying the same principals to a horse would have little or no consequences. Given this thinking, owners and trainers began administering the drug closer and closer to race day. [Ref 8, 9]

Rather than further restrict drug use to remedy the situation, the industry legalized drugs. From that time, horse racing shifted from a covert to an overt medication culture, which has been recently brought to its knees. “By the time I graduated from vet school and began practicing at Playfair Racecourse in the late ’70s”, Gustafson says, “I could legally treat racehorses with nearly everything except stimulants, opiates or depressants. That left a lot of anti-inflammatory drugs, antihistamines, hormones, steroids and bleeding medications to administer to running racehorses, not to mention a multitude of vitamins, amino acids and minerals thought to help a horse endure the rigors of confinement training and racing.”

Dermorphin is found on the skin of a frog called Phyllomedusa sauvagei, which is native to South America. (Source: New York Times, 06.19.2012)

The June 19th online edition of the New York Times reports that the latest illegal drug in horse racing is frog juice. [Ref 10] Apparently for months racing officials had been hearing that trainers were giving their horses a powerful performance-enhancing potion drawn from the backs of a type of South American frog. However, post-race tests were not showing a new substance in the equine urine samples. It wasn’t  until a Denver lab was able to tweak their process for analysis that the substance was identified. Recently, more than 30 horses from four states have tentatively tested positive for the substance, dermorphin, which is suspected of helping horses run faster.

Craig W. Stevens, a professor of pharmacology at Oklahoma State University who has studied dermorphin, said the substance makes animals “hyper.” “For a racehorse, it would be beneficial,” he said. “The animal wouldn’t feel pain, and it would have feelings of excitation and euphoria.” Mr. Stevens also said dermorphin is found on the skin of a frog called Phyllomedusa sauvagei, which is native to South America. [Ref 10] It is believed that most of the dermorphin had been artificially synthesized.

The general feeling by many, including animal rights activists and groups, is that horse racing must wean itself from its addiction to drugs that no longer help, but instead weaken horses.

Catching Up

A hard lesson that hopefully has been learned by the horse racing industry is that once you lose a fan, you may never get him or her back.  Last fall, Keeneland was the first track in the U.S.to introduce smart-phone betting. [Ref 1, 6] Racing fans who are savvy smart-phone users are in love again with the sport. As one fan put it, “why wait in line when you can place your bet over the phone?” Like smart-phones, these and other moves including the introduction of fantasy racing this month are the strategies that Wilson, at the Jockey Club, wants to put in-place to leverage young fans. In the fantasy racing games, players will pick their horses in real races run each week, and be rewarded for spreading the word. I checked out the fantasy racing that has been added on the Kentucky Derby website. The graphics and applications really do give the user the feel of the race including the ability to be the owner, the trainer or the jockey.

Social media is included as a part of the strategy to lure young adults to the sport. This includes allowing the fan base to get points for creating a buzz about the world of horse racing. According to Wilson, “You’ll tweet about a story, or you’ll go to a FaceBook page, or you’ll watch a video. So it’s really kind of following [young people] where they congregate and making sure we’re part of their dialog.” The accumulated points can be cashed in to pay for part are all of future bets.

Another opportunity is to give fans an option to making the trip to the track. Since attendance at the tracks has been declining, off-track betting (OTB), video slot machines, dial-a-bet, and now online betting are increasing in use and revenue stream.

According to the New York Racing Association, horse racing is almost a $2 billion industry in the state. They like to see this figure grow and increase and the only way to do it is to introduce new ways for fans to play and participate.

And it was just last week, on June 16th,  the New York Times reported in an editorial that regulators in Kentucky had taken a significant step against the widespread doping that is putting horses’ lives and the sport’s credibility at risk. [Ref 9]  A diuretic drug routinely used on race days to shed water weight and boost horses’ performance will be banned under an overdue regulation adopted last week by the Kentucky Horse Racing Commission.  The Times concludes that this is a good start, but regulators across the country will need to do a lot more to change the industry’s cynical culture, which turns a blind eye to drug use and imposes only wrist-slapping penalties on trainers caught in the act.

How the horse racing industry embraces its future will determine whether future fans will see new audiences’ money and year-round sporting events that culminate with an ending similar to a Super Bowl or NBA series finals. Social media will definitely play a part in the future of the sport. The industry has to figure out how to compete with the flash of other sports, the stars and their personalities, and other gaming entities that have the noise, the bling and the lights.

References:

  1. National Public Radio, Here and Now, May 3, 2012, Horse Racing Industry Looks To Regain Audience, http://hereandnow.wbur.org/2012/05/03/horse-racing-audience
  2. Wikipedia, History of Horse Racing
  3. History and Evolution of Horse Racing, http://www.horseracegame.com/history.php
  4. Jockeys History of Horse Racing, Tahli Kouperstein, http://press.discovery.com/ekits/jockeys-2/media/pdf/JOCKEYS_HISTORY_OF_HORSE_RACING.pdf
  5. The History of Horse Racing in North America, Nicole Lero, http://ezinearticles.com/?The-History-of-Horse-Racing-In-North-America&id=1075530
  6. Can Horse Racing Return to Relevance? Jacalyn Carfagno,WEKU, May 1, 2012
  7. Drugs and Race Horses, Sid Gustafson, The Rail: The New York Times Horse Racing Blog, June 4, 2008, http://therail.blogs.nytimes.com/2008/06/04/drugs-and-racehorses/
  8. Track Tech: The Fight to Keep Horse Racing Relevant, Jacalyn Carfagno, WEKU, June 5, 2012
  9. Stronger Medicine for What Ails Horse Racing, New York Times Editorial, June 16, 2012

10. Latest Illegal Drug for Race Horses: Frog Juice, Walt Bogdanich andRebecca R. Ruiz,  New York Times, Online Edition, June 19, 2012, http://www.nytimes.com/2012/06/20/sports/horse-racing-discovers-new-drug-problem-one-linked-to-frogs.html?_r=1&nl=afternoonupdate&emc=edit_au_20120619

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About Vi Brown

Vi is principal and CEO of Prophecy Consulting Group, LLC, an Arizona firm that provides business and engineering services to private and public clients. Prior to establishing her consulting practice in 2001, Vi worked with Motorola, Maricopa County Government, Pacific Gas & Electric, CH2M Hill, and Procter & Gamble. As an adjunct faculty member, Vi teaches undergraduate calculus classes and graduate level environmental courses. She is also a professional speaker.

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