By Jennie Rees
LAS VEGAS–If horsemen needed a reminder of the meteoric growth in online and mobile wagering, Michele Fischer was there to provide it during a lively panel at the National HBPA Convention Thursday at South Point Hotel & Casino.
Fischer is a vice president with Sportech, which processes $11.6 billion in wagers a year globally. While exact numbers are difficult to come by, she estimates that 35 to 40% of handle on American racing now is conducted through Advance Deposit Wagering platforms via computer, phone and mobile devices.
The reason? Smartphones, she said, noting that the percentage of U.S. adults owning smartphones ballooned from 35% in 2011 to 77 in 2016. In 2013, an estimated 64 million people used a mobile device to gamble–a number expected to be 164 million in 2018, she said.
“It's not a bad thing; it's just a shift in the way our society is,” she said. “This isn't something we should be concerned about. We should be embracing it. I'd say in the next year or two you might see an app where you ask your digital assistant like Siri or Alexa, 'Alexa, please bet $5 on this track, this race,' and she confirms your bet. It's just going to grow. I'd say in the next few years we're going to see (ADW betting) being closer to 60, 75%.
“These are really interesting things for us to think about–and for you to think about. How are we addressing this? For so long, a lot of racetracks had VLT's (electronic slots) supplementing purses. We really weren't fully feeling what this shift meant for purses as far as percentages you receive, whether (betting) was on track or off track.
This issue will become more and more important as we see purse supplements from VLTs shrinking. We have to figure is our model a good model? Is it sustainable for purses moving forward?”
Horsemen get a much smaller percent from a dollar wagered through an ADW, typically 3 or 4 cents, versus a ballpark figure of 12 cents derived for purses through a track's mutuel windows.
“We have got to put this power into play. Continued status quo will mean the continued decline of our industry,” said Eric Hamelback, chief executive officer of the National Horsemen's Benevolent & Protective Association. “True and effective change can be achieved, but only through racehorse owners and their horsemen's groups coming together cooperatively with pooled resources, ideas, strategy and if necessary, forcible change.”
“Our parimutuel revenue model has not kept up with the technology,” agreed Ed Fenasci, executive director of the Louisiana HBPA. “… We need to come up with better options to formulate an equitable revenue-sharing model with the industry stake-holders. Now, I don't want to set up the ADW companies as the enemy or the boogie man or anything evil. They are managing our customer relationships now. We find ourselves in an age where, if they don't have some financial incentive, why would they develop a cool app to let you bet on your phone and make it convenient for our customers?
“I'd argue that we need to make it as convenient as possible.”
Fischer cautioned that the industry is price sensitive on both sides.
“I work primarily with racetracks, OTBs, ADWs providing them services,” she said. “So I'm really aware what they face trying to make the numbers work. And I grew up in the horse racing industry, I've owned horses and understand how challenging it is to make money. What we all have to remember, for any sport, the more points of distribution we have the better–the more places and eyeballs on our sport. That's one thing we need to work toward: having racing in every bar, having racing up in every restaurant you go in, versus just in a few places.”
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