Gambling and horse racing

Gambling sustains horse racing. Without it, horse racing would shrivel up and blow away. History tells us so. Think the Seabiscuit story, brought to the nation’s attention in the excellent book and movie by Lauren Hillenbrand.

Let’s take a look at what American Experience tells us about the time period,

Open quote

By the time the Great Depression descended on the nation like a bitter cold front, horse racing in the United States was already in a deep freeze. It had gone cold during the first decade of the twentieth century, after a series of race-fixing scandals triggered a wave of legislation making betting illegal. The sport crumbled. At the turn of the century there had been 300 racetracks nationwide; by 1908, only 25 remained. The American bans proved a boon to the Mexican horse racing business, and Tijuana became a betting mecca.

In the 1930s impoverished state governments, in search of ways to increase revenues, returned to the potential honey pot of horse racing. In exchange for legalizing betting on the sport, one state after another exacted steep taxes on racing revenues. The deal was mutually beneficial to private investors and government tax collectors, and led to a 70 percent increase in the number of tracks across the country. At the racetrack, crowds turned up as large as any that had ever assembled to watch horse racing.

Horse racing, along with baseball, dominated the sports world. The horses’ power and beauty and the excitement of racing undoubtedly attracted many to the grandstands. Another draw, though, was the possibility of pay day that promised relief from the tight clamp of poverty for a week, a month, or, if a long shot finished first in the big one, even a lifetime. Source »

Kentucky Derby 2021

The 147th running of the Kentucky Derby was held this past Saturday, May 1. ABC Chicago gives an apt description of it. “ The bourbon is flowing again, flowery hats and humans are on the scene and 19 horses are ready to run the most chaotic race of their lives.” Jim McIngvale – also known as “Mattress Mack” – reportedly bet $2.4 million on Essential Quality. He lost. The BloodHorse reports the total handle for the day was in the neighborhood of $233 Million with $155.4 Million bet on the Derby itself, a 96% increase over 2020.

This was one grand day however, materially speaking of course. However, there is much, much more to be made — without having to traverse the nightmare that live horse racing increasingly presents.

Enter historical horse racing

Instant Racing, known generically as historical race wagering, is an electronic gambling system that allows players to bet on replays of horse races or dog races that have already been run. Some Instant Racing terminals resemble slot machines.

Instant Racing is a product of PariMax Holdings, a subsidiary of the Stronach Group. A competing historical racing product is offered by Exacta Systems.

Where did the idea come from? Historical race wagering was conceived by Eric Jackson, of Oaklawn Racing Casino Resort, which led to a patented Instant Racing System in 1997 that merges horse racing with video games. By the way, Oaklawn Racing Casino Resort was formerly Oaklawn Park Race Track.

In 2017 Churchill Downs Incorporated announced it was investing approximately $60 million to construct a state-of-the-art historical racing machine facility in Louisville. CDI continue to diversify in this direction.

A declining sport?

The routine cruelty, injury and killing of racehorses has made horse racing a messy business and an ongoing public relations nightmare. Some tracks are struggling, having to rely on money generated by on-track historical racing revenues to pay their expenses, including prize money. This is not a good sign.

Is live horse racing a declining sport? We think so.


Fund for Horses Logo

3 thoughts on “Gambling and horse racing”

  1. Since 95% of purse money is derived from casino subsidies, in most states, I don’t consider that a side issue.
    Of course gambling is a part of it, but certainly doesn’t financially sustain it and hasn’t for years.
    Once the casino subsidies end then most tracks will shut down even with the gambling.
    In some states, without casino subsidies, you’re 100% right that gambling sustains them like KY and CA, but the majority of tracks will shut down once the casino subsidies end.
    I suppose I need to clarify that gambling on racehorses vs. gambling on slot machines.
    Nevertheless we both want it to end and hopefully it does soon.

    Like

  2. I take issue with a few things that is and is not in this article.
    “Gambling sustains horse racing,” – no it doesn’t and hasn’t for many years in most U.S. states including Canada.
    Other than the Triple Crown races, which brags about their million dollar wagering profits, the other 90% of races run in this country is actually financially sustained by you and me – the taxpayers and the billions in casino subsidies and/or corporate welfare.
    In most states, the majority of tracks would have shuttered a long time ago if politicians hadn’t rescued the horse racing business by cutting backroom deals with the horsemen groups AKA HBPA chapters.
    For example, the Pennsylvania HBPA receives about $230 million a year from a tax on casino slot machine revenues. Since the financing began in 2004, Pennsylvania horsemen have collected about $3 billion.
    So about 95% of the purse money is derived from slot machines to keep horse racing going because the gambling bets are not enough obviously given about 5% – not enough to keep the doors open or lights on.
    When a neutral economist group looked into the horse racing’s job claims in PA, they were simply untrue or grossly inflated by intertwining other agricultural industries with theirs when really those other industries would survive just fine without horse racing.
    Nevertheless, their job claims were statistically insignificant – only .02% of the entire workforce in PA.
    Let me repeat that: .02% not 2%!
    The investigation also found that both Democratic and Republican politicians got huge political cash handouts from horse racing to ensure that the money flowed from casino profits to the HBPA while the residents of PA got continually shafted and so did our children, our education facilities and local community essential services.
    Who said that politicians care for their constituents?
    Well we finally have a honest politician who is proposing, and it probably will pass, that PA stop supporting horse racing with monies that should be going to educating our children instead of a bunch of racehorse abusers/killers.
    The legislature has to make a choice,” said Susan Spicka, executive director of Education Voters of Pennsylvania, a pro-public education advocacy group. “They can either fund college students who will become our teachers and nurses or continue to give $200 million to wealthy horse owners, many of whom live out of state.”
    This same scenario plays out in any state that supports horse racing with casino profits and the monetary figures are pretty close as well, but the end result is the same; taking money intended for our education and communities to support a business that kills racehorses.
    Incidentally, most of these deals made between politicians and horsemen are conducted in secrecy with very little transparency of community representative and then announced AFTER the ink is dried.
    That’s one thing that’s going to change and it should have right from the beginning.
    Horse racing has been declining for years and once the funding is stopped it will put an end to this brutal business that requires inhumane treatment and abusive business practices to keep racehorses flipping a buck.
    Sources for my comments:
    https://www.inquirer.com/news/wolf-horse-racing-subsidy-purses-disaster-college-tuition-20210203.html
    http://educationvoterspa.org/blog/tell-pa-lawmakers-to-fund-kids-over-horse-racing/

    Like

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s