Massive dip in horse racing wagering in United States

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Massive dip in horse racing wagering in United States

Tuesday, April 07, 2020

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Perhaps the most surprising number in the Thoroughbred Racing Economic Indicators, released April 3 by Equibase, is that pari-mutuel handle is down only one per cent for the first quarter of 2020.

In March, many tracks throughout the United States were forced to close, and others ran without spectators following the COVID-19 outbreak. The cancelled race dates led to nearly a one third drop in races and a 23 per cent decline in pari-mutuel wagering on US races during the month.

The difficult month, which has been devastating for the US economy in general, ended a strong start to 2020 for racing. Pari-mutuel handle had double-digit percentage growth in both January (11.47 per cent) and February (12.12 per cent). Even in March, the percentage decline in handle was not as dramatic as the decline in race dates as horseplayers supported the available product, largely through advance deposit wagering platforms over the second half of the month when attendance was restricted. Those trends all seem to indicate increased interest in betting races, but the COVID-19 outbreak will put those developments on hold.

Live racing tracks and horsemen, via purses, receive a much smaller percentage of revenue from off-track wagers than those made on track.

For the quarter, wagering on US races was US$2,509,170,169.

Purses improved 1.3 per cent in the first two months of 2020, year over year, to US$149,454,640. But that positive trend also ended in March as tracks suspended racing, causing about a 30 per cent decline in purses to US$55,774,436 when compared with March 2019. For the opening quarter of 2020, year over year, purses were off 9.64 per cent to US$205,227,651. That decline nearly matched the 9.25 per cent decline in first-quarter races in 2020.

Going forward, the missed race dates and suspended operations at casino-type facilities figure to further affect total available purse money. Money from added-gaming operations like casinos and historical racing facilities accounts for more than one third of US purses.

“Like virtually every industry in the US, we in horse racing are grappling with the realities and uncertainties brought about by the COVID-19 pandemic,” NTRA President and CEO Alex Waldrop said during an April 1 conference call. Waldrop emphasised that the first priority is the health and safety of the industry's workers and fans.

March 2020 handle numbers for US racetracks plunged 22.9 per cent from a year earlier amid the COVID-19 pandemic, as many tracks cancelled live racing or conducted their meets in front of empty grandstands.

Though most tracks that operated in March suffered large handle losses, a few were able to weather the storm. Two tracks realised a great benefit from conducting races while other tracks were shut down.

American racetracks conducted 33.1 per cent fewer races in March 2020 than they did in 2019 — 1,787 compared with 2,670 — which led to the decline.

The tracks running with no spectators became completely dependent on off-track betting and advance deposit wagering (ADW) dollars.

Overall handle numbers for US tracks in March 2020 was US$721,693,989. That dollar figure was nearly 23 per cent less than the US$935,917,879 figure for the same month last year.

One of the hardest-hit of the major tracks in March 2020 was Aqueduct, which saw a 51.6 per cent decrease in handle from March 2019 on 71 fewer races. Aqueduct handled US$46,624,078 in March 2020, down from US$96,295,852 in March 2019.

Aqueduct was able to card only 64 races this March, down 52.6 per cent from 135 last March.

Other tracks to experience more than a 50 per cent drop-off in handle year to year for March were: Sunland Park (-67%), Laurel Park (-58.5%), Parx (-53.9%), Turf Paradise (-52.2%) and Mountaineer (-52.2%).


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