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TRANSCRIPT
“Racing” 101
A Presentation to “The U.S. Casino Industry” Class
College of Charleston
Will E. CummingsCummings Associates
March 10, 2020[ this draft dated March 8 ]
Outline
The “Racing” Sports in the U.S.
A Little History ... “Golden Age”
The Pari-Mutuel Betting System
Economics: The Expensive Way...
Challenges Arise
Responses, and More Challenges
2
The “Racing” Sports
Thoroughbreds
Standardbreds, aka “Harness”
Quarter Horses (and other breeds)
Greyhounds
Jai-Alai
3
A Little History
Ancient history
The original Thoroughbreds
A commercial sport evolves
Prohibition in “Progressive” Era
(Re-)Authorization / Depression
The Golden Age
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5
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7
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Metairie Jockey Club, 1867
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Kentucky Derby PPs, 1907
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Pari-Mutuel Betting
Not the only way to bet!
Betting Pools
The “Takeout”
Distribution of the Proceeds
Changes with the Revolution
Evolving Challenges
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Types of Bets
Win / Place / Show
Exacta = Perfecta = Exactor
Trifecta = Triactor
Superfecta
(Daily) Double … Pick-3 … Pick-N
etc. etc. etc.
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A Complicated Game
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A Complicated Game
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A Complicated Game
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A Complicated Game
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A Less Complicated Game
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Less Complicated Yet …
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Less Complicated Yet …
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Economics
Horses cost a lot!
Substantial economic impacts
But high-cost as a gambling game
Originally high-cost to the consu-mer – except as a gambling game!
But takeout rates have risen ...
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Economic Impacts
Oklahoma 2012:
$491mn output, 6,450 FTE jobs
N.B. “Recreation and Showing” 5x that size
Florida 2012:
$906mn output, 12,188 FTE jobs
About the same size as MLB Spring Training
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Total Economic Impact
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COMPREHENSIVE ECONOMIC IMPACTS
Direct Indirect Induced Total
Employment 8,901 999 2,288 12,188
Labor Income 254.7$ 49.3$ 96.1$ 400.1$ $ Millions
Output 469.5$ 145.0$ 291.1$ 905.5$ $ Millions
THE ECONOMIC IMPACT OF THE FLORIDA HORSE RACING INDUSTRY
2012
Including horse racing, training, and breeding, race track
operations, and expanded gaming activity
SOURCES: Survey of Florida horsemen; annual state filings of Florida pari-mutuel horse race tracks,
IMPLAN.
Challenges Arise
Golden Age = “Industrial” Racing
Local ~monopolies everywhere
Changes in the marketplace:
Gambling: Lotteries ... Casinos
Television / Professional Sports
Financial + Sociological
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Rising Tide of Competition
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Responses ...
Reduced tax rates
Higher takeout rates
More places to bet (“OTB”)
Simulcasting ... betting on-line (ADW)
More days + longer hours of operation
MUCH higher volume of product
Higher quality + More competition
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Takeout Rates etc.
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“Price” of a bet (house edge):
Blackjack/Craps: ~ 1%
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“Price” of a bet (house edge):
Blackjack/Craps: ~ 1%
Slots/VLTs: ~ 7%
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“Price” of a bet (house edge):
Blackjack/Craps: ~ 1%
Slots/VLTs: ~ 7%
Instant Ticket (MA): 24%
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“Price” of a bet (house edge):
Blackjack/Craps: ~ 1%
Slots/VLTs: ~ 7%
Instant Ticket (MA): 24%
Exacta at Suffolk Downs: 26%
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Places to Bet in N. America:(in 2006)
Horses: 1,027
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Places to Bet in N. America:
Casinos etc: 1,378
Horses: 1,027
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Places to Bet in N. America:
Slots / VLTs: 19,695
Casinos etc: 1,378
Horses: 1,027
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Places to Bet in N. America:
Lottery Tickets: 214,284
Slots / VLTs: 19,695
Casinos etc: 1,378
Horses: 1,027
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[gambling-site homepage]
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Lottery Tickets: 214,284 +
Slots / VLTs: 19,695 +
Casinos etc: 1,378 +
Horses: millions
Places to Bet in N. America:(today)
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[gambling-site homepage]
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[gambling-site homepage]
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[gambling-site homepage]
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Responses ...
If you can’t beat ‘em, join ‘em ...
Crude video games ...
Video poker ...
Video slots ...
“Real” slots ...
Table games ... full casino experience
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Slot “Subsidies” to Purses
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“Historical Racing”
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“Historical Racing”
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Historical Racing
Major States ...
Statistics ...
Assessment ...
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Historical Racing
Major States:
Invented in Arkansas
All over Wyoming
Doing best in Kentucky
Just starting in Virginia
Statistics ...
Assessment ...
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Wyoming: 8 locations
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Historical Racing
Kentucky: 4 locations
$106 to $312/day/machine
Virginia: 4 locations
$138 to $380/day/machine
Compare: “good” slots ~ $300/day/
So, doing pretty well! But ..
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Historical Racing
Major States:
Arkansas: replaced by real slots
Wyoming: small state, no casinos
Kentucky: horse-mad, no casinos *
Virginia: no casinos ... yet!
Statistics ...
Assessment ...
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Louisville: Caesar’s Casino
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Louisville: Derby City
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Conclusions
Still the “expensive” option
Still complicated
Still challenged by the competition
But revolutionized by simulcasting and ADW / internet wagering
Gambling game: doing OK
But no longer need 100s of tracks
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[gambling-site homepage]
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Thanks
Doug Walker: invitation
College of Charleston: honorarium
Aleta Walther: video suggestions
Patricia McQueen: photo
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Resources Online
www.ua-rtip.org (UofA RTIP)
http://business.louisville.edu/equine/
http://www.jockeyclub.com/
http://www.equibase.com/
http://www.arci.com/
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