Things happen for a reason. The earth-shaking deal between Churchill Downs and Magna, two giant racetrack operators, to work together can be a spark to set other wheels in motion.
Horse racing's handle has been flat this decade, idling at $15 billion. Meanwhile, other gaming venues have seen their numbers grow through the roof.
Advertisement
A huge fault exists within the fragmented nature of the horse racing industry, which seldom plans or acts with all parties on the same page. The truce of Churchill and Magna creates a giant opportunity to move forward.
Among many thoughts, here are three I'd like to see happen because of the new relationship:
• Merge HRTV and TVG into HRTVG and HRTVG2. The two networks could do more for racing if working in unison, plus save millions in expenses. A business model is in place at ESPN and ESPN2.
• Give bettors and horsemen some relief. The backbone of horse racing lies with those who bet and those who put the horses on the racetrack. Under the current formula, both parties are losing big.
• I would love to see a 1 percent reduction in the national blended takeout rate, thus returning more money to bettors. Also, the host tracks should increase their average simulcast fee from 3 percent to 4 percent. That money could go to improving purses.
The offended party would be the simulcast bet takers who, in essence, will be giving back 1 percent each to horseplayers and horsemen. I consider it a pricey short-term bill to ensure a long-term investment. It's about retention and recruitment.
Simulcast sites have been riding a gravy train for 25 years. Their hold has been a profitable 15 percent or more from each dollar wagered. This margin is real and lucrative.
Finally, let's get serious about recruiting new fans. A new generation is needed for the parimutuel handle to grow from $15 billion and to increase horse ownership.
Churchill and Magna, together, now have the juice to start making things happen.
Richard Eng's horse racing column is published Friday. He can be reached at rich_eng@hotmail.com.
