From 2009 to 2019, Illinois’ horse racing industry has fallen on hard times. Annual betting handle dropped by 32% over most of the 2010s.
A cursory glance at the numbers explains why. Wagers on and off the track dropped by more than half. The explosion of advance deposit wagers didn’t offer enough convenience to offset declining wagers. Here’s how Illinois’ horse racing revenue breaks down:
Illinois Horse Racing Handle–In Millions
|Track & Off-The-Track Bets||Advance Deposit Wagers||Total Wagers|
|Percent Change From 2009-2019||-53%||980%||-24%|
Illinois has lost horsemen to other states with larger prize pools. As the best horses left, horse racing became less interesting for bettors. So, they wagered less and less. As Illinois’ horse racing handle dwindled, so did tax revenue from horse racing, prizes for horsemen, and resources for breeding competitive horses.
It’s a ripple effect that chips money away from the state’s coffers.
But big developments at Hawthorne Race Course could reverse that trend. Hawthorne Race Course secured rights to build a casino on-site and secured a partnership with PointsBet. Both moves are expected to help them buck the downward trend of Illinois horse racing betting handle. We reached out to Assistant General Manager at Hawthorne Race Course, John Walsh, for insight into Illinois’ horse racing industry and its new relationship with sports betting. He responded with written answers that covered:
- Horse racing’s history in the United States.
- The business relationship between horse tracks and sportsbooks.
- Predictions about the future of Illinois’ horse tracks.
Why Horse Racing Was More Acceptable Than Sports Betting
Bettors may wonder how sports betting was different from horse racing. They were both wagers on sporting events. How did horse betting become so respected and sports betting so taboo?
“Horse racing is America’s original sport, so has developed as a part of our culture over a much longer period,” says John Walsh. “Obviously horses were once integral to daily life and racing and then wagering grew out of that naturally. Harness racing began as a friendly competition between families heading from the farm to church on Sunday mornings. But in Europe and Australia–as well as many Asian countries–sports betting today is just as acceptable as racing. That will happen in the US too, and quickly.”
That accounts for the gap between horse racing and sports betting. Horse racing in the United States goes all the way back to colonial times when it was a gentleman’s game. After Nevada changed its mind on prohibition, horse tracks were one of the first forms of gambling to return to the United States. That stands in stark contrast to sports betting’s long slog onto state law books.
Horse Racing’s Place In Illinois
Despite centuries as a staple of the United States’ sports landscape, horse racing continues to innovate today.
“Up until the late 70s–maybe even early 80s–horseracing was the number one spectator sport in the nation,” says Walsh. “This is really before the NFL became such a big, multimedia business. Racing was also the most common form of legal wagering before many states created Lotteries. But racing has continued to adapt, creating wagering opportunities at off-track locations and then [offering] simulcast wagering on tracks in other states and countries. We had mobile wagering before sports betting platforms did as well.”
“There are a lot of positive trends in racing still. The Kentucky Derby continues to break attendance and [betting] handle records. The Breeders Cup has become a mainstream sporting event. Younger fans are finding new ways to get into the sport and have a preference for experiential entertainment.”
Horse racing also shares similar appeals as sportsbooks. Particularly, satisfying an urge to bet on whatever’s available, catering to bettors who take odds and rankings at face value.
“A typical race card has 10 races every 20-25 minutes,” says Walsh. “So, this is appealing to an audience that is used to on-demand excitement. We’re very excited about how our casino will be able to introduce new fans to ‘Chicago’s hometown track.’ Having multiple kinds of wagering entertainment under one roof just makes sense–it’s what customers want and expect.”
Sportsbooks And Horse Tracks Together
But now that sports betting is expanding across the country, some bills are directing some of the tax dollars to horse tracks. John Walsh expands on the relationship between horse tracks and sportsbooks.
“All politics are local as the saying goes,” says Walsh. “But in general, racing isn’t just a sports enterprise. It’s an agribusiness. Racing at Hawthorne in Chicago supports farms throughout the State and as many as 45,000 jobs. Illinois doesn’t allocate tax dollars to compensate tracks, but money from casinos at race tracks is required to support purses for racing–which is the best way to keep the businesses of Illinois horsemen in Illinois–which is good for the economy.”
Sportsbooks–and slot machines before them–play an important role in the horse racing industry. Money from ancillary services like these funds the horse track’s purse. (The purse is the pool of money split among top winners.) As other states added slot machines and sportsbooks to their horse tracks, the tracks’ purses grew. With more money to win, horsemen raced their horses in these competitive states. It was great for them because they got more money with no increase in cost.
But wagers at Illinois race tracks have dropped precipitously, which led sportsbooks to lobby hard to be a part of Illinois’ casino expansion legislation. “The creation of a casino and sportsbook at a race track creates far more jobs and economic benefits for the state than a new standalone casino,” says Walsh.
Hawthorne Race Course’s Sportsbook Partnership
The potential synergies of a sportsbook partnership have not been lost on Hawthorne’s Assistant GM.
“We think sports betting will complement racing and increase the business,” says Walsh. “Racing is the original sports betting. It has the same kind of appeal for handicappers: analyzing odds and statistics to make an educated wager on the outcome of a contest between athletes. We chose PointsBet as our sports betting partner because they have experience and appreciation for racing as well. There will be a lot of cross-promotion between the businesses to new and existing fans.”
PointsBet’s Australia site offers horse, harness, and greyhound racing. Their experience makes them a natural partner for an Illinois race track. Bettors visiting Hawthorne Race Course can expect to see PointsBet advertised.
And Illinois PointsBet bettors may find prominent Hawthorne Race Course ads, too.
How Adding A Sportsbook And Casino Will Change Hawthorne
Hawthorne Race Course is positioned to become Illinois’ premier gaming destination. The casino will be a major revenue boost. But the more recent addition of sports betting will give Hawthorne an extra competitive edge.
“The excitement around sports betting right now is that it is finally legal and easily accessible,” says Walsh. “As with other industries, over time the leaders will be those that are the most innovative and attentive to customer needs.”
“Hawthorne has a very dedicated fan base because service has been a pillar of our business for a long time. But we also think of ourselves as a 130-year old start-up business and PointsBet is already a proven innovator in the market. They own all of their own technology and have always focused on the gambler. They still offer products that no one else has yet. And of course, we’ll be the only casino that also has horseracing.”
The Massive Boost From Casino Revenue
Although the casino and sportsbook are both major deals, the casino alone will be critical to making Hawthorne a competitive horse track. Not just competitive in Illinois, either. Competitive compared to other states, too.
“The casino at Hawthorne will enable us to increase our purses by about 300%,” says Walsh. “Bigger purses will attract more horses. More horses in each race mean more betting competition, so [betting] handle will go up too. We’re going to make racing an integral part of the casino experience with state-of-the-art amenities for players and horsemen. For us, this is all about customer service and showcasing the sports legacy of Illinois racing.”
Bigger purses mean bigger prizes, which will bring the horsemen who left Illinois’ race tracks back. Anyone interested in Illinois horse racing’s future will have to watch Hawthorne Race Course. It’ll be the canary in the coal mine that shows us whether Illinois can bring its horsemen back from Indiana, Louisiana, and Ohio.
The Future Of Illinois Horse Racing
As the gaming industry continues to evolve, older subsections of the gaming industry will have to adapt. Currently, the most competitive horse tracks are the ones that offer larger purses than other states. Other states can offer more prize money by using slots, sportsbooks, and casino games to fund the horse track’s prize pool. Tactics like this have drawn horsemen away from Illinois.
But Hawthorne Race Course’s innovations could become recovery models for other states whose horse racing industries have fallen behind. By integrating lucrative gambling options, old businesses can transform themselves to compete in the modern gaming industry. Hawthorne’s success remains to be seen. But if it successfully carves a path forward, it could do more than turn Illinois’ horse racing industry around. It could become the definitive case study in innovating for a new age.