Although most racetracks are scrambling to find ways to add racinos — slot machines and table games — to their facilities, one prominent horseman says racinos aren’t the industry’s "savior."
Andrew Weil, chairman and CEO of Scientific Games, speaking at the opening keynote at last week’s Symposium on Racing and Gaming in Tuscon, suggested the pari-mutuel industry would be better served by exploiting the growth of sports betting, broadening its distribution and developing new content.
"We’re in a rut, like being in a steady job that doesn’t pay much while we wait for a Messiah that may never come," Weil said. "Technology is an enabler of growth but by no means a driver of growth, and a driver of growth is what this industry is in need of."
Weil said horse racing needs "new content" in order to grow. He used the lottery system as an example, citing the lottery’s "sensational business model" that reaps high profits through new content and widespread distribution.
"If you don’t change the product and content, you can’t grow," Weil said.
Weil also cited the controversial betting exchange Betfair as a good example of what new content can do for growth without actually endorsing the so-called sports betting exchanges that operate something like stock exchanges.
"Betfair combines the excitement of racing with sophisticated elements of a business exchange," Weil said. "Betting exchange players are not dumb. They’re coming in droves to bet this way. Look at the impact of what new and improved content can do to turn around the fortunes of the industry."
Weil also said the pari-mutuel industry should also explore sports betting. In Nevada, sports betting is about four times larger than horse race betting, he said. And that unprecedented growth in a venue such as the Hong Kong Jockey Club has been attributed to sports betting added to its offerings.
"Sports betting is something we need to think really seriously about," Weil said.
The pari-mutuel also needs to become better at distributing its product and pointed toward European operations as examples of better distribution.
For instance, in the U.S. there are two points of distribution per million people, whereas in France, where betting is offered in restaurants and bars, there are 141 points of distribution per million people.
Overall, Weil said new content is crucial.
"If there is no new content, we can scream ”˜Go, baby, go’ until our faces turn blue, but by the time we’re done, there will be no one there to scream it to, because without new content there won’t be any new customers.