Horse Racing Revenue July 2020: Will Strong Numbers Last?

horse racing betting handle 2020

With many sports on hiatus during the coronavirus pandemic, bettors have returned to a recreation of old, horse racing—the so-called Sport of Kings. Horse racing was a casualty of the COVID-19 shutdowns, but racing was able to return to action much quicker than most other sports, evidenced by the July numbers.

According to Bloodhorse.com, wagering on US races rose 19% year-over-year in July, and viewership on FOX networks is up an astounding 300% for the year

As Bloodhorse.com notes, “… the sport has gained far more television exposure with professional and collegiate sports shuttered than it would have in a traditional and less turbulent year.”

Horse Racing Bounced Back Faster

What’s interesting about these numbers is racing hasn’t escaped COVID-19 unscathed. Like other sports, the horse racing industry shuttered, as jurisdictions dealt with coronavirus outbreaks, evidenced by some of the other Bloodhorse.com numbers. In 2020, race days and total races are down 35% and 33%, respectively.

The difference is, like NASCAR betting, horse racing found a way to return – helped by the mechanics of a racetrack and the widespread availability of online ADW horse racing. And with few other sports on the menu, racing has seen a substantial uptick since its large-scale return, despite many venues limiting or prohibiting fans.

Not surprisingly, the average wagering per race day is much higher in 2020 than in 2019:

  • 2020 – $3,622,405
  • 2019 – $2,556,035

Renewed Interest in Horse Racing or Just a Blip?

Horse racing’s demise has been overstated for decades. Yes, the industry is waning, but a look at the year-to-date handle and purse numbers 2019 and 2020 from Bloodhorse.com, indicates the sector is still strong.

Wagers on US races (includes worldwide):

  • YTD 2019 – $6,615,017,905
  • YTD 2020 – $6,154,466,247

US Purses:

  • YTD 2019 – $647,344,706
  • YTD 2020 – $414,380,742

The decline in purse size during 2020 indicates that on-site betting is way down, and most of the money wagered is coming from online channels. The takeout rate for on-site betting is 18%. For online (ADW) wagers, it’s just 4%.

Essentially, these numbers point to horse racing being a billion-dollar industry that handles 10-figures worth of bets annually.

Can Horse Racing Overcome its Main Hurdle?

Horse racing’s prolonged decline is tied to the rise of lotteries, casino gambling, and, more recently, online gambling and sports betting. Not only are these alternative gambling channels competition for customers’ dollars, but unlike horse racing, most of the games offered are far simpler to understand.

It’s not that horse racing is less entertaining or suspenseful (I’d argue it’s among the most suspenseful forms of gambling), it’s that horse racing is a bit overwhelming to a prospective bettor. Horse racing suffers from its complexity.

Whether it’s the pari-mutuel system (with its changing odds), the density of the racing sheet, or the quinella, trifecta, and exacta verbiage, horse racing is not a form of betting that is beginner-friendly. Nor does the existence of “seasoned” bettors create a welcoming environment. To a first-timer, a visit to a horse track is a lot like a poker room. It appears everyone knows what they’re doing except for you.

That said, it will be interesting to see if the uptick is new bettors. Bettors that have overcome their apprehension and now understand the mechanics of horse racing, and might continue to “bet the ponies” going forward. On the other hand, if the uptick is just higher spend from existing bettors or reactivation of former bettors, the numbers will revert to pre-pandemic levels much faster.

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