Opinion SPORTS BETTING
This article was first published in Asia Gambling Brief
sport better and form an emotional attachment.
About 65 percent of financial returns to horse racing come from wagering, a further 20 percent comes from owners in the form of nomination fees and other charges, and 15 percent from race day takings such as entry fees and hospitality, according to Asian Racing Conference statistics.
An almost negligible amount is gained for racing from broadcasting fees and sponsorship. Compare this to America's National Football League, which does not endorse betting or gain any financial return from gaming operators and earns more than 44 percent of its revenue through a multi billion dollar television rights deal.
Those within racing say that the trouble is not racing's funding model, but rather high tax rates imposed by governments and the sports' aging demographic, but most admit that its marketing could be adapted.
The Hong Kong Jockey Club acknowledged that racing's image needed a boost and has taken measures to sell racing to a younger generation of customers. A 2009 10 Jockey Club customer survey showed that 75 percent of its customers were more than 50 years old.
Speaking at the Asian Racing Conference, the Jockey Club's executive director of customer and marketing, Richard Cheung, said there was a “perception challenge”, with younger generations that "racing equals betting", and that "racing is complicated".
The Jockey Club's “customer segmentation” has targeted an upmarket and international crowd with initiatives such as the “Happy Wednesday” promotions at Happy Valley Racecourse and the Adrenaline nightclub style venue at the same track. “We want them to look at racing as entertainment,” Cheung said.
"Horse racing needs to adapt its business model if it wants to survive another twenty years,” Trost says. “Relying on betting revenue is a long term mistake because it distracts the industry from creating an entertainment product that is compelling on its own. People should want to watch horse racing just like football, without the betting element to spruce it up. Horse racing should look to other sports such as F1 (Formula One) for inspiration."
Some of Trost's suggestions for how to make racing more appealing include creating “leagues,” or seasons, with a defined beginning and end, plus better branding of trainers, jockeys and horses moves aimed at helping a novice understand the
The Jockey Club also sought to stem the leakage of turnover to illegal markets, and target hardcore customers by implementing a 10 percent rebate on certain losing bets larger than HK$10,000 ($1,290). Introducing the rebates corresponded with a rise in turnover in 2006 07, one that has continued steadily skyward since a brief blip during the global financial crisis.
Gaining a financial return from online operators such as Smarkets has also been difficult for racing, with online wagering operators not required by law to make any financial return to the sport.
“It's about gaining recognition of the fact that racing's business model is built upon a reasonable rate of return from wagering to the sport,” explained Andrew Harding, secretary general of the
Asian Racing Federation earlier this year. “If that is broken and you are left with what we call the “Free rider phenomenon” that is, wagering operators using racing without contributing to its costs."
"When this happens it is a case of market failure and if there is nothing done to address that then you end up with under supply in economic terms and the industry cannot be viable in the long term. The sport will be limited in its growth or go into decline,” he said.
Australian racing expert Ralph Horowitz is an independent form analyst and co hosts Radio Sports National's major racing broadcasts, but also has experience as a producer of top rated television programs in his country.
“Relying on betting revenue is a long -term mistake because it distracts the industry from creating an entertainment product that is compelling on
its own. People should want to watch horse racing just like football.”
He disagrees that racing needs to abandon its funding model, but should embrace it and ensure the on track product caters to its core audience.
“Racing needs to accept a starting point, and that is that sports reluctantly tolerates people betting on their product, where racing doesn't exist if people don't bet on their product," he said. "Simply start by acknowledging racing is a wagering activity that happens to be an elite level sport rather than vice versa.”
“There's a natural edge in sports betting as the loyal fans of say Manchester United, India or Tiger Woods will always back their side, country or favourite player regardless of form, taking on those who are more clinical with their assessments which is what most racing "fans" are.”
Still, Horowitz says racing administrators in his country have catered to the powerful breeding industry with the types of races that don't interest gamblers, and scheduled race meetings at unfamiliar times to regular customers. “We have administrators who don't bet nor understand the appeal of the sport for those who take it seriously,” he says. “Fortunately for Hong Kong racing it doesn't have the breeding influence that Australian racing does and it clearly understands that its core customers are punters, whereas in Australia there's a patronizing approach to those who bet.”
4 7
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84