Following is a brief objective assessment of how the horse-racing pari-mutuel industry has fared in the United States over the past decade, stands currently, and looks for the future.
The dollar figures used are adjusted for inflation and are stated in 2007 dollars. For example, in 2016, the nominal or reported pari-mutuel handle was $10.735 billion but the real handle, when adjusted to 2007 dollars, was $9.222 billion.
U. S. Handle 2007-2016 No. of Races Run Per-Race Handle
(in billions of 2007 dollars)
2016 9.222 38,284 240,884
2015 9.338 38,941 239,799
2014 9.241 41,276 223,883
2013 9.681 43,139 224,414
2012 9.827 45,086 217,961
2011 9.927 45,417 218,575
2010 10.858 46,379 234,115
2009 11.902 49,368 241,087
2008 13.157 50,170 262,248
2007 14.725 51,304 287,015
2007-2016 results in pari-mutuel handle = -37.4% in inflation-adjusted dollars
2007-2016 results in number of races run = -25.4%
2007-2016 results in revenue per race = -16.1% in inflation-adjusted dollars
- The U. S. pari-mutuel industry continued its long-term secular downward trend over the past decade. Like most other enterprises, horse racing was hard hit by the worldwide financial meltdown of 2008; it never recovered to pre-crisis levels. A major concern is that the percentage decline in pari-mutuel handle greatly exceeded the percentage decline in number of races run.
- In the past three years, the industry appears to have almost stabilized in terms of both pari-mutuel handle and number of races run, but it is too soon to tell for sure. The question going forward is whether pari-mutuel handle will remain stagnant or grow faster than the rate of inflation in the economy. To a large extent, the answer to this question depends on how aggressively–and how skillfully–racetracks and online betting outlets market horse racing. With casino-oriented organizations in charge of most major racetracks, this may be a detriment to growth. Casino companies are expert marketers, especially in terms of customer-rewards programs, but it is doubtful that most of them will aggressively promote horse racing, with the exception of the Triple Crown races and to a lesser extent the Breeders’ Cup.
- A potential regulatory development that should boost handle is the modernization of IRS rules on tax withholding and reporting. At this writing, modernization looks to be feasible.
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