A RETAIL STRATEGY FOR BLOODSTOCK INTERESTS

Racetracks and advance deposit wagering outlets in the United States are increasingly owned by a very limited number of casino companies in which pari-mutuel wagering accounts for a shrinking percentage of corporate revenues and earnings. This structural transformation has further weakened the position of the small-business-oriented bloodstock side of racing vis-à-vis the retailers of pari-mutuel wagering, several of which are relatively large publicly traded companies.

Thus farms, stables, and ancillary suppliers are indirectly evermore dependent on the actions of gaming companies, wherein horse racing is a secondary offering in the product portfolio. In the transition, bloodstock enterprises are losing control of their own destiny.

A bold and proactive strategy for the bloodstock sector would be to launch or acquire an ADW firm so as to vertically integrate downstream to retail. This would create a “pure play” entity whose sole mission is to enhance the economic underpinnings of horse racing, while seeking a profit for shareholders. The ADW would also serve as an R & D laboratory for experimentation in pari-mutuel wagering and customer recruitment and retention.

Shareholders in the privately-held company would be required to comply with carefully delineated criteria, such as being accredited individual investors who currently own racehorses or derive their livelihood from the sport. Stock in the enterprise could be bought and sold as long as buyers met the standards and no single shareholder accumulated over a predetermined percentage of the company.

The concept would need to be thoroughly fleshed out and tested for feasibility and capital requirements in a comprehensive business plan based on in-depth research. Subsequently, the interest level of potential angel investors would have to be discerned.

An ADW owned and operated exclusively by individuals with a compelling vested interest in horse racing should be single-minded and aggressive in pursuing its raison d’être.

Copyright © 2013 The Blood-Horse. Used with permission.

Comments

  1. Makes more sense than anything I’ve seen in years out of Lexington, the Jockey Club etc. A pragmatic idea for horse people to gain some control in a splintered and divisive industry. Kudos.

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