Attendance at horse racetracks has dropped dramatically over the years, for several reasons.  First, the quickened pace and increased demands of modern society are not compatible with spending a leisurely day at the races.  Second, people of today do not have the same appreciation for horses that their agrarian ancestors did.  Third, the gambling side of horse racing has been eviscerated by proliferating casinos in the United States and offshore.  Fourth, advance deposit wagering in many states has allowed people to bet legally without setting foot on a racetrack.

Falling racetrack attendance is part of a larger and likely irreversible societal phenomenon in which brick-and-mortar retailers are having a difficult time competing with online retailers.  According to Green Street Advisors (as reported in the New York Times), in the past four years about two dozen malls have gone out of business in the United States and 60 more are on the verge of closing.

As mall anchors like Sears, J. C. Penny, and Macy’s continue to close stores, malls suffer the consequences.  Gap just announced that it will close one-fourth of its 675 stores in North America, J. Crew laid off 10% of its headquarters personnel, and Abercrombie & Fitch and Aerospostale are paring the number of stores in their chains.

A few showcase horse-racing events do attract large crowds.  The New York Racing Association capped attendance for the 2015 Belmont Stakes at 90,000 and tickets for the Kentucky Derby and Preakness are always in high demand.  Barring unusually bad weather, the 2015 Breeders’ Cup at Keeneland will be packed with fans.

Peter Guber has a provocative idea about enabling more people to attend sporting events through virtual reality, which would, of course, expand the revenue base for the events.  The 73-year-old Guber has serious credentials in both sports and entertainment.  He is the former Chairman of Sony Entertainment, current CEO of Mandalay Entertainment, part owner of the NBA’s Golden State Warriors and Major League Baseball’s Los Angeles Dodgers, and chairman of Dick Clark Productions, the premier global producer of live event programming.

Guber has a significant investment in NextVR, a company that he says is capable of providing virtual reality technology that is “a game changer for live sports, festivals, concerts, shopping, and travel.”  For sports, a virtual viewer would have a real sense of being at an event like the Kentucky Derby that it is not possible to experience by watching on conventional television.  The business behind the virtual reality could offer the customer either a pay-per-view subscription or “clips” that supplement a conventional telecast.

As with any incipient technology, there are barriers to commercialization that have to be addressed.  For instance, Guber said that an unanswered question is whether people would be comfortable watching entire games in a virtual reality headset.  Moreover, until sufficient economies of scale are reached, the technology would be prohibitively expensive.

The concept of enabling an avid horse racing fan to (virtually) attend the June meet at Royal Ascot or the Kentucky Derby seems to have great potential.  Millennials and ensuing generations raised with iPhones and social media should feel comfortable with the technology, especially as it is refined and costs come down.

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