Horse racing, once a cornerstone of American sports culture, faces significant challenges in maintaining its popularity. Despite this, new forms of betting and gaming are providing hope for the industry's revival. The decline in traditional pari-mutuel wagers has led to closures like that of Freehold Raceway after 170 years. However, emerging trends such as historical horse racing (HHR) machines and online gambling platforms are showing promise in attracting new audiences.

States traditionally associated with horse racing, like Kentucky, have found success in other areas of gambling, particularly through online sportsbooks. This shift highlights the changing landscape of the industry, where innovation may hold the key to its future sustainability.

Declining Popularity and Operational Challenges

Thoroughbred horse racing in the United States has seen a steady decline in both participation and wagering over recent years. The number of races and race days has decreased, leading to a drop in overall betting activity. December marked a particularly poor month for the sport, emphasizing the struggles faced by the industry since the pandemic. One of the most notable impacts has been the closure of America’s oldest racetrack, Freehold Raceway, which ceased operations due to dwindling attendance and revenue.

Despite being one of the most popular forms of racing within the country, thoroughbred horse racing has struggled to maintain its audience. According to Equibase and Ray Paulick of the Paulick Report, total wagers on thoroughbred races amounted to approximately $11.26 billion in the past year, representing a 3.4% decrease from the previous year. Additionally, there were 2.4% fewer race days and a 2.8% reduction in the total number of races, totaling 30,852. Howard Bruno, the general manager of Freehold Raceway, highlighted the insurmountable challenges faced by the track, ultimately leading to its closure. The decline in interest and attendance has significantly impacted the financial viability of many racetracks across the nation.

New Frontiers in Horse Racing Revenue

Amidst the challenges, the horse racing industry is exploring innovative ways to generate revenue. Historical horse racing (HHR) machines, legalized in Virginia in 2018, have become a lifeline for tracks like Colonial Downs. These slot-like terminals offer pari-mutuel wagering, attracting gamblers who might not otherwise engage with live horse racing. Everi, an iGaming company, has expanded into the HHR market, launching its TournEvent platform at Gate City Casino in New Hampshire, which now boasts over 500 HHR machines.

While HHR machines have brought in substantial revenue, they have not yet converted casino players into horse race bettors. However, states like Kentucky have found success in alternative forms of gambling. The Kentucky Horse Racing and Gaming Corporation reported that adjusted gross revenue exceeded $272 million in its first year, with $2.3 billion wagered at online sportsbooks. DraftKings and Fanatics emerged as the top platforms, generating significant revenue for the state. The different betting systems used in sports betting, compared to pari-mutuel horse racing, highlight the potential for diversification within the industry. As horse racing continues to evolve, embracing these new opportunities could be crucial for its long-term survival.