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HorseRacing

NYRA Claims Horse Racing Thrives Despite OTB's Difficulties

2024-12-03

Over the weekend in Buffalo, New York, a significant change occurred as Catskill Off-Track Betting ceased taking wagers on its Interbets platform and at partner locations. This move has raised questions and sparked discussions within the racing and betting industry. New York Racing Association's Vice President of Communications, Patrick McKenna, shed light on the unique challenges faced by the corporation. With no physical harness racing track or brick-and-mortar OTB facilities in the served counties, it becomes difficult to expose new customers to the online platform. While other Off-Track Betting corporations in the state are not currently dealing with the same structural issues, it is largely due to revenues from video lottery terminals. According to state Gaming Commission data, the total amount distributed to counties from horse racing handle by OTBs in 2023 was a mere $3.5 million. When looking at a 15-year period, NYRA, which conducts thoroughbred races at Saratoga, Aqueduct, and Belmont, has seen its daily handle increase year over year and its annual handle remain at least flat around $2.2 billion. McKenna emphasized that when stepping back and disregarding the conventional wisdom suggesting the industry is contracting, on the thoroughbred side, the sport is actually on solid ground. Other metrics like track attendance and television ratings indicate that the sport is as popular as ever. He believes NYRA has succeeded where OTBs have struggled because it has more effectively transitioned to the new realities of online and mobile gambling. In 2020, due to COVID, the shift accelerated, and the in-person customer base that OTB systems rely on was significantly impacted. NYRA also announced that Saratoga Race Track will host the Belmont Stakes Racing Festival again this year as it continues its nearly $500 million investment in the Belmont track. For the first time, Saratoga will also host a special Independence Day racing festival from July 3 to July 6.

Unraveling the Challenges and Successes of Off-Track Betting

Challenges Faced by Catskill Off-Track Betting

The decision by Catskill Off-Track Betting to stop taking wagers on its Interbets website and at partner bars and restaurants is a clear indication of the challenges it faces. Without physical harness racing tracks or brick-and-mortar facilities in the served counties, it becomes difficult to attract new customers. This lack of exposure can have a significant impact on the growth and sustainability of the business. The state's other Off-Track Betting corporations, although not currently facing the same structural issues, are also affected by the changing landscape of the industry. The decline in revenue from horse racing handle and the increasing competition from other forms of gambling pose significant challenges for all OTBs.

According to state Gaming Commission data, the total amount distributed to counties from horse racing handle by OTBs in 2023 was a mere $3.5 million. This represents a significant decline from previous years and highlights the need for OTBs to adapt and find new ways to generate revenue. The lack of physical infrastructure also makes it difficult to build brand awareness and attract new customers. In a highly competitive market, OTBs need to find innovative ways to stand out and attract bettors.

NYRA's Success and the Shift to Online Gambling

NYRA, on the other hand, has managed to succeed where OTBs have struggled. By effectively transitioning to the new realities of online and mobile gambling, NYRA has been able to attract a wider audience and increase its handle. The corporation's ability to adapt to the changing market conditions has allowed it to remain competitive and grow its business. In 2020, due to the COVID-19 pandemic, the shift to online gambling accelerated, and NYRA was well-positioned to take advantage of this trend. The in-person customer base that OTB systems rely on was significantly impacted, but NYRA was able to maintain its business through its online platforms.

NYRA's success is also evident in its track attendance and television ratings. Despite the challenges faced by the industry, NYRA has been able to maintain a high level of attendance at its races and attract a large audience through television broadcasts. This indicates that the sport of thoroughbred racing is still popular and has a strong following. NYRA's ability to combine traditional racing with modern technology has allowed it to reach a wider audience and increase its revenue.

The Future of Off-Track Betting

The decision by Catskill Off-Track Betting and the success of NYRA raise important questions about the future of off-track betting. As the industry continues to evolve and face new challenges, it is clear that OTBs need to find new ways to adapt and remain competitive. The decline in revenue from horse racing handle and the increasing competition from other forms of gambling make it essential for OTBs to explore new markets and business models. One possible solution is to expand into online gambling and mobile betting, as NYRA has successfully done.

However, there are also challenges associated with expanding into online gambling. Regulatory issues, security concerns, and competition from other online gambling platforms are some of the factors that need to be addressed. OTBs need to work closely with regulators and industry stakeholders to ensure that they operate within the legal framework and provide a safe and secure gambling environment. They also need to invest in technology and marketing to build brand awareness and attract new customers.