Michele Fischer, Vice-President of SIS Content Services, on how new betting products can help operators to maximize their opportunity in the US.
Against a background of the ongoing impact of the pandemic, new federal regulations for safety and welfare of the sport, and potential casino decoupling bills, it is difficult to deny that horse racing in the United States has gone through a difficult period.
However, there is also room for optimism that the future of the sport can be a fruitful one for all stakeholders. It is a topic that will be at the forefront of many of my conversations at the upcoming SBC Summit North America, as we aim to serve the US market with a range of products that engage bettors both old and new.
Last year, the pari-mutuel handle in the US was the highest it has been for a dozen years, with annual turnover standing at $12.2 billion. It is not a simple task to work out exactly why that was the case – particularly given that the number of races reduced by almost 16,000 in those comparative time frames – but wagering online grew during the pandemic in parallel with the spread of legalized sports betting opportunities.
There has also been a positive trend within the performance of Historic Horse Racing (HHR), a product that looks similar to a slot machine, but uses past real-life races to create digital, pari-mutuel entertainment. HHR funnels money directly back into racing itself and in certain states this has helped in raising purse levels, resulting in a higher-quality racing product.
There is also another reason why, despite the shadow of the decoupling threatening to take away the requirement of casino owners to host horse racing, the sport may be in the early stages of a new age in the US – the spread of fixed-odds wagering and with it, the potential to attract a new generation of bettors.
Fixed-odds racing and the US horse racing industry
As things stand, fixed-odds wagering on horse racing has its detractors in the US. There are some racetracks where the prevailing mood is that it threatens to cannibalize domestic racing, but it is my view that this needs to happen provided the financial model that is put in place is geared towards directing funds back to racetracks and purses.
As we see it at SIS, fixed-odds betting in the US is an opportunity to present racing to a mass market, within a format that is familiar to sports bettors and easy to understand. Despite the headline pari-mutuel handle figures mentioned earlier, the fact is that in many states horse racing is not self-sustaining. Simply continuing to follow the established path is not an economically viable option in the long term. The addition of fixed-odds racing products has proven hugely popular in markets across the world and presents the opportunity for the sport to bring on board a whole new generation of bettors, who might otherwise have never engaged with the sport.
While many domestic tracks assess their options for now, the advantage we have at SIS is that we have over 30,000 international horse races ready to be made available for operators who embrace the fixed-odds opportunity. With over 400 customers in 50 countries, the majority of the horse racing content we supply is within fixed-odds and the volume of betting opportunities we can offer in many time zones means that US sportsbook operators can give their customers round-the-clock content.
That 24/7 opportunity is far from limited to racing. Our competitive gaming esports solution is an end-to-end system that has been carefully and specially designed for betting, with custom CS:GO content, the latest addition to our portfolio of in-house produced events. With live broadcasts of head-to-head competitions between skilled gamers on high-turnover esports titles, we are providing operators worldwide with the most profitable way to capitalize on the fastest-growing sports vertical.
Whether it is horse racing in an easy-to-understand format or round-the-clock esports betting with excellent margins, operators in the US cannot afford to be left behind in offering their customers high-quality content. It is time to engage with an audience across all platforms with a broad offering of the sort that has proven to be successful in regulated markets across the world.