The concept of daily fantasy horse racing was discussed at the University of Arizona Race Track Industry Program’s Global Symposium on Racing and Gaming this week. Despite the conference having an insanely long name, the intrigue over whether or not this particular sport should work with the booming daily fantasy businesses was discussed at large.
The end results seemed to be positive.
It’s obvious why this particular industry would elect to consider daily fantasy horse racing as an option. Economic forecasts for daily fantasy suggest that they would generate close to $2.2 billion for 2015 entry fees. There are also lofty expectations for the industry to grow to a market of over $14 billion by the year 2020 (credit: Forbes). Even if those numbers slow over the next few years, we’re talking about a multi-billion dollar market that horse racing can use to grow its business exponentially.
Daily fantasy has circumvented many laws by hiding behind the “fantasy” angle, as opposed to the gaming umbrella. They are being hotly contested in states like New York, but are still operating at full until an exact legislation can be decided. If you could get a piece of a billion-dollar industry, you would at least try to.
To put this in perspective, handles at the four major events of the year (Breeders’ Cup and Triple Crown events) hovers in the $600 million range. The Kentucky Derby typically handles the most mainstream attention, and enjoys the greatest action of any of the four events, with over $194.3 million in action in 2015. The Breeders’ Cup handle this year was just over $150.4 million. The Preakness and Belmont usually rely on the presence of a Triple Crown candidate for increases in their expected handles.
By comparison, only $116 million was bet on Super Bowl 49.
The support of daily fantasy horse racing was obvious at the symposium. John Ford, who has developed BAM Software and Services, echoed the sentiment shared by the room. “I believe horse racing has a strong future and fantasy can be a part of that.” Unlike the NFL, NBA and MLB, horse racing is a sport which has not only embraced wagering of all sorts, it’s endorsed it. Other leagues tend to treat gaming as a side act by mentioning odds in passing during commentary. For horse racing, it is part of the narrative.
The director of the Oregon Racing Commission, Jack McGrail, voiced a definitive opinion that the tracks should redeem some of the profit generated from daily fantasy horse racing. It’s a similar model to what happens with casinos at the tracks and would go a long way in providing all venues with a potentially profitable revenue stream.
While the biggest four events of the year – the Kentucky Derby, Belmont Stakes, Preakness Stakes and Breeders’ Cup – all enjoy heavy handles on race day, the interest in the lesser known races throughout the United States are faltering. Raymond Lesniak, the New Jersey senator who advocated for legal sports gambling in his home state, joined the panel to echo this sentiment. The opportunity to cross-reference sports bettors in to horse betting on a larger scale was a major part of Lesniak’s argument, and it’s probably the most important angle there is when it comes to daily fantasy horse racing.
The fact is that only the hard corse race fans know about events like the Santa Anita Derby, Florida Derby and Louisiana Derby. Online sportsbooks will often advertise and post odds for some of the mid-major races, but they do not receive the type of action that the tracks would prefer. Broadcasting these events through another channel may be the window of opportunity this sport needs to widen its revenue streams.
Regulation remains the largest hurdle, but the support that daily fantasy horse racing received at the Global Symposium could very well mean that it is well on its way to becoming an actual entity in the gaming world. Like online poker before it, and online sportsbooks to a lesser degree, the time is now to strike as the government scrambles to figure out how to legislate this new commodity. The gaming community has always been one to act first and ask for apologies later.
Horse racing has routinely attempted to use its traditional channels to widen the scope for its major events, but there are various problems with simulcasts, time zones and other regulations that inhibit the progress of the sport’s ability to spread overseas. Daily fantasy horse racing would allow bettors to scan the world for bets, expanding both the U.S. and European markets, while also giving the crucial Hong Kong market online access to races across the globe.
It’s up to the leaders in horse race betting to either work with the leaders in daily fantasy now, or get left in the dust. DraftKings and FanDuel remain the biggest names in the game and would be the logical go-to’s for the bridge.
There’s no reason that daily fantasy horse racing shouldn’t exist, and it could very well be the engine that drives this sport in to the next echelon of the gaming industry.