1. The Good, the Bad and the Possibilities*
NCLGS Committee on Pari-Mutuels
January 6, 2017
F. Douglas Reed
Principal: Racing, Gaming & Entertainment LLC
&
Director Emeritus: University of Arizona Race Track Industry Program
*Apologies to Sergio Leone, director of “The Good, the Bad and the Ugly”

2. Overview The Good - What is working The Bad - Challenges
The Possibilities

3. The Good -What is working
International expansion/Account Wagering
Niche meets
(Keeneland 2016 Fall attendance up 15%, on-track handle up 12.5%, total daily handle up 11%)
Big Events – (Breeders’ Cup, Triple Crown)
Horse clubs/fractional ownership (WA, IL, KY, MN…)
Lower takeout experiments show promise – (KY Downs, Canterbury Park)
Intl simulcasting – Yonkers common pool in France w/ PMU, internet enables video and wagering, growing market
Niche meets: Del Mar, Keeneland, Saratoga
Big events – they are showing increases – experiences sell (this can’t be repeated 365 days/year)
Horse clubs and/or fractional ownership – Emerald, Hawthorne, Canterbury, now others following Churchill, Arlington – quasi or real ownership, gives them real owner experience, educates, some become more involved, or at least more engaged fans

4. The Good -What is working
Exchange wagering, P-2-P – (NJ, CA?)
Historical racing machines (AR, KY, WY)
Fixed Odds wagering (Australia, NZ…)
Shared/Team group bets – fractional ownership of large multi-leg bets with social aspects and prizes (Finland, Sweden & Norway)
Historical racing machines – legal in some jurisdictions not in others
In the Scandinavian countries they have had success with group or team betting – in essence fractional ownership of a pick 6 or other type of large bet. Some offer competition among teams with prizes etc.

5. The Bad- Challenges Horse/owner supply to races run ratio – shortage
Field size – starts per year per horse
Popularity vs. competition
Fragmented
Difficult to make change
Animal issues
The racino marital relationship can improve

6. The Possibilities - Ideas
North American thoroughbreds run 6.18 times a year – what if it was 7.18?
Experimental Rule
There are lots of ideas but hard to experiment with regulatory barriers
45 Ideas in 45 Minutes ( )
Innovators’ Circle 2015
Millennials
eSports events
Crossover
Pari-Mutuel wagering?
Panel Sunday on eSports

7. Closing Thoughts There is not a “silver bullet” cure-all for racing
2017 Updated Economic Impact Study - AHC
Racing like other businesses must innovate/change
It takes a lot of hard work, a lot of efforts, some will fail, some will succeed – there are good ideas out there. Help the industry innovate and experiment!
I offer some closing thoughts for horse racing in general:
There is not one “silver bullet” cure-all for racing
Racing like other businesses must innovate/change
It takes a lot of hard work, a lot of efforts, some ideas will fail, some will succeed
There is a silver lining: look at what is working and what is not and know there are many people out there with passion and ideas

8. Thank You! & Director Emeritus of the University of Arizona
Race Track Industry Program