IMPROVING racing for its biggest client, the punter, benefits the entire racing ecosystem, writes PATRICK CUMMINGS of the USA’s Thoroughbred Idea Foundation.

The same simply cannot be said for other stakeholder groups in the sport. Every horse owner, trainer, breeder, jockey, farm, fan, industry executive, track employee or any other related stakeholder in horse racing should understand this.

Making betting on racing as competitive and modern as possible is the most logical, sustainable funding source to keep racing going. A strong wagering environment gives horse owners the best chance at maximising their investment in horses.

The more betting turnover that is generated, the better, provided it is combined with a proper split of revenues from that betting in order to sustain operations, both for the racetrack and the horse owner. If one entity is enriched far more than another, disparities lead to weakness in the entire system – something we are collectively experiencing at present.

The ADW (Advanced Deposit Account Wagering, or online betting in South Africa) business stands out in this respect, yielding no less than tens of millions, but likely more than $100 million in profits just in 2019 alone.

Tracks need to cover expenses to operate – and there is nothing wrong with turning a profit, either. Some of the biggest track operators got into the ADW business, some got into the casino business too, and nearly all did it quite successfully. But as more betting moved online, and the legacy of betting splits evolved between tracks, purses (horsepeople) and ADWs, which serve as technological bet enablers, significant injustices in the model that has funded the operation of racing have been revealed.

There are many qualifications on what each of the main stakeholder groups in the sport need in these equations. But this much is absolute – if the industry needs betting as the most sustainable path to either covering expenses or achieving profitability through operations, then bettors are a monumental cog in the process.

Unfortunately, the bettors don’t need online betting platforms, tracks, horses, horse owners or horse breeders. They can bet their friends casually, with a bookie they know or are connected to, with an illicit online wagering platform, and of course, legally on almost any other sport in an ever-growing number of jurisdictions.

Marketing the majestic Thoroughbred to the masses will attract people to horses, some of them will probably bet once they realise that trying to decipher which horse is fastest on a given day is a fun exercise. But bettors are the only participants in the horse racing ecosystem who can walk away without notice. They don’t have horses to sell, investments and contracts to unwind, mouths to feed. They don’t have basic standards of welfare to uphold, yet they are the most direct source of income to a sport that exists because the vast majority of horse owners need to race for prize money to help recover the costs of operating.

Sure, there will be horse racing of some sort regardless of whether or not there is betting, but if the betting ecosystem of North American racing (and certain other racing jurisdictions) continue to erode, racing as you know it will be a shell of itself. The industry which has sustained bloodlines for centuries will shrink to an unrecognisable standard. The majority of the 240,000 direct jobs created by the racing sector of the American horse industry, and its $15 billion in direct economic impact, will be gone.

The negative direction the racing industry has travelled over the last 20 years has been hidden from many in the sport, but particularly from owners and breeders.

Subsidies, in the form of some shared revenue from betting sources beyond racing – be it slot machines, historical horse racing machines, video lottery terminals or others – have made purses far more lucrative than if the industry relied on racing betting as its lone source of prize money.

That has “worked” for a while. If racing relied solely on racing betting to sustain purses, in the present day, purses would be terrible, because betting on horses has declined (roughly 50 percent, adjusted for inflation, in the last 20 years), and the splits which go from online wagering through ADWs to purses is ludicrously small.

Racing’s funding model needs to be completely redeveloped.

For the best part of two years, the Thoroughbred Idea Foundation has advocated for improved outcomes as it relates to topics meant to directly help bettors – be it issues related to pricing (breakage and takeout), officiating and integrity (Category 1 rules and international stewarding standards), improved and less expensive data, and better betting options and tote modernisation to meet present-day demand.


Because, for the best part of two decades, the industry has increased pricing on bets, charged outrageous prices for the data needed to inform betting decisions, failed to modernise its betting platforms and the same can be said for the rules and integrity infrastructure.

Reduced pricing to bets (lowering the takeout by the betting operator) will increase betting.

Reducing costs and barriers to racing data will increase betting.

Modernising the technology of the pari-mutuel system and creating more options for customers will increase betting.

Upgrading the rules and integrity infrastructure will instill confidence in bettors and increase betting.

All of this will improve long-term outcomes for every stakeholder group in the sport.

Those at the top of the sport have yet to really feel the pinch. The iceberg is coming. Stop re-arranging the deck chairs. We could still take the helm, survive and miss the iceberg.

A good wagering ecosystem yields benefits for all.