May 14, 2013

Racing handle vs Casino Revenue Trends

This may or may not be of interest to many readers, but this is an important discussion in the long term health of the sport of horse racing. From a bettor's perspective, racetracks can survive only if there are some organic sources of revenue - and by that we mean, wagering handle coming into racetracks at a regular clip.

Update: Please note, I got a comment that in this dataset, the casino revenues are net house winnings, while the racetrack handles are prior to takeout. So US racetrack revenues maybe much lesser. I have to figure out how to incorporate to an average takeout. So assuming that the WPS pool takeout is the average takeout ~ 16-18%, horsetrack revenues should dip a lot more? Of course, they also get money from Slots. So it gets complicated.

A review of casino revenue change over last ten years and comparison of US racetrack handles is presented below.

The data source is available here for viewing/download.

The gist of the data trend can be seen in this one plot:
Gambling vs Racetrack Revenue - 10 yr trend
What we see is that casino revenues have been going up at a very healthy rate since 2003, and while they fell a little during the economic downturn of 2008, they have climbed back up again. Horse racing handle, however, has just begun to claw its way back up, in 2012.

Also, notable of course, is that off track betting easily eclipses on track betting by over ten times volume.

Note that actual revenues of casinos are in the 35-37 Billion range and total horseracing wagering revenues are in the 12-14 Billion range. Both are recorded in US Dollars.

What do you think about these trends? Do you think horse racing will eventually cross over above it highs in 2004 in the coming years?

Also see Ongoing discussions at paceadvantage

Data sources Accessed on May 14 2013:
Americangaming.org http://bit.ly/amrgaming
Jockey Club: http://www.jockeyclub.com/factbook.asp?section=8

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