The horseracing industry is in the middle of a “crisis”. Although interest in the sport has risen 25% since 2019, this is significantly lower in comparison to the online sports betting market it has strong links with – and which has doubled in the same period.
At the SBC Summit in Lisbon, five betting industry experts sat down to discuss how horseracing must embrace innovation to build a ‘prosperous future’ after a difficult few years of declining attendances and the financial impact of COVID-19.
An attractive sport to high stakers
The panel initially came to Ylva Svensson, Head of International Sales at AB Trav och Galopp (ATG), who shared her experiences of the Swedish market, detailing the importance of ‘social betting’ in the country.
“If you look at the big V75, which is the engine of our products, every Saturday we have more than €10m in the pool, and more than 58% is now shared tickets as well as the ‘together’ option where you can create teams together online, and bet together.”
“This has really made this product more vibrant than ever,” Svensson asserted. However, she suggested that it is now crucial for the brand to look into fixed odds, or the more simple bet types.
Moving forward, in looking at how to make horseracing more attractive in global markets, William Woodhams, CEO of Fitzdares, noted that in the UK, 80% of money generated by bookmakers that goes into racing is generated by 4-5% of the customer base.
“It is a very attractive sport to high staking clients,” he explained. “Legislation and compliance unfortunately target these customers who, often very wealthy people, own horses and have horses in training. The sport does attract that type of person, and that person loves to bet race-to-race.
“Therefore I think it’s very important that we don’t, either in a compliance sense or a legislation sense, penalise those people that want to stake a lot of money.”
For this customer-base, apart from perhaps the exception of Hong Kong, Woodhams described fixed odds as ‘the only show in town’.
Opening up the racing “club”
Using the comparison to football going from ‘pies and beer’ to ‘glam, sexy and cool’ globally, Woodhams suggested we are beginning to see this shift in racing, starting in Japan.
“We have started to see the building of cool, engaging luxurious brand messaging around racing, stars, star horses, fantastic attendance, and understanding how gambling works.
“Racing can be so prohibited and complicated to consumers, sometimes it feels like a club. What we need to do is open it up to people, but really dial up the elements of racing that are cool and chic – such as Breeder’s Cup, Melbourne Cup and Royal Ascot.
“To appeal to a large audience but be an amazing experience in the flesh, if you go to Happy Valley on a Wednesday in Hong Kong you can go to McDonald’s or you can go to a Michelin star restaurant.
“But it is rammed, but it is cool and everyone has a brilliant time, I think we need to dial up all of those elements to make the sport special. But as you say fundamentally, it’s us bookmakers that fund the sport.”
Woodhams added that the industry must recognise this and therefore the product needs to be improved constantly.
Agreeing with the points made was Jon Knapman, Chief Commercial Officer of the UK Tote Group, the UK’s horse racing pool betting operator, who observed that in the UK ‘the pool over many many years has become subscale for those types of punters’.
He detailed that the company works hard on international commingling – countries from all over the world betting into the same pool.
Generally, in most countries pools are relatively fragmented, the CCO explained, noting: “There will be a pool in France or a pool in Australia for UK racing, and vice versa.”
He emphasised that all that does is ‘fragment that liquidity’, resulting in smaller markets that become relatively subscale. “The fixed odds will say you can’t get a good bet on in the pool, you need price certainty,” he said.
Knapman then went on to praise the rise of the Whirlpool concept, which he explained gives someone the ability to place a large bet without really moving the price around.
“If pool betting wants to succeed longer term, it will be in terminal decline unless it can figure out how to grow liquidity, which will in turn grow liquidity. Then you offer a viable alternative to fixed odds.”
Talking tech and learning from others
The panel’s moderator, Mauro De Fabritiis, Founder of MDF Partners, shifted the conversation to technology. He asked how data can be used to improve the player experience and increase engagement in horse racing betting.
Alan Pepperell, Retail Director, B2B at Spotlight Sports Group, answered: “If you roll the clock back just a decade, most content was through printed means. In retail alone now, we supply content through self service betting terminals, TV, digital marketing, digital newspapers as well as our printed products.
“Three years ago we asked ourselves how do we build a racecard to attract a new younger audience to the sport.”
Pepperell highlighted that the feedback was that the traditional racecard was loved and understood by the experienced customer, but was complicated and potentially a barrier for a new entrant.
“From research and using some of the ideas from FIFA and Football Manager, Smart View was born.”
The race card, introduced in December last year, aimed to transform the traditional approach to racing bettors’ experience with race cards, making it more appealing to new and existing audiences.
Josh Sparke, Director of Procurement and Business Development at LiveScore Group, went on to explain how real-time engagement enhances the betting experiences to these audiences, especially the new and younger.
“I think racing could really benefit from what other sports have done in this area,” he said. “If you look at F1, football and the NFL – they have really embraced this digital transformation that they’ve been through.”
He uses the example of the F1 series “All or Nothing” and “Drive to Survive”, describing it as a personalised story.
“I didn’t follow F1 whatsoever but now I have a favourite team and follow them all on social media as well.”
The Director suggested that racing has dabbled in this too: “They’ve had horsepower, they’ve just had the recent series as well – I think there is an amazing opportunity there.
“Racing could become the multimedia storytellers of the future.”