It is unlikely that Peter Carlino, who is the chairman of Penn National Gaming, has ever spent a summer day at Saratoga, been at Churchill Downs on the day of the Kentucky Derby, driven to the Jersey Shore in July for a day at Monmouth Park or had a fish taco at Del Mar. It is doubtful that he has ever spent an afternoon in the spring or autumn at Keeneland. Has he ever seen a Santa Anita Derby or the Big ‘Cap? The crowds assembled at any of these racetracks span the spectrum of age and demographic position and all are slot-machine free.
Carlino, it appears, believes that racing survives only on life support supplied by revenue from slot machines.
“There aren’t sufficient numbers of racing customers anymore because they died,” Carlino said last week during a conference call with investors and analysts during which he suggested that the company’s racetracks were little more than a drag on revenue generated by slot machines.
This is, of course, preposterous.
It appears that Penn National, despite what is suggested by the company’s name, operates racetracks only as a necessary evil, since most are or will be attached to casinos. Slots and in some cases full-service casinos have in a perhaps inevitable twist of finance become more important than the sport they were initially intended to buttress. Its Yahoo Finance profile mentions only in passing an involvement in racing: “Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. As of February 24, 2010, it operated approximately 26,300 gaming machines; 400 table games; and 2,000 hotel rooms in 19 facilities in 15 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario.”
The pari-mutuel properties in the Penn National portfolio — the namesake flagship, Charles Town and Zia Park — are slot-supported, third-rate racetracks. It is developing a casino at Beulah Park, in Ohio, has an ownership position in the Maryland Jockey properties, Pimlico and Laurel, initiated in anticipation of favorable slot-machine legislation, which is at least a year away. While undertaking aggressive lobbying efforts in Annapolis, it added the long-shuttered Rosecroft Raceway, purchased only last week. Penn National also operates three harness tracks, one of those, in Toledo, Ohio, with a casino under construction, four off-track wagering facilities and two account wagering platforms — these, apparently, for the benefit of the dead. Obviously, it has no real interest in the promotion or marketing of racing.
The Penn National leadership should be congratulated for an aggressive expansion beyond its roots as operator of a backwater racetrack in Pennsylvania to take a place among the nation’s leading gaming companies. It generated nearly $2.5 billion in revenue last year. But its corporate view of racing — minor if adjunct to casino gaming rather than the core product — has made it impossible to discern the tail from the dog.
Meanwhile, the typical racino patron, according the demographic surveys, is no more youthful than the group pronounced dead by Carlino — a female over age 60. And while Carlino observed that alternative gaming options do not draw new customers to the pari-mutuel windows, no one has ever suggested that they might. In most cases, racino patrons are isolated from racing and horseplayers are confined to remote, out-of-the way areas, away from the bells, lights and neon.
This may not be a growth industry at the moment and it is perhaps understandable that a grim view of the sport from the rail at Penn National or Charles Town would offer little in the way of optimism while adjacent casinos are heavily trafficked, but it is premature to issue a death certificate for the racing game on the basis of evidence gathered from the tracks owned by Penn National. Nationally, betting handle in 2010 declined by 7.7 percent from 7.4 percent fewer racing dates, so it would appear that in light of a challenging economic climate and over 9 percent unemployment, racing held its own last year. The amount of money wagered nowadays, not attendance, is the telling statistic in determining the sport’s relative health. The audience is scattered in the digital age.
Racing’s enthusiastic presence on the Internet and social networking sites suggests convincingly that the game is far from dead and a significant portion of the audience is younger than Carlino believes. Horse of the Year Zenyatta has more than 60,000 FaceBook fans. Racing web sites, blogs, message boards and news aggregators are robustly trafficked. This is, however, a sport to which a mature audience that brings with it the luxury of disposable income and time is eminently important.
With the oldest members of the baby-boom generation entering retirement and some 30 million to follow into the realm of time free from the constraint of gainful employment, their participation is very likely to be felt in the betting pools if not in the form of live attendance. This has always been the age group that supports racing on a daily basis and remains the declining core of those in regular attendance, wherever that may be on the splintered landscape of wagering options.
Beyond the days on which the most important races of the year are run — none of which are run at Penn National’s properties — and boutique meetings, the live audience will never again be robust. Technology and mobility have removed the necessity of the physical on-site presence of horseplayers. Racing is now a made-for-television commodity and the social aspect of gathering at the track has shifted to simulcast facilities, where smaller groups gather no less regularly. The sum of these, still alive and betting, would be formidable.
Horseplayers are unlike gamblers drawn to games of pure chance. While it is true, as Carlino notes, that the presence of racing does not appeal to slot players neither does the presence of slots draw gamblers from the community of horseplayers. They are distinctly different types and while a national explosion of gambling alternatives in the last two decades has taken a toll on racing, there will always be the type drawn to the challenge of solving the unique mystery posed by every race.
Belief that the end of racing’s days will coincide with the death of the last horseplayer has been long and widely held but has always been fallacious. Racing has seen better days but is in far from grave condition. As long as places like Saratoga, Belmont Park, Keeneland, Churchill Downs, Santa Anita, Del Mar and Monmouth Park remain, young people, no doubt fewer than during past eras of prosperity, will find themselves drawn to the racetrack atmosphere, the compelling challenge of handicapping and the majestic animals around which the racing world revolves.
Originally Posted on ESPN