In addition, the racing fan is older. A previous post discussed the age of racing enthusiasts. They're not getting any younger, which will be the end of racing if not reversed as generally dead people don't bet on the ponies, but have been known to still vote.
Not to brag too much, but I wrote a "critically acclaimed" post analyzing the racetrack industry according to Porter's Five Forces model. Who were the critics? Well they were a friendly audience to be sure, but I did receive positive feedback from a noted industry expert, who is quoted in the Casino Journal article which will be subsequently discussed.
Casino Journal magazine had a great article in its February 2010 issue regarding racing. The article does a good job of highlighting the indicators of racing's decline and does a fair job of analyzing why racing is in decline. Adding this blog's post regarding Porter's model will add additional color to the reader's inquiry.
What surprised me in a negative way was that my incorrect impression that racing handle was at least keeping static, albeit not growing. Not the case. The article states that total racing handle (i.e. bets) fell from $15.2 billion in 2003 to $13.6 billion in 2008. Even the off-track handle, which was supposed to be the strongest element (on-track handle was known to be an issue) fell from $13.3 billion in 2003 to $12.2 billion in 2008.
The article touts the promise of off-track betting, betting exchanges and racinos to help racing's future. Not including betting exchanges, the other concepts have been in place for several years and racing is still in decline. Betting exchanges have a flaw in that they are peer-to-peer bets with a low commission (takeout). They are not going to be able to generate sufficient revenue to save the industry and quite possibly will cannibalize the existing higher takeout pari-mutuel wagering base.
What is important to note is that none of these concepts do a thing to address the core issue facing horse racing - the increasing age of the racing enthusiast demographic. The sport needs younger horse players. No one has come forward yet with a concept that holds the promise to do that. There is a new concept that is in early stages of development that might "crack the code" to solve the need for new horse players while also generating increased pari-mutuel revenue for the industry.
References:
Doocey, P. (2010, February), Post Time for Change: Racinos won't save racing - Some fresh ideas might, Casino Journal.
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