By some measures, financial results for the 2012 horse racing season improved from the previous year, according to the latest wagering figures, and several industry experts said those numbers demonstrate encouraging progress toward their goals of reinvigorating the troubled, once-lucrative sport in Maryland.
Both the total and the average daily handle — the sum of all bets placed during a set time period — increased in 2012 from 2011, according to numbers released Saturday by the Maryland Jockey Club. The average daily handle jumped 7.5 percent, from $2.27 million to $2.44 million, while the total annual handle grew 0.7 percent, to $446.6 million.
Cricket Goodall, executive director of the Maryland Horse Breeders Association, said it would be better for the industry to see larger increases in the total handle. But she said the numbers indicate the potential long-term impact of recent efforts to make Maryland horse racing more attractive — namely, increasing payouts by allocating new casino revenue to purses.
“Wagering has declined overall in the past few years, so any increase is good news, and an indication that we’re on the right track,” Goodall said. “We have to continue improving year after year, but at least we’re seeing some evidence that [efforts] are beginning to work.”
Because state law allocates 7 percent of slots revenue to the pool of money paid out to owners of winning horses, the expansion of gambling in Maryland means larger purses — and higher potential payouts lure more owners to enter a race.
Races with a larger field size are also more competitive, which entices more people to participate and encourages them to place higher wagers, said J. Michael Hopkins, executive director of the Maryland Racing Commission.
“It’s evidence of what we’ve been telling people,” Goodall said. “If the money is there, it means the racing and breeding businesses in Maryland will both improve as you add more money to purses. It attracts more horses, and consequently more betters.”
Hopkins, who described himself as a “glass half-full kind of guy,” said he thinks the trends show a favorable response to more tempting racing conditions. He said he’s hopeful the total handle will increase at a higher rate in the upcoming year.
“I think the 0.7 [percent increase in total wagering] was based on the entire year,” he said. “But when you take a look at the 7.5 percent [average handle increase]… that’s related to the larger field size, which creates larger interest because you have more choices per race. So if a trend like that continues throughout the current calendar year, you’ll see a much larger increase than 0.7 percent.”
The figures take into account increases or decreases in all types of wagers: live (bets placed on Maryland races by people at Maryland tracks), imports (bets placed on out-of-state races via simulcasts at Maryland facilities) and exports (bets placed on Maryland races by people in other states).
Because the state gets a higher percentage of bets placed on live races than it does of wagers placed on imports or exports, live racing has the biggest financial impact. But exports are also very telling, Goodall said, because they illustrate the competitiveness of the state’s races.
Total exports increased 17.5 percent in 2012, while total live wagers increased 6.6 percent.
“The live handle is what we make the most money from … but what’s most impressive is the export handle,” Goodall said. “If people are betting out-of-state on your races, it means your races are competitive enough to attract more betters. And there’s a lot to choose from; there’s races across the country.”
As for imports, although those numbers are down 23 percent for 2012, Hopkins said that segment is less important to the industry because Maryland owners and breeders aren’t at stake in those races. State facilities offer them via simulcasts because some betters demand them, Goodall explained.
“You have to give people the option if they want to bet on those races,” she said.
Catering to disparate demands — whether for ideal betting conditions or the festival atmosphere of the Preakness — has always been, and will continue to be, crucial to the sport’s future, Goodall said.
That’s especially important given the 14.5 percent decline in attendance in 2012 compared to 2011, which Goodall and Hopkins both said they found puzzling.
“What [the decline] is showing is that there’s a lot of competition for leisure dollars, whether it’s people betting or people just going out to sporting events,” Goodall said. “And that’s why you have to produce an experience when they get there that’s attractive to them.”
Tom Chuckas, president of the Maryland Jockey Club, was not available for comment Monday. But, in a written statement, he called the increase in live and export numbers “significant” and attributed the boost to larger purses, better field sizes and more aggressive marketing.
By paying attention to those three elements, the industry can work to increase the total handle more substantially in years to come, Goodall and Hopkins agreed.
Last month, the industry’s leading players signed a 10-year deal they said would ensure the stability of horse racing in Maryland. The agreement guarantees 146 live racing days per year and lays the groundwork for capital improvements to state facilities, among other things.
Though Hopkins said the agreement didn’t have much impact on these figures, Goodall said the deal is an essential reminder of the importance of marketing to every customer.
“Live racing actually gives you the chance to grow your fan base,” Goodall said. “We want people to have the experience of coming out and going to the track. That’s what we were so fearful would dwindle away if there was less live racing.”