Sports betting is officially coming to Ohio on Jan. 1, 2023. When the calendar turns to the new year, Ohioans will be able to fire away on sports without needing to take a trip to neighboring states.
Among those watching this development with great interest are Ohio residents in the horse racing industry. Long one of the few legal forms of gambling in the Buckeye State, horse racing now faces a challenge for legal in-state betting dollars.
However, while sports betting can be seen as a threat, there are reasons to be bullish about Ohio horse racing betting. Let’s take a look at the state of the business, and what we may be able to expect moving forward.
The health of Ohio horse racing
There are three thoroughbred racetracks in the state: Belterra Park, Thistledown and Mahoning Valley. In addition, Ohio also contains a standardbred (or harness) circuit. Trotters and pacers go postward at Dayton Raceway, Miami Valley Raceway, Northfield Park and Scioto Downs.
All seven tracks have racinos. Ohio’s sports betting law could allow for each to partner with two online sportsbooks (or “skins”) for access, and the tracks can have a retail sportsbook. So, however horse betting fares after the introduction of sports betting, at least the framework gives additional revenue to the tracks.
Ohio’s horse racing circuit is a step down from those in states like Kentucky, New York, Florida and California. The 2022 calendar boasts just a single graded stakes race: The Grade 3 Ohio Derby, run at Thistledown on Saturday, June 25. However, that doesn’t mean business is slow.
All of these tracks are owned and/or operated by major gambling companies. Boyd Gaming, Jack Entertainment, Hollywood Casino, MGM, and Caesars all have pieces of the action.
That action has proven profitable over the past several years. In 2021, Mahoning Valley’s fall meet set records for both handle and purse distribution. In addition, the Ohio State Racing Commission is expecting a fiscal year gain of more than $400,000 despite larger operating expenses.
The most recent OSRC annual report is from 2020, and it illustrates significant growth in the past decade. In 2012, the OSRC reported total revenue of less than $9 million (the lowest such total since 1958). Despite 2020’s business being impacted by the pandemic, the OSRC reported revenue of more than $17.8 million.
Paths forward after sports betting is legalized
Tracks in neighboring states can provide clues about where things may be going. Like those in Ohio, they’re backed by major gambling companies, and several are enjoying significant success.
One of the best examples is Charles Town. Like Ohio’s Mahoning Valley, the West Virginia track is owned by Hollywood Casino. Since the mid-2010’s, Charles Town has enjoyed steady growth.
In 2020, the track celebrated its sixth consecutive year with a new record in wagering volume per race. The average handle of $231,518 that season upped the previous mark by nearly 50%.
In a press release celebrating those numbers, Vice President of Racing and Sports Operations Erich Zimny said:
“2020 was obviously challenging for everyone. The job our whole team did in helping us not only return from a shutdown earlier in the year, but allowing us to achieve business volumes for racing that are unprecedented in our history, has been remarkable.”
West Virginia began accepting sports bets in mid-2020. Despite what could be seen as competition, Charles Town thrived, and that’s a welcome sign for anyone in Ohio nervous about the competition.
Integrating sports betting with racing
Horse racing’s critics have said the sport needs to evolve in order to meet challenges from other forms of betting. That begs the question: Are there ways to tie sports betting and horse racing together once the former is legalized?
While sports betting in California is illegal, Santa Anita Park ran free challenges during football season. Dubbed the Santa Anita Pick ‘Em, it challenged participants to pick as many correct prop bets and race winners as possible. It rewarded $500 to each winner this past fall and returns this October.
Numerous tracks, of course, have on-site sportsbooks. New Jersey’s Monmouth Park took the state’s first legal sports wager from Gov. Phil Murphy in 2018. The next year, both all-sources handle and on-track attendance at Monmouth’s races rose approximately 17%.
Questions to answer, and an encouraging conclusion
There are, of course, many factors to consider with these trends. Are tracks linked with casinos and sports betting reinvesting profits in racing? Are efforts being made to lure casino and sportsbook patrons over to the racing side? Perhaps most importantly, are those who come to properties with horse racing and sportsbooks coming back, and if so, where are they going?
Those questions will be answered in due time once sports betting launches in Ohio on New Year’s Day. However, there’s enough data out there to suggest horse racing in the state is far from doomed. The industry has made significant financial strides over the last decade, and other tracks with similar profiles have done just fine after sports betting’s legalization in other states.