New campaign to bolster interest in Pennsylvania's horse-racing industry
For several weeks in May and June, the nation's eyes are on horse racing and the elusive Triple Crown — especially in rare instances like Saturday's Belmont Stakes, where Justify has an opportunity to make history.
But in Pennsylvania, the horse-racing industry hopes to capture more attention year-round to bolster betting and attendance that have flagged amid competition from the casinos that subsidize them under state law.
According to the 2017 Racetrack Casino Benchmark Report, attendance at the state's six tracks declined 7 percent in 2017 compared to the previous year while the “handle,” or the total amount bet on races, rose above $700 million for a 3 percent increase. It marked the first year-over-year increase since 2013 — with all of it attributed to growth in out-of-state betting on simulcasts of Pennsylvania races, because betting decreased in every other category.
To try and attract more people to the sport, horse-racing officials hired Harrisburg-based ad agency Pavone to work on a marketing campaign, using a small portion of the $239 million in slot-machine revenue set aside for the state's Race Horse Development Trust Fund, said Pete Peterson, spokesman for the Pennsylvania Equine Coalition.
“Millennials are more interested in experiences, and what is going to the track but an experience?” said Peterson, whose organization is a statewide umbrella group for race horse owners, breeders and trainers.
Pavone has been working with the coalition on its goals, but has yet to settle on how it will take its message to a broader audience, Peterson said.
While the Triple Crown makes horse-racing highly visible for a short time each year, Peterson acknowledged that there was an “intimidation factor” to actually going to a track and placing bets. Part of the upcoming campaign would be aimed at making the races more accessible.
Kim Hankins, executive director of the Meadows Standardbred Owners Association, said his organization in Washington County had put its advertising money into sponsorships with the Penguins, buying advertisements and wrapping buses in ads. Even though the casino's table games and slots were theoretically drawing gamblers away from the harness races, the two sides of the business worked closely together on marketing, he said.
“It's the casino's duty to capture the slots market, and it's our duty to generate new fans,” Hankins said.
He welcomed the new statewide marketing effort, hoping it would restore horse racing and an evening at the track to one of the top 5 things people think of when making plans to go out.
Safe funds stir optimism
When they legalized casino slots, Pennsylvania lawmakers set aside a portion of slot-machine revenue to support the horse-racing industry largely because the tracks feared losing customers to casinos, Peterson said. About 80 percent of that fund goes solely to increase purses — the prizes for race winners — which went up to $174.4 million last year, according to the benchmark report.
Other parts of the fund, which Philly.com noted was bigger than the budget of Pennsylvania's Department of Agriculture or Department of Health, pay for health care and pension benefits for people within the racing industry, provide incentives and fund races for Pennsylvania-born thoroughbreds and standardbred horses, and pay to promote horse racing.
Peterson said the state had raided the Race Horse Development Fund for money in previous years, which made it harder to guarantee that winners would get large prizes that could trickle down to the breeders, trainers, veterinarians and groomers the owners pay with their winnings. But the gaming expansion bill last year made that into a protected “trust fund,” preventing it from being diverted to other parts of the state budget.
That certainty has given Peterson reason for optimism.
“When you invest in a race horse, that's a major investment. ... You want to know there will be purses to pay for your annual costs,” Peterson said. “Farmers are getting more money for their products; jockeys and drivers are getting paid more; staff, trainers and vets can earn more money for their services.”
“It's a definite, thriving industry, but things are very fragile,” said Richard Balmer, a veterinarian from Canonsburg who worked on horses at The Meadows for seven years before going into semi-retirement four months ago. He said that the protection of the “trust fund” offered some reassurance, but if slots revenues dropped or the fund dried up, “it would all be over.”
Balmer, 70, noted that during his time in Canonsburg and 42 years he spent working at tracks in New Jersey, he spent lots of money to support other local businesses.
“The horse people spend a lot of money,” he said. “We are a part of the community, and we're a major player.”
Growing purses have helped winners and the people who work for them, Hankins said.
“They benefit proportionally to how well they do,” Hankins said. “It's helped the number and lifestyle of horsemen.”
Farmers who don't breed winning race horses, however, don't get to see that money, said Lisa Lynn, co-owner of J&L Lynn Sporthorses in Franklin Township.
“It's not affected us whatsoever,” Lynn said. “You can have the best-bred horse in the world, but if they're not in the right hands when they leave the farm, it doesn't matter. ... We haven't gotten our horses into the right hands.”
Lynn said her farm had downsized over the past few years and wasn't attending as many Pennsylvania-bred sales.
“Unless you have a big-name farm, you're just small fry,” she said.
Though the state's report noted that the number of thoroughbred foals had declined last year and the standardbred foals remained steady, Peterson said there were more thoroughbred mares bred, potentially meaning more foals down the line, and there had been a 25 percent increase in sales of standardbred horses at the Pennsylvania Farm Show Complex.
Gambling expansion: complement or competition?
What was still uncertain was how the racing industry would be affected by the creation of new “mini casinos,” the creation of state-sanctioned online gambling and the legalization of sports betting.
Peterson said some unsanctioned online gambling outlets were already cannibalizing racetrack revenues by allowing betting on races outside the state's established system. It was unclear whether people who bet on horses would be drawn to spend their money on sports betting instead, or if the two could complement each other.
“Sports betting is a mental decision, whereas slots are ‘push-a-button,' ” Hankins said. “Horse racing is also a mental decision; you have to put some thought into it. ... We don't know how they're going to apply (sports betting) in the commonwealth; if it's just allowed at a racetrack, it could offset some of what we'd lose in revenues.”
Opening new slots at mini casinos could increase revenues to the trust fund, but those casinos also could draw away gamblers who might otherwise visit both the games and track at places such as The Meadows, where the two share a venue, he said.
In the end, the industry will just have to try to adapt and survive — as it has when the state legalized table games, slots or even when it started a lottery.
“All these things have impacted us over the years. ... When we were the only legal way to bet, we were the only way to scratch that itch,” Hankins said. “Now you can walk into any convenience store, buy a cup of coffee and get some scratch-off tickets.”
Matthew Santoni is a Tribune-Review staff writer. Reach him at 724-836-6660, email@example.com or via Twitter @msantoni.