Most betting operators have embarked on diversification strategies with a fair margin of success and this seems to be the trend that will persist into the foreseeable future. I applaud them for adapting to a fast changing and challenging market and for adding value for shareholders whilst having to subsidise racing at the same time.
Subsidise racing? This is the concerning part of what has just been said, but this is very much a reality, and if the current situation continues will demote racing, not long from now, to a second rate industry fighting for survival.
The important question that needs to be asked is whether betting operators still have a belief in racing or are they happy to condemn the sport to a subsidised existence?
The evidence is pretty clear that racing (not necessarily individual operators) is actually quite good at retaining customers but has a very disappointing acquisition record. This has led to a reliance on churn for growth and product development focused only on maximizing turnover from the existing customer base.
Racing can and will grow significantly and sustainably if the non-traditional market can be targeted effectively. This market requires a different approach and product set but investment spend in this area will be well worth the effort and completely cost effective in the long run.
The key ingredient that is lacking at present is a more entertainment driven offering. This could be easily remedied by introducing a range of products with characteristics tuned to satisfy a broader need for value for money fun and excitement. Through increased exposure racing will gain considerable traction and return to a path of sustainable growth.
Betting operators should not be overly concerned about the size of new individual wagering spending, but rather about attracting multitudes of players to the game. Players must be allowed to determine their own level of comfortable involvement, but make it extremely attractive and exciting to be part of the game. It should not matter if a player has a small or large casual or regular involvement, or a more serious contribution to the game, we just need players excited about getting on.
Over time, many committed players will emerge through exposure for the benefit of individual operators and the racing industry as a whole. Racing can be the number one wagering activity again if we give it a more endearing character.
Betting operators will experience a meaningful increase in profitability in their core business if they were to introduce a new value proposition for racing. By introducing an innovative line of player friendly and entertainment driven betting products racing will be far more attractive to a much broader and more diversified market.
Racing will show dramatic gains that will restore the belief of even the sternest detractors of the sport. An entertainment driven model will offer racing sustainable and profitable growth opportunities for decades to come.