SAN FRANCISCO (08/28/2000) - This is the time of year - August and into September - when horse racing almost seems like part of the mainstream again.
At The Spa in Saratoga Springs, N.Y., and "where the surf meets the turf" in Del Mar, Calif., tens of thousands of Americans flock to the racetrack five days a week, lugging coolers and trailing the kids behind them. They cheer the horses, place a few bets, buy souvenirs and go home happy.
Racing enthusiasts cling to the quixotic belief that every day should be like this. But except for the Triple Crown events in the spring and the Breeders' Cup in the fall, racetracks are empty. Clusters of old men wave cigar butts, their curses and torn-up pari-mutuel tickets wafting eerily through grand arenas that were once home to the most-popular spectator sport in America. The reasons for this are myriad: Racing's blue-blood owners refused to put the sport on TV years ago, simulcasting led to more off-track betting and hurt attendance, while other forms of gambling proliferated and stole customers.
As the sport suffered, so too dwindled the fortunes of its legendary newspaper, the Daily Racing Form. By the 1990s the broadsheet's circulation had dipped to 18 million a year from nearly 40 million. And while Walter Annenberg sold it in 1990 for an estimated US$400 million, its value had sunk to one-tenth of that by the time it changed hands again two years ago. The problems: Tracks began to provide cheaper programs, simulcasting led to different editions depending on what areas got what feeds from different tracks, and the cutthroat world of newsstand distribution made the Racing Form increasingly hard to find.
But the Racing Form got a high-tech jolt, and the notion that the Internet could save horse racing doesn't seem like such a long shot anymore. Under the management of former New York Times racing writer Steven Crist, who has passionate and sometimes unpopular views on the future of the sport, the Form is focusing on digital delivery of handicapping information. "It's a year-round sport," says Crist, "and fans need up-to-the-minute information every day."
Crist's strategy may point up an emerging truth about the Internet: feeding a hot-wired niche audience is better than courting a broad market. In the meantime, the Form is starting to make a little money.
Like the mighty Wall Street Journal's WSJ.com, with its 461,000 paying subscribers, the Racing Form already gathers voluminous data for its print edition. And no one resembles stock traders more than serious horse players.
Potentially, it's a big business. Of the $14 billion wagered on the ponies every year (movie ticket sales last year, by contrast, totaled less than $8 billion), 10 percent of the bettors staked 90 percent of the money. These are hard-core gamblers, info junkies looking for an edge, and they're Racing Form readers. "The average person bets $125 a day at the races," says Crist. "A Form user bets $500."
After all, it costs only four bucks to buy a copy of the Form at newsstands, for which you get a tabloid chock-full of data about the horses entered in that day's races. Called "past performances," it's page after page of statistics - speed fractions and bloodlines, records on wet tracks and fast tracks, sprints and longer distances, dirt surfaces and turf. A degenerate pursuit, perhaps, but a scholarly one.
All these numbers are perfectly suited to the Internet. And talk about sticky - a handicapper can spend six hours analyzing the day's races before the first bugle sounds. The Racing Form's Web site, drf.com, provides racing news, but its new online product, Formulator, supplies past performance information that you can interact with. Other sites provide past performances, but the Form's are the most sophisticated. Colorful charts supplant the black type of the printed version of the Form, and some features let handicappers enter new realms of number crunching. "If you want to know how a horse has run in wet weather, click and it's there. On the grass, at a certain distance, and so forth," says Crist. "It is useful for both the experienced player and the novice."
But especially for the experienced player - and this is where Crist parts company with many of the mandarins of racing. Racing mavens have been arguing for years that the sport's salvation lies in marketing. Our audience is dying off, they moan. We need to get young people, the MTV generation, interested. A succession of near-comical marketing campaigns ensued, like the 1998 spots with actress Lori Petty, described as "hip, cool, slightly naughty" to the crusty, uncomprehensive overlords of the sport. "Well, since everybody hates it, maybe it'll work," one racing aficionado told the New York Times.
Crist thinks these efforts are absurd. "The real potential is getting more volume out of existing customers, not expanding the base. Attracting 21-year-olds - that argument's been made for 50 years, but racing has always been an activity that appeals to older people. You need two things - disposable time and disposable income. It'll always be a specialized, somewhat eccentric activity that appeals to people who like the intellectual challenge of doping out the races."
So forget hiring rock bands on race day and let the real customers play the game from home. Already, The Racing Network, based in Bensalem, Pa., has 10,000 subscribers paying $320 apiece for satellite dishes that beam races from 60 tracks into their homes, on which they can bet over the telephone in certain states. The Television Games Network, owned by Fox and AT&T Corp., is providing a similar service on cable. Customers in 39 states can place bets through Youbet.com, routed through a Hilton-owned company in Pennsylvania, where interstate wagering is legal. Hundreds of racing-related Web sites have sprung up that support this Internet traffic.
People have talked for years about the Net's potential in the $600-billion-a-year legal gambling industry. It's an obvious killer app. But most online gambling is conducted from off-shore locales in the Caribbean.
Racing doesn't have to hide out in Bermuda, but the legality of telephone betting on races has never been spelled out.
Merely providing information avoids this legal murkiness, and that's the Form's mission. Its Internet venture, which cost about $500,000 to launch, is expected to generate more than $1 million in revenue this year. To see the potential, one need only do the math. The Form has 21,000 open accounts, meaning customers can pay $3 to download a day's worth of data. Unfortunately, most customers are doing just that, dialing in individually on weekends for big race dates. But if these people can be convinced to become regular subscribers, the numbers will change. For $60 a month, they can download 60 race cards. Or for $800 a year, they have unlimited access. Only about 100 customers currently pay the yearly fee. But if, say, 100,000 people sign up, that's $80 million in revenue.
That would be big money, but Crist is by no means counting it. Horse racing, he repeats, shouldn't bank on wrestling back much of that $600 billion gambling business. Figuring out a horse race is too difficult. "It's never going to compete with other forms of gambling. "Most people are stupid," he says drily, "and would rather pull a handle." The Form, then, will stick to the scholarly degenerates.