The Decade Double

Here’s a Daily Racing Form headline from 2024 (yes, the future):

North American Racing Handle Doubles Over the Last Decade

Do you find this headline completely unbelievable? It shouldn’t be. Let me ask this: how much would betting handle have to grow year-over-year for 10 years for that headline to be true? It’s not large – it’s only a 7.2% growth rate, compounded annually. In terms of growth above normal economic growth, it’s only a 3-4% adder to normal national growth trends.

Doubling handle would mean that contributions to track earnings and purses would also double during that period. (Neither earnings nor purses would double, since those are supported now by other sources like admission, concessions, and slots) I think most observers, seeing that handle was at an historic high, would no longer say that “horse racing is dead” but that racing was as good as it had been in 30-40 years.

Now, here’s two alternative beginnings to the article that accompany the headline. Which do you find more plausible?


1. Industry officials celebrated the 10th consecutive year of handle growth, noting that wagering on thoroughbred racing has doubled since the US marked the unofficial end of the Great Recession in 2014. Attendance and off-track wagering both doubled, track revenues increased 80%, and purse accounts increased by 60%. The purse account increase reflects that purse subsidies from other sources (racino/slots revenue, sales, supplemental fees) remained flat during this time. Tracks and horsemen used the windfall to increase races by 35% while the average purse went up 18%. Breeding finally reversed a two-decade long decline as the 2023 foal crop of 40,000 returned to levels not seen since 1991.

Most track officials credited their marketing and promotional efforts to get fans back to the track as the main source of success, but acknowledged that Jess’s Dream – the first foal of popular 2009 Horse of the Year Rachel Alexandra – winning the Triple Crown in 2015 kick-started their efforts. When “Taco” came back to race in 2016 and dueled in a cross-country campaign with the late-developing Cozmic One (Zenyatta’s first foal), the Breeders Cup Classic at Belmont Park featuring their final duel (won in a late nose by Cozmic One) set betting and ratings records for a non-Triple Crown race and energized the sport…


2. Industry officials acknowledged that the 2014 “Decade Double” initiative pioneered by The Jockey Club, NTRA, and a consortium of racetracks and other racing industry groups has met their goal of doubling betting handle on North American races in 10 years. The Decade Double initiative began with the premise that the $23 billion target for wagering on throughbreds would represent an all-time, inflation-adjusted, high indicator of interest in the sport. The leaders of the “Decade Double” campaign credit its focus on customers and getting buy-in from tracks and horsemen on how to share gains.

” We knew that the sport couldn’t grow without customer support,” said Jeff Gural, Jockey Club board member and head of the Decade Double Initiative. “Significant gains had to be realized by the customer – the bettor – and ultimately that meant lowering the price of betting on racing.”

“Working with our horsemen and tracks, we concluded – and believe me, it was a tense fight at times –  that bettors needed to see the lion’s share of gains, with tracks and horsemen splitting the rest. We settled on a 40/30/30 split, and that’s when efforts to reduce takeout by 40% began.”

This year, the average on-track takeout for a Win bet was 10%, which horseplayer’s Decade Double representative Andy Asaro noted was “much nearer betting the LA Jaguars and the points in the Super Bowl.” Exotics averaged 12-14%; in 2014, however, the typical takeout on exacta or trifecta pools was 20-25%.

The Decade Double and industry groups like NYRA and the CHRB aggressively promoted the takeout decreases, at first in hopes to keep track revenues and purse accounts level. Most groups acknowledge that the success was unexpected: track revenues have increased by 48% and total purses by 36%, despite the lower takeout. Racing days and total races have remained flat in response to a lower profile DD initiative meant to prop up field size in response to low foal crops. Even those have since recovered to a “healthy level” of 35,000, what many breeders consider sustainable at this level of betting…


It truly is amazing how growth can positively impact everyone while stagnation leads to tribalism and in-fighting and decision-making based on the fear of loss as opposed to the hope of gain. That’s unfortunately where horse racing is today.

Article 2, even if the numbers aren’t exact, shows that broad-based gains are possible if they accompany a plan and a target for growth. If we collectively bet $20B on racing, no one could rightly claim that racing was dead. It is, however, hard to envision that future if customers do not share in those gains. And again, the numbers are not daunting:

  • To double in volume, handle needs to increase by 7.2% a year.
  • To decrease takeout by 40% over 10 years, takeout needs to decrease by 5% a year.

The key, of course, is to offset the short-term revenue decrease from pricing with 2 other Ps of marketing.

  • Promote the heck out of the sport emphasizing lower prices (and other promotions)
  • Product quality needs to stay high /  improve (larger fields, showcase racing days, etc.)

The time element is the hardest part, because it’s not an overnight fix. Nothing worth doing ever is.

Racing’s Target Segments, Part 3 – Handicapping as a Serious Pursuit

Parts 1 and 2 found here.

In part 3, I’m going to concentrate on what I believe to be racing’s most important segment – the serious handicappers and professionals that make up the vast majority of wagering handle in North America. They are the segment that supports the sport outside of its biggest days, betting millions on races Sunday-Friday somewhat in the name of fun but more as an opportunity to make money by applying their intellect to the game.

This segment has significant overlap with the sports betting market generally, though that market is technically illegal outside of Nevada. Horse racing remains unique in that it can be bet without being present at the track, typically online through an Advanced Deposit Wagering service or at a simulcast outlet. Most readers of this site  – mostly the horseplayer community on Twitter – are familiar with the basics of how this works. This segment truly values one thing – a positive expectation bet (or the perception therein). Handicappers call these opportunities overlays.

In order to increase interest from the serious/professional gambling segment, horse racing must increase the number of overlays, or positive expectation bets, in its races and racing cards that attract this class of bettors.

The mechanisms for creating more overlays in racing are well-known but largely boils down to increasing the size of betting pools, increasing the number of combinations that can be played, and increasing the payoffs of winning bets. Several factors can go into this, but there are three main ones with pari-mutuel betting:

  • Increase play from casual gamblers / non-handicappers
  • Lower the price of betting (the takeout rate)
  • Increase field size

Having “less informed” money bet into the pools – from casual gamblers – was largely the subject of the first two posts, but it helps explain why bigger race days have better betting opportunities. It also explains the growth of poker to a degree – the early days of the boom, pros had a field day with casual players coming in. When casual fans “play numbers”, play “names”, “bet favorites”, “bet longshots”, “box superfectas” – those benefit the dedicated players by increasing the odds on everyone else.

Which leaves takeout and field size. The digital literature on why field size and takeout rate and their impact on payouts/overlays is voluminous, so I’ll try not to belabor the point too much. My thoughts on takeout can be found here:

Takeout – The Price Isn’t Right: Part 1 | Part 2 | Part 3

To sum up, takeout decreases will naturally increase handle thru the churn mechanism but most likely will not increase track revenue because of how the takeout is shared amongst the track, bet-takers, and purse accounts. To truly drive gains, handle (price) decreases must be tied to a strong marketing plan that includes promotion on and off-track and alignment with horsemen. There is, however, a takeout rate (below 12%, I believe) where parimutuel bets on racing become competitive with sportsbooks. This price level will attract more large sports bettors (whales) to the pools and racing will see handle gains greater than that produced by churn.

Field Size

Field size is equally, if not more important, to serious horseplayers in the search for overlays. Having more horses in a field allows the handicapper more data points to seriously consider (or dismiss) in search of a winner. Consider, for example, what happens when a 20-1 shot scratches from a race at the gate. If the handicapper gave the 20-1 horse (public gives 5% chance of winning), only a 1% shot (true odds of 99-1) to win the race, then losing that horse is effectively a 4% point increase in takeout for the bettor.

It works in reverse as well – full fields are a tremendous place for a handicapper to find value as, if she can identify a number horses that are overbet, the bet she makes has a positive expectation. It’s why I especially love the Kentucky Derby; the combination of a 20-horse field and, since Mine that Bird’s win, a betting public that won’t let any horse go above 50-1 again. You only need eliminate 6 horses from contention to make the Derby win pool a positive expectation bet.

The Average Field Size Metric is Misleading, Especially for Horizontal Players

Many horseplayers find their value by betting into horizontal pools like the Pick 3, 4, 5 and 6. The allure to these bets, versus straight betting and parlaying the results, is that takeout only happens once. More often than not, the horizontal return exceeds that of a similar parlay despite being, theoretically, of similar difficulty to hit.

Tracks often tout average field size (total starters / total races) as an indicator of the quality of their fields for betting purposes. And it is, but doesn’t tell the whole story. Take, for example, two theoretical racetracks that boast an average field size of 8.0. One track got that AFS score by carding two competitive 8-horse claiming races while the other paired an 11-horse turf race and a 5-horse main track clunker. One has 64 possible double combos but, for the same AFS, the second track has only 55 – 14% less. Almost all horizontal players will tell you the presence of multiple small fields in a sequence will depress payouts – this is why.

Is there a metric that can quantify the combo-killing nature of regular small fields? Yes. If we take the square root of the above scenario, we see that the two 8 horse races contribute an average of 8 combos to the double whereas the 11-5 double only contributes 7.4 on average. It’s easy to calculate this across multiple sequences as well – take these identical 8.0 AFS cards of 8 races:

Average Field Contribution to Horizontals (AFCH)

For any X number of races, multiply the field sizes together and take the Xth root [Field Size Product ^(1/X)] to come up with AFCH. For example:

Race 1 2 3 4 5 6 7 8 AFS AFCH
Track 1 8 9 6 8 7 10 7 9 8.0 7.9
Track 2 6 10 4 8 12 8 5 11 8.0 7.5

So, here we have a metric that allows to not just look at the number of horses run but also look at how the cards are constructed to produce value for the horseplayer.

The important thing here is that AFCH is probably more important for serious horseplayers in the search of overlays at a track than just field size. Since spreading tickets is a popular horizontal strategy that introduces overlays in those pools, minimizing the number of “free squares” is distinctly to the track’s advantage.

Conclusion

Thus wraps up 4,000 words on the target segments of the horse racing market that used “Racing as Entertainment” as a starting point and veered into other discussions where that “meme” didn’t fit as well. Thanks for reading.

Racing’s Target Segments, Part 2 – Gambling on Racing is Entertainment

In Part 1, we teed up the idea that racetracks – or racing associations, like NYRA – have three distinct customer segments: 1) those that are entertained by racing as a sport, or special race days as “events”; 2) those that enjoy gambling, and have fun betting on the races; and 3) those handicappers that gamble tens of thousands a year or more as a profession or semi-serious pursuit. Thus, racing has three target markets (or channels) that requires distinct strategies to reach, though there is obviously some overlap in the means industry groups might employ.

1. Racing is a Sport, Sport is Entertainment – Part 1 can be found here

2. Racing Has Wagering, Wagering is Entertainment – How does racing convert causal fans into bettors and dedicated fans?

3. Racing Has Handicapping, Handicapping Makes Wagering on Horse Racing a Viable Pursuit – How can racing attract more wagering from the serious sports betting market?

Statement: Gambling is a National Global Source of Entertainment Value

The casino industry understands its customers as well as any on earth. Big gaming companies like Harrah’s and MGM are pioneers in using data to understand their players’ habits and then tailoring their offerings to optimize (if not maximize) the revenue provided by their customers. They know that some of their customers will depart McCarran Airport celebrating their winnings while the majority will leave with lighter wallets; however, they need the vast majority of those customers to feel entertained during their stay at the casino, win or lose. Vegas is in the business of creating repeat customers, and they’re very good at it.

In the last fifteen years, too often the response of racetracks and their owners to compete for the “gambling as entertainment” dollar has been to attach actual casinos to the track buildings. That trend has benefited some in the industry but to a large extent has mostly created distortions in how gaming revenue is shared across purse accounts, tracks, and states. Little of it has been used to promote the sport because, frankly, that was the more difficult path to have taken. Why? I imagine it’s because the casino experience has been frequently replicated and is well-understood. What makes a race fan into a horseplayer is not.

Thoughts on Converting Casual Fans of Racing Into Bettors and Dedicated Fans

1. It’s hard. – I’ll put this first since I think it’s important. There is no single solution or strategy that a racetrack or industry group can employ. There’s going to need to be lots of trial and error. Successes will often take time to develop and implement while failures will be more quickly identified and subject to scrutiny, even ridicule. They won’t come without investment of both time and money and will frequently require reaching out to groups that have been in the past been held at arms length (horseplayers, horsemen). The short-term ROI of a new bank of slot machines will usually be greater than your new idea; long-term benefits are more uncertain.

2. The racetrack competes less with professional sports and more with watching sports on TV and other free/already-paid-for leisure activities. – I don’t think I’m going out on a limb saying that horse racing’s target market is “sports fans who like to gamble”. Racetrack executives have largely chosen two strategies for reaching this rather large customer segment – “racetrack as ballpark” and “racetrack as casino”. The problem with these strategies are that they describe an experience that is strictly worse than the comparable experience. When compared to professional sports, horse racing is rarely at a high enough level to appeal to sports fans alone. On most race days nationwide, the the level of racing is comparable to watching church-league softball in Fenway Park. In racing, wagering makes the sporting experience interesting.

On the flip side, racetracks have a very hard time emulating the casino experience. There are literally acres and acres of space dedicated to a one game at a racetrack. 40,000 square feet (~1 acre) of casino space features hundreds of tables and video machines for dozens of different games and bets. Bets get made and paid off in less than 45 seconds – at a track, 30 minutes is the minimum time between races. Concessions are sold in stands, like the ballpark, and little can be had for free; not admission, not drinks, and rarely information on the horses running. In racing, the sporting experience makes wagering interesting.

I’d propose an alternative vision that is more “racetrack as sports bar”. The idea here is that the best racetrack experiences feature groups of people coming together to the track that have a mix of racetrack veterans and first-timers and men and women. Tracks need to recognize, however, that their sports fan patrons face a significant opportunity cost by going to the track, especially on weekends, with regards to watching more popular sporting events. This would involve transforming one or two general admission areas – and probably one club level area – to larger restaurant-style spaces with large video screens, table service with ample wait staff, and a large bar with multiple service points. The goal is to provide a “home base” for more casual fans that improves their experience for the time between races. Right now, the alternative is usually stare at an empty racetrack for 25 minutes. Parenthetically, I believe that Churchill’s “Downs after Dark” promotion comes closest to creating this vibe – combining a social event with exposure to racing.

3. Improve the racing program – what you buy for $2 at the track –  by placing an emphasis on new bettor education. – I swear I waste $2 every time I buy a program at the track. For a serious handicapper, the program provides no additional information to the Daily Racing Form (or self-provided handicapping materials). For the novice bettor, however, the information in the program provided remains almost entirely inscrutable as a guide for picking horses and making bets. There’s a lot of info “density” but often the novice wants/needs summaries, quick comparisons that guide decision making.

My hypothetical program “detail”  for each race would be an exactly two-page summary, left and right to view as a single spread. The left page would resemble the current Equibase track detail, but with only as much info as can fit on a single sheet. On the right page would be multiple top 5-8 lists with the entries on each list rank-ordered. The lists would be typical handicapping angles like “speed last race”, “trainer last 6 months win%”, “early pace/late pace”, “jockey win%”, “sire mud/turf pedigree”, and so on. At the very bottom of the page, put in the precise language for making a bet with blanks for dollar amounts and program number, emphasizing high-churn strategies. A sample instruction:

Betting Guide

  • If odds on your horse are 2-1 or lower –> “race 1, I’d like to bet $____ to WIN on the ____ horse.”
  • If odds on your horse are 2-1 to 6-1 –> “race 1, I’d like to bet $____ to WIN and PLACE on the _____ horse.”
  • If odds on your horse are 6-1 or higher –> “race 1, I’d like to bet $____ to WIN, PLACE, and SHOW on the _____ horse.”

4. Provide “quick-pick” terminals for players who like lottery games – There is definitely segment of the gambling population – rhymes with “plots slayers” – that will eschew all interest in the handicapping side of the game but may be attracted to the large payoffs that frequently occur in racing. It would not be difficult to create terminals that generated random tickets – say, for example, 100 dime superfectas for $10 – in an attempt to hit a jackpot each race. The machine logic could even be weighted to more likely outcomes – based on current (or ML) odds – to improve the hit rate of those plays.

On carryover days for multi-race bets (Pick 6s, usually, but also Pick 5s or Super Hi-5s), these terminals could theoretically generate positive expectation bets for those willing to play them. If you can prove the concept on the track, then expansion of these lottery-style machines outside of the track could be a potential windfall, since the money from them goes into pools.

5. Bundle, bundle, bundle – Product quality is important for attracting and keeping customers, so having them witness the best racing possible is important. It’s not the top of the list for most racing observers, but stakes racing is too spread out across the calendar. A track with two graded races running on consecutive weekends may attract 6,000 each Saturday. However, a single Saturday with two or more graded races may well attract 12,000 on its own. Classier race horses get more press between races which allows for the continuation of the handicapping process for the next one – the more horses a new fan remembers, the more likely he or she will be to return to a subsequent race.

6. Keep important prices low – What are the “important prices” at the track, especially for new patrons and novice bettors? Admission, programs, concessions, and WPS takeout.

  • Admission we handled in Part1 – tracks need not raise barriers to attendance save where demand is inelastic, which are only big race days.
  • Programs are an important informational and educational tool – do everything possible to get one in the hands of all your patrons.
  • Concessions means eating and drinking – your customers are there to have fun and fun is enhanced when the track offers value compared to other outlets and extra money is available to play the races.
  • WPS Takeout – The price of placing a bet is quite important and none more so in the simplest betting pools. Lower takeout in WPS pools means that winning bets return more. The implications are not only that winning bettors go home with more money but that there are more winning bettors. Simplifying assumptions, on an 8-race card with 18% takeout betting WPS only, 20 out of 100 people will go home ahead on average; at 15% takeout, that number rises to 27%. That 20% drop in takeout results in 35% more winners – creating winners is a fantastic way to get people back to the track.

I could easily write 1500 more  words on other ideas, but they would all re-emphasize the need for tracks to focus on the customer experience geared toward producing customer growth and increasing customer spend. These are, certainly, ideas focused on long-term growth when so many in the industry are focused on short-term survival. The industry and its players cannot continue to neglect this important segment, even if efforts are concentrated elsewhere.

In Part 3,

3. Racing Has Handicapping, Handicapping Makes Wagering on Horse Racing a Viable Pursuit – How can racing attract more wagering from the serious sports betting market?

Racing’s Target Segments, Part 1 – Racing as Entertainment

Recently Chris Kay, the head of CEO of the New York Racing Association (NYRA), defended the planned admission increases at Saratoga and Belmont (from $3 to $5) by comparing the relative affordability of a day at the races to a Yankees game, placing the sport of racing into the same entertainment category as professional baseball. By extension, racing is therefore competing with other premium-priced sports experiences that includes the NFL, NBA, NHL, and NCAA Football and Basketball.

Other commentators (and one or two NYRA board members, thankfully) pointed out the obvious difference between horse races and those events is the ability, at the track and online, to legally wager on their outcome. Racing is a gambling game and, for better or worse, derives most of its revenue from the takeout on wagers. Higher admission will inevitably lead to lower attendance and on-track handle; therefore, whatever gains you planned from raising admission will be somewhat offset by lower revenues from wagering. Hard to say how much, but multiplying last year’s attendance at Saratoga and Belmont by the $2 increase in admission is not a sufficient forecast for revenue gains – it’s one or two levels more complicated.

Yet the contrary claim that racing is not entertainment is equally untrue. If gambling was not entertainment, Las Vegas would not exist – very few people can make a living gambling, and may only do so based upon the contributions of those who play for entertainment. Poker, sports betting, and horse racing are the games that a dedicated few can beat because the public likes to play for fun. I know for certain that I am one of those bettors. I track my ROI, and despite having learned a lot about racing over 3-4 years, my expected value is not much above the takeout. I play for fun (as my income allows) and the chance at the big score one day.

All this discussion led me to tweet this:

Racing has 3 “modes”.  1.”Day at Races”->Entertainment 2. Gambling->Entertainment 3. Gambling->Serious/Pro | Racing needs strategy for all 3

— Mike Dorr (@mikedorr77) December 5, 2013

I thought the idea worth exploring further with a longer series of posts, the first of which is below the fold: Continue reading

The Virtual Sheik: A New Fantasy Horse Racing Idea

This article appears in the latest issue of the HANA Monthly, found here. Published and republished with mutual permission.


In my last post, my critique of current fantasy horse racing games centered on their formats that mirrored the experience of handicapping and betting instead of horse ownership. Improved variants allow for picking a small stable of horses for a season, perhaps adding jockeys and trainers to a fantasy team that earn points over the course of a season. Those games work, introducing an element of scarcity and valuation that can make for a successful contest. MyFantasyStable.com is one such game, though there are others. If those games have a flaw, it’s that many horses, trainers, and jockeys are either running for larger purses, start more runners, and ride more entries than other picks, thus overweighting luck versus skill in a given contest.

To this point, this evolution is more like successful games like Fantasy Golf or Fantasy NASCAR – fun games with clear rules and where an understanding of relative value can help a shrewd player succeed. The most successful fantasy games (football and baseball, then basketball) more closely replicate the experience of ownership. No horse racing game truly does this, but I think they could.

With that, I introduce my idea: the Virtual Sheik, so-named for the biggest-pocketed owners in the racing world. Here’s how I envision such a game would work:

1. Players start with a fixed pool of dollars to spend, say $1M, on horses currently in training who have run at least one race (with one exception).

2. Players would earn additional dollars for their stables by the purses that their runners earn.

3. The value of a given horse is determined by multiple factors, but the heaviest weighting would be on the value of the purses for which they have most recently run.

  • For example, to get Orb or Oxbow or Palace Malice, you’d have to pony up (pun intended) $1.5M or so to bring them into your stable. It would not be easy.
  • Maiden (MSW) runners could be had for $40-75K typically. These purse levels typically hold for other allowance runners.
  • Lower graded stakes or listed stakes runners would go for $75-300K
  • Most importantly, runners in claiming races would go for their most recent claiming price.

4. As the claiming game makes up the majority of races, this is where most of the action will occur. Just like the real game, if one of your horses runs in a claiming contest, it can be claimed by a competitor within the game. Similar rules would apply to the real claiming game:

  • For all horses, the claim must be put in before the race is run. This includes first-time starters in maiden-claiming races (which is the exception noted in 1. above)
  • If your horse is claimed, you get the claiming price added to your account. Its purse winnings for the race are yours.
  • If multiple claims are put in for a horse, the new owner is determined randomly.

5. For all non-claiming races, if a horse is not owned and a player tries to buy the horse for its calculated value, there is a short window for a “Monopoly-style” auction. Details:

  • In Monopoly, one of the least well-known rules is that, if you land on a property and don’t buy it for face value, it goes to auction among all players where it goes to the highest bidder. No one plays this way, but it’s in the rules of the game. Anyway…
  • After a player makes a bid for a non-claiming horse, there would be a 1- or 2-day “auction” for the horse where it would go to the highest bidder. It could be a live updated auction or a straight “second-price” auction like that on eBay. In this last scenario, every one who wants the horse can submit their maximum bid and purchases the horse for the 2nd highest bid + $1000.
  • The auction mechanism assures that no horse go below its true value (say a dominant MSW winner in a $40K race) and also allows for proper pricing on top-level stakes horses.

6. If a player wants to sell any horse to another player, all other players will be notifies and the auction rules above will apply.

7. To replicate the experience of ownership, dollars will be deducted monthly for each horse in a stable, based on their class. For example, $1000/month for a claiming horse up to $5000/month for a stakes horse. Owners would be required to maintain a minimum value of 3 months of expenses in their account.

8. Owners will get, say, $25000 per month added to their account to make sure total funds levels are sufficient to keep the game going. To mimic the breeding game of ownership, some special rules, apply, however to horses that are retired.

  • If a colt is retired sound and intact, at some point in the future, dollars will be credited to their account in some multiple of their 1st-year published stud fee. For example, if that stud has a first-year fee of $20K, his “retirement” value in the game might be $2M (a multiple of 100)
  • If a filly or mare is retired, the player is credited with a portion of their lifetime earnings. For example, a future broodmare with lifetime earnings of $300K might get an account credit of $150K.
  • Geldings would not get additional funds upon retirement.
  • I’m not entirely sure how to handle breakdowns and the like, perhaps a 10% insurance value. Like real life, that’s tough.

What I like about the above structure is that it creates a persistent game, which is what horse racing ownership is – there are no ownership seasons, no drafts, just auctions, claims, strategy and luck. It provides a framework for structuring games on multiple levels by simply varying how much money you have to start then pursuing different strategies to success. There could exist one big game, with thousands of players virtually owning most of the horse population and accumulating purses over time. Players could try to find the next Derby horse or build up their stable with multiple claiming level horses. Transactions, interactions, would be many. Or there could be multiple smaller games, with players starting with smaller budgets trying to build a stable on a budget. The opportunities are numerous.

On the technical side, this would be a much more involved game than those out there today. It is complex, but so is the world of horse racing. To me, it sounds like a lot of fun. There are at least three (Equibase, Brisnet, DRF) groups that have all the data to manage the game. Each would need an experienced company or partnership (Yahoo / NBC Sports, perhaps the new Fox Sports partnership with The Jockey Club) to pull it off and market it properly. It would require a lot of tweaks and experimentation. But I think it would be a tremendous amount of fun, and spur engagement from a base of sports-loving fans that don’t yet know what to make of horse racing. This would be an entree into our world – let’s give the proper amount of support it deserves.


As you may be able to tell from the last 2,000 words on the subject, an improved fantasy racing game is a passion of mine. Should an industry group or other interested party be interested in expanding this idea, I would love nothing more than to help bring it to life. The best way to contact me would be through Twitter (@mikedorr77), where I will see all racing-related inquiries. Thank you.

The Reality of Fantasy Horse Racing

Fantasy sports have been an enormously successful means of increasing fan engagement for the Big 3 professional sports organizations in the US: the NFL, the NBA and MLB. Fantasy baseball started the trend with the popularity of “Rotisserie” baseball, which has been around since 1980 (with a few predecessors), and I can remember playing a modified version as early as 1992 (I was 14). Fantasy football was the game that exploded the phenomenon, as its 4-month season with a weekly cadence, book-ended by a draft and playoffs, expanded its audience, being less time-intensive than its baseball counterpart.

Several racing industry organizations (the NTRA, Churchill Downs, the Breeders Cup, WinStar Farms, among others) have all launched and promoted “fantasy racing” games with the intention of attracting a new audience to the sport. I am not going out on a limb by saying that all these efforts that have thus far mostly failed to garner significant engagement from existing fans and have utterly failed in bringing fans of other fantasy sports to fantasy racing. This post’s title buries the lede – the reality of fantasy horse racing is that it sucks.

Successful fantasy sports games put the player in place of the owner.

For the most part, fantasy racing games fail because they replicate some other element of the sport, usually the handicapping and betting aspect. The current fantasy racing game being promoted is the Breeders Cup Fantasy Challenge; if you follow the link, you’ll see that the BC challenge is basically a weeks-long handicapping contest that is free to enter. It utilizes a few successful elements of fantasy football – weeks-long competition, free to enter, form up leagues – but the basic premise remains “pick a winner”.

The Churchill Down Road to the Roses contest tries to replicate the ownership experience somewhat by picking a stable of Derby contenders then earning points for their placing in Derby preps. The contest, however, almost infamously, spectacularly failed when one entrant picked Verrazano for all 6 spots in his stable, having an easy lead going into the Derby. Orb’s win prevented any major egg on CDI’s face, but still…

Successful fantasy sports games put the player in place of the owner by recreating situations that owners face.

In my estimation, good fantasy sports games do three things well: create scarcity, create differential value, and create interactions between players. These are all constraints faced by, say, an NFL owner. Bud Adams (a Nashville resident, I’m a Titans’ fan) can only employ 53 players, pay them a total of $123M, and can’t try to offer a player under contract with another team more money to play for him. A good QB is worth more than a good kicker, and The Blind Side taught us the value of left tackles. Still, players can be released, picked up, and traded and NFL general managers are constantly on the phones with their colleagues as they assemble their team.

Successful fantasy games create scarcity

In fantasy football, a player can play for only one team. A team can only have so many roster spots. A team can only start 1 or 2 players at each position.

I’m unaware of any fantasy racing game that actually prevents someone from picking a horse if it’s already been picked. It’s not really ownership if multiple people can “own” the same horse for purposes of a game.

Successful fantasy games create differential value

In most fantasy sports, differential value is created via draft – the players that are drafted earlier have greater value than those drafted later. In a draft format, luck has a big role – if there are, say, three clear-cut top picks, whoever gets the top 3 draft slots has a huge advantage. The innovation in response to that is the auction draft, where each team has a fixed pool of funds out of which to bid on players. Draft order doesn’t matter – if you want the top pick, you’ll pay for him but at the expense of filling out the rest of your roster.

Again, most fantasy racing games make little attempt to make one horse more “expensive” to own than another, largely because there is no scarcity in the first place

Successful fantasy games create interactions between players

The absolute best parts of fantasy football are, in order: the draft, the mid-week deals, the trash talk. Trying to improve your team is the essential element of the game, trying to win by acting as your own GM. A typical deal in FF might be a top wide-receiver and back-up running back for a top running back – the success or failure of a trade depends on the difference in opinion of value.

Have you ever traded/bought/sold/claimed a horse in a fantasy league? I think not.

Fantasy racing games simply do not capture the essential elements that make other fantasy sports compelling and fun. This is because they do not attempt to replicate, in any serious manner, the experience of owning and managing a racing stable. But here’s the great thing:

They could.

The Retro-Graded Stakes Formula

A considerable amount of racing chatter recently has been about the quality of certain graded stakes races and how their winners have been little more than (well-)paid workouts for the horses and their connections. I’m inclined to agree – top class races should attract many horses of a certain caliber but the graded stakes field size is, on average, one of the smallest in the sport. (Allowance races are not far behind – claiming and lower-level turf races attract the largest fields).

What’s at issue here is “black-type”: when a horse (or his/her progeny) go to sale, having placed in a graded-stakes race can mean a considerable premium to their auction price. This makes total sense – thousands of horses of all ages are sold each year and the bold, sometimes ALL-CAPS,  font in the sales catalog allows buyers to assess the potential class of the [yearling/two-year-old/mare/stud prospect] they are buying at a glance without reviewing a lifetime of past performances. It’s an elegant solution to a problem that existed before the Internet and electronic data was a thing, and retains some value to this day.

The American Graded Stakes Committee (AGSC) is the “be-all-and-end-all” determiner of what races get the vaunted Graded Stakes designation, those that can get the BOLD CAP font in a sales catalog. The Thoroughbred Owners and Breeders Association (TOBA) controls this designation, of which their policies can be found here. To their credit, the AGSC has been quite responsive to upgrading the designation of races that have shown considerable improvement in the quality of horses running in them over the years. The best example, given my familiarity with them, is the upgrade of the Arkansas Derby for 3 year olds to Grade 1 status and its preps (the Rebel and Southwest) to G2 and G3 status, after the likes of Smarty Jones, Afleet Alex and Curlin used the Oaklawn route to prep for later classic wins.

My main criticism of the AGSC is that, while they have been responsive to upgrades, they have been much less so to downgrading races that haven’t been as good. It’s a natural response for well-meaning decision-makers: demonstrable class deserves and upgrade, suspect class deserves just one more chance. That bias has produced what I would call class “creep” whose end result is too many graded stakes with too small fields and, frankly, too many horses earning graded black-type. The AGSC uses “gut feel” more than data to determine the top quality races, which has contributed to the bias.

The main trend driving this is the declining North American foal crop, which has shrunk from a high of 40,000 in 1990 to 25,000 this past year (Source). The number of Graded Stakes has remained steadily above 450 for the last seven years despite the falling foal crop and the number of races run in North America. This means its roughly 40% easier today to earn black-type than it was just a few years ago. The AGSC has not been responsive enough to these trends; the impact is that black-type means less and less.

The fix I propose leverage the unique power of the age in which we live – use the vast information collected about races, and the past and future performance of the horses that run in them, to determine black-type. More importantly, tie the total number of graded stakes to a reasonable estimate of the foal crops eligible for those races. Lastly, tie the earning of black-type from placing in a graded stakes not to the horse’s placing, but the number of contenders the placing horse beat to earn it. What results is what I call the Retro-Graded Stakes Formula. These are the guidelines I’d suggest:

  • In 2006, roughly 100,000 thoroughbreds (3 years of foal crops) would have been eligible for graded stakes eligibility, or roughly 1 GS for every 210 born (100K/475) . Let’s be generous and say that a GS win should be available for every 200 foals.
  • Black-type is especially valuable for fillies and mares, but their graded stakes representation is outsized compared to the open races for which they are eligible. If fillies and mares are eligible for all graded stakes, but colts, geldings, and horses are eligible for all, then gender-restricted graded stakes should represent just one third (33%) of all graded stakes – currently, 41% of Graded Stakes are gender-restricted.
  • Many graded stakes are age-restricted, so tying them to the eligible foal crop makes sense. For 2- and 3-yos in a foal crop of 24,000, that means just 120 graded races to split between the 2- and 3-year-old races, and only 40 for fillies and mares. Currently, there are 184.
  • Open company races, having a larger eligible foal crop, would get a majority of the graded stakes races. This aligns with the industry desire (supposedly) for keeping horses running at a later age.
  • Field size matters in a stakes race – it is easier to place in a 5-horse field than an 8-horse field, naturally. To earn black-type, require that a horse beat at least 60% of the field they are in. For a 4-horse race, only the winner earns black type. In a 5- to 7-horse race, top 2. Only in a field of 8 or more can an ITM guarantee black-type.
  • The total number of graded stakes would shrink to the foal crop of 3-4-5 year olds/200 (roughly 360, based on 2011-2013)  but distributing those more to open company races versus any kind of restriction. If there are 120 age-restricted races, there would be 240 without.

The above proposals are conditions that the AGSC could implement today. The biggest change, however, would be to use the past and future performances of race horses to determine the true class of a race. This would take some doing. The RGSA would assign a provisional class to a race before its run based on its current historical standing, determined by prior class of the horses in it. For example:

  • A race could be graded a PG[1,2,3], meaning a Provisional Grade 1 (2 or 3) based on the level of horses who have run in it, and their subsequent performance. Minimum purse sizes would be required – the AGSC gets this right.
  • After a suitable period of time, probably 3-6 months, the race would be graded RG[1,2,3] , again based on both the past and subsequent performance of its entries. The total number of RG races will be tied to the eligible foal crop for that race.
  • One revision to a races grade would be allowed should multiple horses from the race go on to greater things.
  • Ungraded stakes could get bumped to RG status (and future PG status) if multiple performers win subsequent RG contests.
  • Allowance level races with multiple past and future RG performers could get special “Key Race” status that could be noted in a catalog page.

I am not suggesting that the AGSC adopt these changes; though that might be ideal, it would be too radical a change. I’m saying that any group with data and sufficiently publicity could use the RGSF to challenge the status quo with regard to the class of sales horses. The AGSC has no competition – it’s time they had some.