Racing Technology Lags

The rapid development of communication technologies coupled with competition from other sports and entertainment options threaten to leave horse racing in the dust unless the industry creates innovation with new investments, cautioned several key speakers at the Sixth Racing & Betting Business forum in Paris on Oct. 4 – reports TDN’s MICHELE MACDONALD.

Philippe Germond, chief executive of France’s PMU betting operation – one of the event sponsors along with the European Pari-Mutuel Association and the International Federation of Horseracing Authorities – said the rise of sports betting in many parts of the world continues to drain customers from racing. Other speakers noted that racing often does not keep pace with other sports in marketing and presentation through media.

“Due to the economic environment, most of us are facing a decline in horse race betting. The only way to react is through innovation and investment,” Germond warned the approximately 150 attendees from 27 nations in a message that was similar to the one he delivered at this event in 2012. Rian du Plessis, group chief executive of Phumelela Gaming and Leisure in South Africa, concurred with strong words.

“For us to be around in 10 years’ time, we have to innovate, diversify, re-invigorate [fans] and find new customers,” du Plessis said.

Much of the forum was devoted to industry executives and consultants from Facebook, Twitter and online gaming operations providing their views of how best to accomplish those overarching goals.

Drew Sheinman, Breeders’ Cup Ltd. chief marketing officer, delivered the breaking news that Breeders’ Cup is joining with NBC Sports to offer a major new online game that will award a $1-million prize to the fan who can correctly predict the top 10 finishers of this year’s GI Breeders’ Cup Classic. Dubbed the ‘Million Dollar Finish,’ the game will be heavily marketed.

“It’s a very simple concept to reach a broader audience and get fans excited about horse racing,” Sheinman said. “NBC will be promoting this once we announce it. We’re really excited about this because I think it’s going to capture the imagination of causal fans. “It’s going to be exciting, it’s going to be compelling, it’s going to be of great interest to the casual fan,” he continued. “Certainly core fans can be involved as well. There’s going to be a lot of handicapping around the chance to win $1 million, but [attracting new and casual fans is] really the primary objective.”

Sheinman, previously involved with marketing of diverse sporting and entertainment interests from Coca-Cola to the New York Mets, said he was recruited to his Breeders’ Cup position to be a “change agent” and previously had no background in horse racing. Looking forward to the upcoming 30th anniversary of the Breeders’ Cup, he said the organization has Avery aggressive plans for world expansion of our brand.”

When asked after his presentation to elaborate on that initiative, he said “the plans still are very much in the early stages of thinking, not execution,” but added that “in a very authentic way, the Breeders’ Cup has a leadership position” in the global sport by virtue of the races it conducts and with which it is affiliated around the world “without any marketing efforts.”

A large part of the forum was devoted to social media and networking strategies and new technologies for wagering.  John Hartig, Daily Racing Form chief executive officer, said most of his energies since taking the helm about four years ago have been focused on a “cultural shift” to transform the publication from a newspaper to a digital business. Today, he said he ties bonus compensation for editorial staffers to “audience growth” primarily through social media.

DRF reporters have been encouraged to use Twitter to relay information at live events with the goal of stimulating wagering through the DRF‘s advance deposit system, and the DRF continues to develop and promote handicapping competitions with the same goal, Hartig said.

“I don’t have any analytics showing social media drive wagering, but it is a big part of our business plan,” he stated.

Julien Codorniou, director of gaming platform partnerships for Facebook in the European, Middle Eastern and African markets, declared that Facebook “is the largest gaming platform in the world” with 260 million people playing games through Facebook every month.

“The Facebook news feed is made for betting stories,” he said, adding that wagering is becoming a “priority” for the social medium’s ongoing growth.

“And we believe we can help you fix this industry’s biggest problem,” Cordoniou said, identifying that challenge for horse racing as “discovery and engagement” of new and casual fans.

As mobile telephone usage skyrockets, Facebook is a primary beneficiary. He noted that 23% of consumers’ time on mobile phones is devoted to Facebook usage, with the average user opening Facebook 14 times a day on their mobile phone; more Facebook users now utilize their phones than they do standard Internet browsers.

Benjamin Ampen, Twitter’s London-based manager of new markets in Europe, pitched that medium as the best way to maximize the chances of news of promotions going viral around the globe. The immediacy of Twitter” will enable you to put the right content in front of the right people,” he said.

Globally, people exposed to tweets about betting are much more likely not only to visit betting websites but also to open a betting account and deposit funds for wagering, Ampen said.

The Irish-based bookmakers Paddy Power utilize both social media and a sharp-edged advertising program to reach punters in unique ways, reported Dan Thomson, head of retail for the organization in the United Kingdom. Paddy Power has grown by about 40 betting shops a year in the UK over the last four years to a total of 232 retail outlets.

“We see ourselves very much as a challenger brand with a unique personality, irreverence, mischief and fun”, Thomson said, describing Paddy Power’s recent stunt campaign billed as “right behind gay footballers,” which was developed to gain attention following a poll showing that no major soccer players identified themselves as gay. The campaign generated 72,000 tweets in one week and featured popular giveaways of rainbow-colored athletic shoe laces.

In addition to generating attention in such creative ways, Paddy Power also offers unique betting opportunities, such as a current promotion giving enhanced show prices for the mounts of National Hunt jockey Tony McCoy. These types of promotions are expensive, yet typically tend to generate more overall revenues, Thomson said, while at the same time building up the Paddy Power brand.

New technology also was emphasized at the forum, with Paul Lee, Deloitte’s head of global research for technology, media and telecommunications, noting that many sports have upgraded television coverage to ultra high definition,  making them “more compelling to viewers.”

“I don’t think, being from the outside, that horse racing has kept up,” Lee observed.

Riko Luiking, chief executive of the German Tote, said racing organizations have been busy improving wagering technologies including betting applications, with mobile apps now generating higher average wagering and more wagering overall than web betting.

Visionary concepts including Google glass, which would allow a racing fan to obtain past performance information about horses while they circle the paddock as well as providing immediate photographic capabilities, might be the way of the future, although Luiking opined that an augmented reality application is perhaps more realistic. With such an application, a fan could point his or her device at horse’s saddle towel and immediately receive that runner’s past performance and other details, making racing “much more fun for young people.”

Nate Simon, president of Louisville-based United Tote, related how his company has developed its mobile wagering application and how a primary benefit is reduced costs to racetracks, which no longer have to keep as many betting terminals or associated technicians in place.

Simon also suggested that horse racing should follow the example of ultimate fighting by developing reality television shows focused on the sport and its participants to generate interest worldwide.

Germond revealed that the PMU, which is one of the world’s biggest operators  of betting on racing, has what he called ambitious plans to move into the future that include:

  • More acquisition and review of customer habits as programs are developed to attract new bettors both old and young and those who are educated fans along with those who are new to the sport;
  •  The development of stronger customer relationships through social media and networking, including loyalty programs targeting the up to 90% of customers who are from the retail betting market rather than sophisticated punters;
  •  Integration of technologies in the retail other sides of the market, and;
  • The evolution of the organization’s workforce.

In closing the forum, du Plessis said that the scope and depth of the initiatives racing must take to move forward seem “daunting.” However, “it sounds to me like many of the participants here have made quite a lot of progress,” he concluded.

–          Michele MacDonald, for TDN, 5 Oct 2013 in Paris

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