Economic indicators lean towards owners

An economic indicator is a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities.

That’s the dictionary definition of an Economic Indicator and for the 2022 harness racing season in North America, the numbers tell a different story for the industry.

Despite a positive rise in in purses paid and in the number of race days held in the USA for 2022, the total wagering number was down -8.44% over 2021. While in Canada, which was shut down for a lot of 2020 and 2021 due to Covid restrictions or raced without spectators showed an increase in both wagering and purses paid of a dramatic +40% increase in both categories.

While the USA handles significantly more race days, purses and handle on average when compared to Canada, the economic indicators still point towards harness racing in a positive frame as the 2022 numbers in North America both in the USA and Canada are better in every category than before Covid struck in 2019.

We asked some of the sports leaders on how these numbers came about and received some great answers.

Below are the economic indicators on USA and Canada racing followed by the quotes from horse people on both sides of the boarder.

ECONOMIC INDICATORS ON U.S. RACES

CANADIAN ECONOMIC INDICATORS

Purses for pari-mutuel races in 2021 – $91,229,135
Purses for pari-mutuel races in 2022 – $128,511,162   +40.8%

Wagering on Canadian races in 2021 – $436,638,116
Wagering on Canadian races in 2022 – $608,707,099  +39.4%

PRE-COVID

Purses for pari-mutuel races in 2019 – $119,827,910
Wagering on Canadian races in 2019 – $491,483,087

ERIC CHERRY, prominent owner, breeder and co-founder of OnGait.com – “I would first look at the exchange rate on money as the Canadian dollar has not fared well against the American dollar these past few years and that could be a big factor. Right now, it’s at $1.38 compared to the USA dollar.

“The Canadian tracks, due to Covid, had to shut down and were slow to reopen whereas the tracks in the USA were opening as soon as they could, even with no spectators, so they were able to get all the Canadians who had no live racing, to wager on the USA tracks through simulcasting.

“Also look at it from the perspective of sports betting that is opening up in states and provinces throughout North America and in most cases, wagers are made in the same building as horse racing. Most people who bet sports, don’t bet horses. Many people who bet horses, also bet sports.

“As we talked about before, USA had the jump on Canada per handle and purses because of Covid. Now they are fresh again and Canada is doing very well. I think it’s a culmination of everything.”

CLAUDE LEVESQUE, horse owner and chairman of the Quebec Jockey Club – “We were very fortunate in 2022. Nearly every day of live racing at the Hippodrome 3R was a record total handle. But the majority of that handle was from simulcasting in the USA and not on track. The same was taking place and still is at other tracks in Canada, especially at Rideau Carleton.

“It is always great to see improvement in handle, but in Quebec we have but the one track at H3R and nine Off-Track-Betting sites and the handles there were not as significant a growth as simulcasting was. And we get a lot more profit from on-track handle and at our OTB sites than simulcasting.

“Covid also hurt us much more in Canada than in the USA. We had to shut down our tracks, which included our OTB’s in Quebec, then just racing with no spectators. That is why our numbers are at such a great increase in 2022 over 2021.

“Our numbers are still OK in Quebec and we will be opening a tenth OTB this season, so we are looking forward to our 2023 season and hopefully continued increases in handle and purses.”

MIKE TANNER, CEO for the U.S. Trotting Association says, “The numbers tell part of the tale. Purses, owing largely to funding derived from gaming sources, remain incredibly high.

“There’s never been a better time to own a Standardbred racehorse. The handle figure is a 4.37 percent increase over 2019 ($1,424,886,558), which, not coincidentally, was the last year before 2022 that Canada raced a full and complete harness racing schedule. The drop off in 2022 cannot and should not be ignored, but it’s important to consider the context.”

JAY HOCHSTETLER, owner, trainer, driver – “This is probably a topic that deserves an academic research paper rather than my deductions because I think it is so multi-faceted, but every part combines together to create the massive discrepancy in handle change. Canadian tracks programs are accessible for free to anyone while US tracks are behind paywalls. That’s just a sign of respect to the bettor lots of people are drawn to.

“Woodbine Mohawk is the main driver of Canadian handle and I believe they produce the best overall product between broadcast and on track in North America. Western Fair does a great job as well. They’ve taken a strong product and also worked to gain exposure with TVG. Sometimes increased distribution is all it takes when your product is appealing. They also seem to do a better job than the US of not racing on top of each as bad. Not everyone needs to bash heads against one another on Friday and Saturday.

“One interesting caveat for America is that the 2021 numbers are inflated by the lack of Ontario racing for big chunks of the winter and spring last year. US tracks really benefitted by being the only show in town for Canadian bettors at that time. Of course, that does not answer why Canada is significantly up over even their 2019 numbers.”

JASON SETTLEMOIR, COO, General Manger Meadowlands – “Here at The Meadowlands Racetrack, we averaged over $3 million in nightly handle in 2021, partially benefiting from an opportunity where Woodbine Mohawk missed many dates as they were recovering from the repercussions of the Covid-19 pandemic.

“Generally, in the United States, we see large numbers of tracks running from the spring to late fall. As a result, the product gets diluted with smaller fields making it less attractive to bettors. Bettors desire full fields and large pools, something few North American tracks can offer both harness and thoroughbred wise, outside of a handful of us.

“The betting in 2022 was still very solid overall on our live product, but obviously not the same as 2021. At The Meadowlands we are still the industry leader in nightly average handle on the harness side both north and south of the border. As we continue to navigate through rough seas wreaking havoc on our economy, we will continue to present the highest of quality, integrity-driven product we can with the hopeful support of the industry from owners, trainers and drivers.”

“The proof of whether or not racing can continue its upward swing in North America and if the USA can increase handle in 2023 will wait to be seen this year.”

Harnesslink thanks our five contributors for their comment.

by Steve Wolf, for Harnesslink