I have attended a number of racing conferences over the last couple of years and innovation has been a discussion point nearly every time. The industry is a bit like governments though as it talks a good fight but seldom, if ever, delivers on positive ideas discussed and considered, writes Leon Smuts.
Why is this happening when we know that racing is heading towards a cliff with its rapidly ageing customer base, which once crossed, will see earnings going into free fall as customer numbers dwindle towards zero, given the complete inability and concern to build longer term and future capacity?
Three things receive ample attention from operators and have delayed the inevitable to some extent. These are income diversification, cost containment and turnover initiatives through hybrid products and churn.
Not one of these targeted objectives address the main challenge though which is to generate sustainable customer growth and long term capacity building.
This last one will have a positive impact on all three current objectives, which is why seeking a true racing solution has to carry more weight in operator strategies…
That is, especially if they are serious about long term solutions for racing, not just their own performance.
Many betting operators globally are doing quite well, especially a few online operators, but this is frequently happening at the expense of others, mostly traditional operators responsible for putting on the show. This cannot be good for racing in the long run and will ultimately cause catastrophic failure of the racing divisions of a number of operators that will hurt the whole industry as it is very expensive to stage racing.
Rather than looking at ways to increase the pie everyone is just looking to secure their slice of it or to grow it with total disregard for other role players. Protectionist attitudes abound with lobbying for greater regulatory control, looking to further entrench established monopolies, seeking tax relief or a misguided sense of entitlement or ownership when new ideas are presented to industry decision makers.
A recent article in the USA highlights a big problem in our industry when it was claimed that Derby Wars, a company specialising in daily racing contests, were stealing “our” product. This is typical of betting operators unwilling to innovate or not willing to acknowledge new ideas as they often have a dismissive attitude when approached with creative ideas from new players or outsiders entering the market.
Rather than supporting these ideas, they dismiss or ignore them.
And often without even looking at what could be potentially game changing innovations.
When these concepts are then developed privately and do well, they cry foul and will try anything to either stop the new player from operating or make every effort to cash in on the idea. This is what happens when you have unscrupulous operators only wishing to milk every drop from the sport without investing in its future.
The economic reality is that you have to spend to make money but historic bad decisions inhibits good decision making which leads to an inability to make any positive decision as far as growing racing is concerned.
Until operators draft clear objectives to grow the racing customer book, not just turnover, no one will ever be accountable for non-performance in this most crucial of areas.
Without measuring and rewarding performance and punishing non-performance by putting annual targets into place this area of the business will never show positive results and racing will continue to slide down the order of importance. What isn’t measured will never happen by itself which makes the reality of the current approach absolutely incomprehensible.
Fantasy style offerings have done wonderful things for sport and sports betting and can do the same for racing, but in reverse as our sport does not have the optimal fan base to tap into. The right new offering will provide an opportunity to build a significant new fan base from which every operator and the industry will ultimately benefit from.
I have seen some racing fantasy offerings and although innovative and welcome, falls short of what is necessary to make racing attractive to a new generation of players. Current offerings will appeal to experienced players but completely lack the structure and novelty for mass new appeal. Two critical elements are missing in product development to make racing a lot more appealing to a more diverse audience.
Every player needs to be more competitive from an earlier stage of involvement if their initial and continued interest as well as their longer term involvement is to be secured.
Many more winners are also needed…
But this has to be done in a way which will not water down the overall appeal of the offering or the ability to create large and life changing pay outs, which appears to be an incompatible objective, but isn’t.
After approaching many operators, including our local operator, a recently submitted patent contains elements which we believe will open the door to a successful new acquisition approach for racing that will make the sport very attractive to a new generation, keen to compete and be socially involved.
Our new platform is capable of early breakeven and designed to offer a very profitable stand-alone racing offering that will appeal to both novice and experienced players. Our product has been designed to attract, retain and convert with strong emphasis on enjoyment, fairness, affordability, substantial monetary and non-financial reward as well as rapid skills development.
Ideally I would have preferred participation through established operators as my design involvement started because of a love for racing and a wish to contribute towards the reestablishment of racing as a mainstream activity. Current attitudes have regrettably made this a forlorn wish but we would still like to support the industry when the time comes.
Subject to the outcome of our patent application we are hopeful to launch our new product over the next 18 to 30 months.
It is time for racing to adapt or die as denial and apathy cannot go on for much longer before we will witness the demise of a great sport in dire need of an industry supported turnaround strategy.
