Can you remember when last you visited a CD store? Nor can we, because they’ve all but disappeared in the last six, seven-odd years. Digital technology and the habits of this youthful generation dictate that we don’t need compact disks to listen to music, because it’s all on our phones now, at our fingertips and easy to access with an app click and a few swipes.
Generally speaking, it has taken racing authorities and entrepreneurs longer to come to grips with the digital revolution than the leaders of other industries. They’ve been talking about major changes needed to tap into youthful markets for ages, but, barring lengthy written essays, debates and expensive conferences, not much has been done to promote racing to fresh markets and to make it digitally strong so it can appeal to the very technologically advanced young individuals who hold much of the cash today.
In Australia, where they tapped into the established horse-loving culture early, racing is booming and Racing Victoria’s boss Giles Thompson announced a fortnight ago: “Digital turnover accounted for 86.5 per cent of all turnover in H1 2020/21 – up from 74.9 per cent in the first half last season.
“Those who believe retail is dead is calling that way too soon. I think retail has a really good future. I think it’s really important we support Tabcorp as they continue to explore what they call digital in retail. You bring the retail environment alive with the digital experience.”
In the United States, sports betting is now active and operational in 10 states, and on the legislative docket of more than a dozen more. Given how quickly the opportunity opened up, state legislators and regulators found a need to identify proven, trustworthy options to bring a product to market that players, including horse racing enthusiasts, were eager to engage with.
IGT’s PlaySports platform accepted the first sports bets in the country outside of Nevada when it became operational at the Borgata Hotel Casino and Spa in Atlantic City, New Jersey, in June 2018. Today, PlaySports is live in seven states: The IGT system has handled over $3.5 billion in wagers. Between retail, kiosk, and mobile channels, IGT now handles about 60% of the sports betting business in the U.S.
As important as the system is, making it more convenient and efficient for players to consider wagers and place bets is equally vital. IGT’s PlaySports self-service sports betting kiosk, gives players control over their bets in a compact footprint, while giving the facility the same level of oversight as a traditional over-the-counter transaction. IGT has installed over 125 PlaySports kiosks to date in New Jersey, Pennsylvania, Rhode Island, New York, and Mississippi.
IGT’s Neal Atkinson commented in a 2019 study: “the introduction of sports betting had a significant impact in bringing in a younger demographic, including an estimated 70% boost in revenue from players in the 21-32 age range. Just as important, sports betting did not cannibalize from the other gaming options; table games at Pearl River have seen a 6% month-over-month increase since the introduction of sports betting.”
By implication this streamlined, exciting digital sports betting experience can also bring youthful sports bettors to horseracing, much in search of young blood.
In Las Vegas there are several massive betting halls with leather seating, private betting boxes a big-screen TV’s and dozens of operator windows – all still popular, but the worldwide trend now seems to bet toward smaller, kiosk-type betting shops where bettors can walk in and do all their transactions on a fast, self-operated terminal, with the traditional counter operators no longer required.
Racing Post reported via Lee Mottershead recently that traditional betting shops in the UK had dropped in turnover every year since 2014 (Gambling Commission data). Over-the-counter turnover in British shops had dropped in similar fashion in the same period, the total of £7.6 billion from April 2019 to March 2020.
Betfred’s Fred Done (1,470 shops) told Mottershead: “If we carry on as we are I think we’ll go the same way as the dinosaurs and betting shops will die. We need to attract more young people. The average age of betting shop punters is 50-plus. When those people drop off the perch they aren’t being replaced.
William Woodhams, the chief executive of bookmaker Fitzdares, which does not have shops, said: “Having a small bookie in a pub will revolutionise the industry and give pubs a great new lease of life. The vast majority of bookies will go the way of the phone shop.
“Technology, rates, rent and heightened compliance have frankly killed the need for physical shops, and the cashless society, sped up by Covid, is months, not years, away. That said, for at least ten years there will be a hardcore of bookies left, split into two distinct offerings.
“Firstly, there will be those bookies that service an older, low-income, tech-stubborn punter. These will linger until their audience dies out, unless compliance kills them. Secondly, you will have the sports bar with betting, an experience-driven location that makes watching sport social, safe and fun. We have trailed this with the Fitzdares Club and it works really well.
“There is a third option, the sort of alcohol-licensed bookie-bars you see in France or within hugely successful TAB pubs in Australia. Having a small bookie in a pub will revolutionise the industry and give pubs a great new lease of life. A village pub could triple its earnings.”
Warwick Bartlett, chief executive of Global Betting and Gaming Consultants. “The betting shop of the future will be fully digitised, located off the main shopping area, about 5,000 square feet with parking and will provide fast food and beverages. It will have a video wall offering a huge menu of sports to bet on, with odds displayed. A tablet could be used from your seat to either bet, look at form or order drinks and food.
“The job of betting shop managers will be to entertain and attend to customers’ needs. They will be located front of house, like the maitre d’hotel in a restaurant. The betting shop needs to be a place where people want to go to socialise, drink, eat, bet and enjoy the company of others. It has to draw the customer through more and better facilities. It has to create an experience so compelling that it calls the customer back time and time again.”
What we are likely to see more of in future, especially in places like South Africa where the industry is in dire need of cost-effective changes aimed at a new, incoming crowd, are shops based on the model about to be employed in Ireland. When Ireland’s betting shops reopen after lockdown, Colm Finlay expects to be trading from two BetXS sites, both powered by his Orchadia Systems software.
The shops will have no staff inside them, as was the case before business was halted by the coronavirus. Finlay said: ‘In Ireland it costs on average €110,000 per year to staff a shop,” says Finlay. “If you remove that you have a much more competitive shop. I’m therefore trying to deconstruct the costs and make shops more agile.
“Betting shops are beautifully positioned to reap the full economic harvest of automation. Unlike most other shops, there is no carriage of goods. If I was automating a grocery store, I would still have to get the bacon, cheese and milk on to the shelves. With betting shops, everything, including content, comes through the pipes and terminals.
“I say to bookmakers and racing stakeholders that they shouldn’t be looking at the closure of shops with impending doom. There is a solution and they can have hope again. This new way of running betting shops can work.
Finlay adds: “Betting shops are the gateway through which people start engaging with racing. In a town whose betting shop has closed, the young people are not engaging with racing. The betting shop is almost a mini wi-fi router for racing in a town.
“My view is that these new automated shops should have media rights deals on a revenue-share basis. The one-size-fits-all subscription model of €47,000 per year is destroying racing. A massive Paddy Power shop in Dublin city centre is not the same as a small country village shop but both have to pay the same fixed fee.
“In return for a different approach we can assure there will be some media rights payments, whereas a closed shop pays nothing. We can also give back clear and accurate betting data.”
Alan Pepperell, B2B retail director for the Spotlight Sports Group, parent company of the Racing Post, noted: “Self-service will become an increasing theme in retail, both through content on interactive digital BSDs and through bet placement on SSBTs.
“The role of shop staff is also changing. The days of manual settlement are over and the role of betting shop employees will change into spending more time on the shop floor being experts on the products. Customer engagement will be ever more important. Customer service is key. You will need to have people working in the shops who really are interested in the punters and the racing.” -International Racing Club.