Two weeks ago, Microsoft announced the launch of its “Open Data Campaign,” in their words, “to help address the looming ‘data divide’ and help organizations of all sizes to realize the benefits of data and the new technologies it powers.
“We believe everyone can benefit from opening, sharing and collaborating around data to make better decisions, improve efficiency and even help tackle some of the world’s most pressing societal challenges.”
Now, it is obvious that it is in Microsoft corporate’s interests to convince others of this, but at its heart, this is a line in the sand. Microsoft is asking the world to embrace more open data in order to create a better society.
This is all about the benefits to our greater business, not just in the present, but for the future. We believe racing would enjoy greater participation from wagering customers by offering free, basic past performances, and free, raw data feeds for analysis by those considering investing in racing’s wagering markets if such data were readily available. Other benefits are likely too.
This can also be about the welfare of horses, about improving our world’s understanding of horses and the meticulous efforts to breed even better, stronger future generations. Be it heart-rate monitoring, recovery rates, stride length, morning workout timing and much, much more, our sport is so desperately in need of investment to uplift its technological base to a modern level. This should help customer confidence, owner participation and more.
The “data divide” Microsoft references is, in horse racing, much more like a data canyon, with a monumental gap between our sport and not just the rest of the sporting world, but the business world too. Racing is ripe for investment, provided we can meet other challenges too – proper pricing, bolstered integrity measures, modern marketing and so much more. Our issues cannot be boiled down to prioritize only one topic above any other – it needs concurrent improvement.
Horse racing is still big business, and if our future is to look better than our overall past and present, then meaningful refurbishment must commence. Churchill Downs Incorporated’s annual report, also out about two weeks ago, offers insight to the financials of operating a racing and wagering business in an industry that is otherwise fairly opaque.
CDI’s online wagering business generated $290 million in revenue from 2019, led predominantly by TwinSpires, whose live and simulcast racing operations yielded $277 million of that net revenue figure. Operating expenses for its overall online wagering business were $206 million, with CDI reporting that their overall online wagering business’s adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) came in at $66.3 million.
Sitting on a base of roughly $11 billion in annual wagering, where is racing’s greater plan to get to $15-20 billion in five years, $40-50 billion in 10 years? The impact to prize money is clear – purses should be at $1.5 billion in five years and $3-4 billion in 10. Not only does such a plan not exist at the moment, but one has never existed.
Despite many negative metrics that exist and have been oft recited in this weekly feature, there is hope for racing, but we need significant renovations to many different elements of the industry, combined with significant investment. The impetus to change amongst many of the sport’s optional financial participants – owners– is growing. The desire to benefit from change amongst the sport’s other major segment of optional financial participants – horseplayers – has never been greater.
It should make for an interesting future.