No Substitute for Innovation - Part 2

In the first article I might have created the impression that there is very little innovation in the wagering sector, with specific reference to the racing industry. This is not entirely correct as many new things have been introduced to extract maximum value from the customer base and with a great deal of success.

Operators have limited their efforts to these types of innovations aimed solely at increasing turnover with the regrettable outcome of a neglect of long term capacity building for future growth. The predictable outcome has been tightening margins and a drop in profitability directly linked to the fight for market share in a declining industry. It also becomes a self fulfilling prophecy as vital funding has been withheld from racing for use in other more lucrative ventures.

The real lack of innovation is in the area of making racing more appealing to a new generation of players and this is one function that traditional operators have failed at dismally, and the main reason for racing's ageing population and declining fortunes. The perception is very much that racing is a dinosaur approaching extinction or at the very least losing its relevance as a bottom line performer.

Nothing can however be further from the mark as racing has large untapped potential as a serious money spinner given the advantages of quality content year round, a more differentiated outcome potential than most other forms of wagering and regulatory approval in multiple jurisdictions globally. DFS and sport has had a wonderful symbiotic and successful relationship and there is no reason why racing cannot take advantage of a similar approach as it shares the mantle as a skills based activity. The main difference is that racing lacks the large fan base that sport already has which is why innovation will be critical in reshaping a new value proposition for the sport.

Racing can be made fundamentally more entertaining and rewarding for players if this approach is replicated and innovative offerings in this area could be a catalyst for a highly profitable renaissance for the "Sport of Kings". Meaningful and sustainable growth of the customer base would not only be beneficial to individual operators but to the industry as a whole and would relieve the pressure on margins with long term benefits for everyone involved.

I have been following the creative efforts of one or two operators offering more entertaining contests with a great deal of interest and have no doubt that they are on the right track. These efforts still lack a few critical elements that will lead to large scale new interest in racing through an entirely new player proposition. We are on the verge of establishing a breakthrough for an important employment industry in dire need of innovation.