Blogs > Liberty and Power > Betting on Racing, at Least

Jun 4, 2004 4:31 pm

Betting on Racing, at Least

As Smarty Jones heads toward his date with destiny this weekend at Belmont Park in New York numerous sportswriters and pundits are bemoaning the"death" of horseracing in America. While it's clear that horseracing is not as popular as it once was, most of the arguments one hears about what's wrong with the sport have no grounding in reality.

See for example this piece in The New Republic on line. Many observers of this business falsely equate declines in attendance with impending doom, but this misses the point. Horseracing, like boxing before it, has an image problem that results from the lack of a central authority and a perception that gambling taints the sport (notice that most fights are held in Atlantic City or Las Vegas? Probably not because it's likely you aren't watching). And both sports do not have the fan bases they once did.

But sportswriters are missing something that's very important in both sports - money. There's still lots of it to go around. Note in the New Republic piece that fees for the breeding rights to Smarty Jones, should he win on Saturday, will be worth between 50 and 60 million. Professional soccer and tennis would give their right arms for money and fame worth that. These farm owners aren't morons. A lot of rich people want to play the horse game, and as long as they do, horseracing in this country will be fine.

Furthermore part of the problem with those attendance figures is that government has distorted the gambling market in this country. By sanctioning certain types of gambling (i.e. riverboat casinos) and not others (legal sports books) it has given the gambling consumer one choice - casinos. It doesn't allow the horsetracks to compete fairly like they could without government regulation of gambling.

If journalists could only understand that prices send signals and markets work we'd all be better off. Folks less familiar with markets would get better news and I'd be less frustrated reading the news. Pareto improvement in my dreams.

As for Smarty Jones, I'm just a casual horse fan, and I think Andrew Beyer is one of the better horseracing writers in America. He's picking Smarty Jones; of course he's a notoriously bad bettor in Triple Crown races. Rock Hard Ten, should he win, will certainly pay out better for the brave of heart. I'll be pulling for Smarty, but betting Rock Hard.

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Pat Lynch - 6/5/2004


I'd agree that it's an open question what the future of racing will look like IF the future hobbyists outnumber the investors. But that I'd argue that the people who are willing to pay for Smarty Jones are betting on a rich future for the sport, and have more expertise in this area then I do. Prices again send signals.

I would ask concerning gambling whether or not we can assume that all sports in the UK, for example, are hurt by a corrosive influence because there is legal gambling on virtually all of it? Probably not. The problem, I'd argue, is that by making the gambling illegal they've allowed less savory folks in the business.

Good comments. I appreciate your thoughts.


Jonathan Dresner - 6/4/2004

The money which is supposedly lying in wait for Smarty Jones isn't there because he's a good horse. It's there because it's believed that horseracing has a future. If the hobbyists, who race for fun, outnumber the investors, who race for money, then fine. But if horseracing is indeed in decline, then it seems likely that the next generation of hobbyists will be smaller, and stud fees lower, etc.

And calling it a "perception" of taint is downplaying the corrosive influence of money on competition by at least an order of magnitude.