While the Kentucky Derby remains one of the most popular events on America’s sporting calendar, the sport of horse racing fights to remain a relevant part of the U.S. sporting landscape.
Last year, bettors wagered $11.27 billion at U.S. tracks. That was down 3.3% from 2023’s handle of $11.65 billion and the third consecutive year for a decline. At the same time, Kentucky Derby 150 produced yet another record handle, $210.7 million, including money wagered on the event at Kentucky horse betting apps.
In some ways, this is a two-pronged fight for the sport. Not only does it want to draw in younger adults, but the Sports of Kings is also trying to keep the fans that have lived and died with the sport for years.
A bourgeoning number of the latter group have grown tired of how a few computer-assisted wagering accounts have dominated the market. Many of those same individuals have jumped over to fixed-odds wagering that’s legal in nearly 40 states, including Kentucky sports betting operators.
Using New Media To Introduce Racing To New Fans
Churchill Downs has focused its efforts on attracting members of Gen Z and younger Millennials through social media. Last year, the track hosted podcasters Alix Earle and Alex Cooper for the Derby, and Earle is coming back this year.
“She is a fantastic horse racing enthusiast and has incredible reach,” Churchill Downs Inc. Vice President of Corporate Communications Tonya Abeln told BetKentucky.com. “We’ve partnered with various lifestyle influencers who help us connect to Next Gen. Our own Kentucky Derby social media platforms garner a great amount of engagement with a demographic who may only be casually acquainted with horse racing as a sport but are tuned in to the Kentucky Derby as a cultural moment.”
Abeln also noted Joshua Wiseman, a chef and content creator, is working with Churchill Downs to develop a menu for Derby parties.
“The enduring nature of the Run for the Roses is always about achieving a balance between our cherished traditions and innovating the experience to generate appeal for the next generation,” she added.
Churchill is not alone in trying to introduce the sport to a new audience.
Griffin Johnson, a TikTok creator with nearly 10 million followers, is part of the ownership group for Sandman, who is expected to be among the wagering favorites for Saturday’s first leg of the Triple Crown. Johnson’s feed has several videos of the Arkansas Derby winner on the track’s backside as the horse gets ready for the big race. Johnson’s TikTok page also includes a link to TwinSpires Kentucky, Churchill’s online wagering platform.
What Else Can Horse Racing Do?
While TikTok and influencers can help, racing can do more to gain new fans and keep existing ones. One way that can happen is by embracing a fixed-odds betting concept.
A handful of states have legal fixed-odds wagering for horse racing, with New Jersey being the most prominent market. However, Churchill Downs and other large racetrack operators oppose the expansion.
It’s easy to see why. Pari-mutuel wagering means there’s no risk for the track. The track takes a portion of each wager, in some cases upwards of 20% or more, and the rest goes into a pool to be divided by winning bettors. Neither a heavily bet favorite nor a massive underdog can cut into the track’s profitability.
But offering an exchange on the Kentucky Derby and other races would allow fans who want a fixed-odds option to get their horse at their price. It would also remove the risk of the track to suffer a loss. I'm not the first to call for such a product. Pat Cummings with the National Thoroughbred Alliance and Michele Fischer, the vice president for content services with Sports Information Service, have been banging the drum on this topic for years. Sports Information Service provides racing content to sportsbooks and racebooks worldwide.
Can A Betting Exchange Help Horse Racing?
There is, though, an alternative that could help the sport attract new bettors: A nationwide online exchange, like what Kalshi and Crypto.com established this year.
Whether you view operators like Kalshi as innovative disrupters or as companies skirting established gaming laws, they have made an impact in sports wagering. Exchanges have attracted hundreds of millions of dollars in contracts for both futures markets and single games or events. Even established sportsbooks have considered creating their own exchanges that could be federally regulated.
One such operator has already put up its own market on the Derby. That’s Polymarket, which is not available to bettors or traders in the U.S. after the CFTC levied a $1.4 million fine against it in January 2022 for operating without registering.
Offering an exchange on the Kentucky Derby and other races would allow fans who want a fixed-odds option to get their horse at their price. It would also remove the risk of the track to suffer a loss.
I’m also not a lawyer, but while the Wire Act has prevented state-licensed exchanges from comingling states where they are approved, federal law allows horse racing to do so. I’ll gladly defer to someone with a law license, but it would seem a national horse racing exchange would have fewer legal issues than one for other sports.
Exchanges also attract the demographic the sport is targeting. Data from Similarweb.com found that 43.5% of Kalshi users in March were between the ages of 18-34. Almost 19% were between 35-44.
It’s not a perfect option. Given that Churchill Downs has agreements with several sports betting operators in Kentucky and elsewhere, it might not be possible until one of their partners establishes one.
That said, horse racing doesn’t need a perfect solution. It just needs to try to show some willingness to be innovative on the betting side as it is on the social media side.
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USA Today Network photo by Matt Stone/The Courier Journal
