Our series considering US racing’s key questions concludes as Daniel Ross interviews Ed Martin, a senior regulatory figure in his role as president and CEO of the Association of Racing Commissioners International (ARCI)

As 2024 draws to a close, many within the industry are looking towards 2025 with a sense of trepidation, worried by the tremendous challenges facing the sport as it attempts to chart a course into something of a brave new and sometimes inhospitable world.

As to what this future could and should look like, the TRC has spoken to several key figures from various corners of the industry over the last few weeks. Our series signs off with Ed Martin, who gives a regulatory perspective.

Ed Martin (left) is president and CEO of the Association of Racing Commissioners International (ARCI), which he joined in 2005. He is also president for the Sports Betting Regulators Association and boasts prior stints as executive director of the New York State Racing and Wagering Board, and as press secretary for US Senator Alfonse D’Amato of New York.

 When it comes to the industry’s near-term future, Ed Martin shares a sobering prognosis focused squarely on the fiercely competitive marketplace for the wagering dollar, which provides the bread and butter of the sport’s coffers. Or, as Martin puts it: “The thing that keeps the whole industry’s engines running.”

In this regard, horse racing is “way behind the eight-ball,” Martin said. “The competitive environment has shifted and changed dramatically,” he added, pointing to the explosion in sports wagering. 

“Probably the biggest horse racing meeting is the University of Arizona Symposium every year,” he explained. “But that is dwarfed by any of these meetings around sports betting, which will blow your mind. Blow your mind! Just look at the [sports wagering] numbers. Just look at the way it has grown.”

As sports wagering has proliferated, horse racing has failed to adapt and expand its product to cater to a betting audience now spoiled for choice.

“If you don’t focus on what you need to do to be in a competitive environment, then all you’re doing is talking to yourself at a time when your audience may only be there on huge days, but not necessarily there every day,” said Martin. 

Lack of foresight

The consequence from this lack of foresight, Martin predicted, is ongoing shrinkage. More pointedly, if the costs of horse racing continue to rise and as revenues continue to shrink, the sport’s current stable of owners will start to peel off, attracted by other sister sports like Quarter Horse or Standardbred racing.

“Will owners look to other breeds as a way to stay in horse racing?” said Martin. “Will Thoroughbred horse racing actually become only the sport of kings? It wouldn’t surprise me.

“You have to be cognizant of what it costs to own and run a horse, and the costs of doing business,” he went on. “We’re just coming off a highly inflationary period in the US and across the world. It’s not a simple case of thinking that adding another layer of regulation will fix the problems in the sport.”

So what could fix these problems? Martin believes the industry’s primary funding approach, based on revenues from pari-mutuel wagering, is a good place to start.

“If we don’t start to adapt to this new competitive reality, we are majorly limiting ourselves,” he said. 

At the ARCI’s annual meeting last spring, Matt Cosgriff, director of retail wagering and customer analysis at BetMGM, sat on a panel on sports wagering. “He gave a very compelling presentation on horse racing’s long-term survival,” said Martin. 

New business model

“What he told us is we need to start thinking about a new business model, and don’t be entrapped by the current pari-mutuel model. I don’t think anyone on the business side of horse racing is seriously looking at that.”

What would a new business model uncoupled from pari-mutuel wagering potentially look like?

Martin floated the idea of a group of tracks forming a coalition under a unique regulatory and sports wagering umbrella. 

“If a track wished to lessen its regulatory costs, what’s to prevent a series of smaller tracks in a region from forming a circuit – and frankly the horsemen’s groups forming their own league, not with simulcasting but offering a product through sports wagering?” Martin speculated. 

“You’d still have to address issues of the perception of the industry being safe for horses, and that the people winning contests are not winning them through the use of illegal drugs.

“But some of the restrictions that stand in the way on the horse racing side now might not be applicable on the sports wagering side.”

Hungry for content

Under such a scheme, this coalition of tracks could offer all sorts of different wagers – or as Martin describes it, lots of different micro-bets. “Let me put it this way, the sports books have a tremendous amount of interest in horse racing because they are hungry for content and horse races are quick,” he said. 

“On the sports betting side, people are betting on whether the next pitch will be a strike or a ball,” he added. “You could bet on the four-horse to beat the seven-horse at the half-mile pole. You could create a spread that such and such a horse wins by a nose.”

Ultimately, he said, “the creativity would be left to the sports books”.

As an analogy, Martin turned to the way Broadway theaters operate. “You own the facility, the theater; then there’s the production company that comes in and puts on the show in your facility,” he said. 

“You make money. The production company figures out how to make money. And the people who work for the production company who are putting on the show are making money.

“If you can figure all that out for horse racing – and it would take some serious brain power to make that concept work – you may be able to save a lot of the horse racing industry.”

Such a concept would constitute a seismic break from the norm. Has Martin heard anyone discuss such an idea seriously? “I’ve floated this idea at ARCI meetings,” he said. “But the regulators aren’t the ones to do this. This is something for the tracks and the industry to tackle.”

What the idea represents, however, is the sort of revisionist thinking needed to secure horse racing’s place in a fast-evolving marketplace. “Saving this sport is going to need some long-term strategizing,” he said, “and it’s going to require serious thinking outside of the box.”

• Visit the ARCI website

Part 6: ‘We’ve got to figure out how to grow the pie – not fight over a shrinking pie’ – Boyd Browning (sales)

Part 5: ‘We haven’t made enough progress on Thoroughbred aftercare’ – Lucinda Lovitt (aftercare) 

Part 4: ‘When I look to the future of Thoroughbred racing, I’m very enthused’ – Corey Johnsen (track management)

Part 3: ‘What are the little guys supposed to do?’ – Tina Bond (trainers)

Part 2: ‘Greed is a bad word, but that’s kind of what it is’ – Craig Bernick (breeder)

Part 1: ‘Right now, there are way too many Grade 1 races’ – Marshall Gramm (owner)

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