Horse racing set for a resurgence in the U.S.

America’s oldest horse racetrack is closing after running its last race on the final weekend of 2024. 

Freehold Raceway in New Jersey, co-owned by Penn Entertainment, tried for decades to land a casino but failed. Like many tracks around the nation, it grappled with declining attendance and revenue. It had been operating for more than 170 years.

“Unfortunately, the operations of the racetrack cannot continue under existing conditions, and we do not see a plausible way forward,” said Howard Bruno, the racetrack’s general manager, in a news release announcing the closure.

But industry insiders, investors and other enthusiasts believe horse racing in the United States could be poised for a resurgence — fueled by new investor interest, innovations in the sport and a boom in legalized online sports gambling. 

In 2023, the sport added more than $36 billion to the U.S. economy, supporting nearly half a million jobs, according to the American Horse Council. 

Horse-racing revenue comes from a variety of sources: tickets, hospitality, merchandise purchases at the track, licensing for TV or simulcast, sponsorships and gambling.  

Reliable estimates of global horse-racing revenues are hard to come by, experts say, in part because of the private nature of ownership and in part because of the wide variety of metrics used. Revenue estimates range from $44 billion to nearly 10 times that.

Multiple sources agree the sport could see compound annual growth of roughly 9% in the years ahead.

No catalyst for the sport’s growth is more crucial at the moment than the revenue that comes from gambling. 

The handle, or the amount of money wagered on horse races, funds the purses, or the prize money, awarded to winning horses. So does the casino-style gambling at facilities associated with race tracks.

For example, Resorts World New York City, which operates video lottery terminals, is contractually obligated to turn over 12% of its net win to the New York Racing Authority, or NYRA. Patrick McKenna, NYRA’s vice president for communications, said that currently amounts to about $120 million annually. Of that total, $60 million goes toward purses, $40 million goes to capital improvements, and $20 million funds operations.

When the size of the purse grows it attracts higher quality horses, and higher quality horses attract more interest in the sport.   

In 2022, $12 billion was wagered on horse races, marking a new record, according to an analysis by the New York Thoroughbred Horsemen’s Association, or NYTHA. The total purse money awarded that year also set a new record, at $1.25 billion.  

Growth in sportsbooks as well as the increased access…