The Modern Racing Landscape and the Racetrack Wagering Market: Components of Demand, Subsidies and Efficiency

Abstract:     
Horse racing is an important industry throughout much of the world, and gambling has been increasingly relied on to provide financial support for beleaguered state governments. Technology has changed the way track patrons bet, with the vast and increasing majority of total bets being made away from live racing. The menu of wagering options continues to grow with a wide variety of exotic bets, futures wagering markets, program betting, and on-line betting venues becoming more prevalent. We know a fair amount about the determinants of wagering volume, but our knowledge of the demand for wagering on these different types of bets within and across venues remains in its infancy. We review the available research on the components of wagering demand, the effect of government subsidies on wagering volume, and the efficiency of the betting market. We also describe several new issues that continue to affect the racing landscape.

Number of Pages in PDF File: 34

Keywords: racing, gambling, subsidies, efficiency

JEL Classification: L83, E62, G10, G19, H00

working papers series