An extensive report prepared for the Iowa Racing and Gaming Commission offers numerous ideas on a path forward for the state's racing and breeding industry, including some marketing ideas focused on building local interest that could be useful beyond the Hawkeye State.
The commission accepted the 281-page report Aug. 12, 2024, from Racing, Gaming & Entertainment, a consulting firm led by former University of Arizona Race Track Industry Program director Doug Reed, who served in that role for more than 20 years and has been consulting in the racing and gaming sectors for more than 25 years.
Prairie Meadows vice president of racing Derron Heldt said Feb. 18 that industry players throughout the state have been meeting regularly to consider ideas and build consensus on recommendations offered throughout the report, with a goal of putting some plans in place for the 2026 racing season.
Ideas that caught my eye included building local interest in wagering on the races through increased winning payouts for on-track and in-state patrons and leaning into signature race days. The thought is this can generate more money for purses and also bring in new people who may eventually be interested in breeding or owning Thoroughbreds.
Betting races is a tough game and the report notes that in recent years off-site handicappers have enjoyed more success than on-site bettors. As racing is a pari-mutuel game, such a dynamic results in on-site bettors seeing reduced winnings because those off-site horseplayers are enjoying more success. The report recommends a reduced takeout (amount of a betting pool retained largely by the track host and horsemen in the form of purse money) for on-track bettors that will provide them a better return on win, place, and show wagers.
"The re-positioning will focus on the uniqueness of racing as a competition against other players (not the house) and as a game of skill," the report reads. "It will also provide the live racing customer with reduced takeout and larger payoffs (while emphasizing the wagers that are easier to cash tickets with), which has been proven in studies to have a positive effect on churn—the re-wagering of those winning dollars."
The report takes things a step further by saying that in-state bettors also should be eligible for the WPS bonus. It notes that plans would have to be made with advance-deposit wagering providers to implement that bonus. It would require advertising and promotion of the added payouts, which would serve as an effort to build local, loyal interest in the day-to-day racing.
"If Iowa is the first track to implement this strategy, we think the racing product will benefit from some national exposure in the media which may make customers take notice of the product from this media," the report said, noting that Oaklawn Park has launched a similar effort for show wagering by on-track bettors.
While the report recommends this approach primarily, it said a second approach, which also could be incorporated as part of the first, is to take the "minor league baseball" approach of promoting fun and excitement. It said that secondary approach would include an admission charge for patrons.
"The focus would be on fun and entertainment between races using many Iowa-appropriate ideas," the report reads. "Prairie Meadows on our brief visit does seem to be doing some of this on a small scale but the number of ideas, events, and fun they could generate could be expanded."
The report noted that the first approach makes more sense as it's more focused on the core product of horse racing.
The report also suggested building on the track's signature days, especially with the local audience. It noted that Prairie Meadows already is successful with its signature race days as two festival days in July and closing day each enjoy pari-mutuel handle of more than $1 million.
"It is also important that all stakeholders be involved in the marketing and participate in the signature days," the report said. "Not only can live racing be promoted but also the entire horse racing and breeding industry should be promoted on each of those days. Horsemen can provide information, talks, and tours as part of the education process of owning and breeding horses in Iowa. Combining the various efforts already done by the various groups into one coordinated effort can only make the days more impactful."
Kudos to Iowa for considering a better path forward; realizing that positive changes aren't going to just randomly occur. As the report notes, "We do believe that if changes are not made, the Iowa racing and breeding industry cannot make positive gains. Without change there is little reason to expect different results and to create improvements to the product that will help both the racing and breeding in Iowa."
As industry leaders meet this year to craft that strategy, the report calls on a willingness to embrace new ideas and suggests a neutral facilitator may be needed. Reed and the report's writers believe the status quo will ensure failure.
"We are confident that with stakeholder cooperation and open-mindedness the core recommendations, while possibly needing to be slightly modified to achieve consensus, will help sustain and improve racing and breeding in Iowa. To not make the effort will continue to put the industry in a long-term position of producing a below-average product and could in future years pose a threat to the industry. We have seen in other states where the industry funds become a target to be considered for other public policy needs. In fact, decoupling of gaming funds has occurred already in places like Rhode Island, Florida (except Thoroughbreds—and as of 2025 a Florida bill would allow decoupling of Thoroughbred licenses from casinos) and even in Iowa with the Greyhounds."
