Horse racing continues to face a substantial decline in its third successive year, despite all efforts to bring back its appeal, especially by others in the gaming sector, such as casinos. Horse race wagering was at around $11.26 billion last year, a 3.35% decrease from the year before.

The horse racing sector in the United States continues to grapple with a downturn as 2024 marked the third consecutive year of declining parimutuel wagering. Despite ongoing efforts by casinos and other kinds of gaming to support the struggling sector, the numbers tell a sobering story of a sport that has yet to regain its footing.

A declining trend

Betting on Thoroughbred races, the most prominent form of horse racing in the US, saw another year of decline. According to Equibase, the industry's official database, and the Paulick Report, parimutuel wagering on Thoroughbred races totaled around $11.26 billion in 2024. This represents a 3.35% decrease from the $11.65 billion recorded in 2023.

Thoroughbred horse racing, which is synonymous with marquee events like the Triple Crown races - the Kentucky Derby, Belmont Stakes, and Preakness Stakes - alongside the Breeders' Cup Classic and the Travers Stakes, continues to face headwinds. The sport's peak wagering year came in 2003, when bets exceeded $15.1 billion, equivalent to $25.7 billion when adjusted for inflation.

A challenging December 2024 capped what Ray Paulick described as "the worst year for the industry since 2020." That year, the COVID-19 pandemic shuttered businesses across the country, significantly impacting horse racing. In 2024, race days fell by 2.4% to just 3,787, while the total number of races declined by 2.8% to only 30,852.

Gaming to the rescue

To their credit, several states with thriving casino industries have sought to use gaming revenues to prop up horse racing. In Pennsylvania, for instance, casinos have funneled more than $4 billion into horsemen's subsidies since 2004, when the state's first slot machines went live. Similarly, Nebraska is attempting to revitalize its horse racing industry by allowing racetrack casinos.

Following a 2020 statewide referendum, Nebraska racetracks began integrating slot machines, table games, and sports betting. While the majority of the state's tax revenue from these activities is earmarked for property tax relief, the hope is that the casino additions will attract patrons back to racetracks. Some casinos are even building new racecourses and grandstands as part of their resort expansions.

Virginia has also embraced innovative gaming solutions. Historical horse racing or HHR machines, legalized in 2018, have breathed new life into the Colonial Downs Racetrack. These terminals, which resemble slots, enable parimutuel wagering and have generated over $4 billion annually. States like Alabama and Kentucky have followed Virginia's lead, incorporating HHR machines where commercial casinos are absent.

While these efforts have slightly boosted horse racing purses nationwide - reaching over $1.3 billion in 2024, a modest half-percent increase - Equibase data suggests that casino patrons are not transitioning into horse racing bettors. Additionally, scandals such as those involving high-profile trainer Bob Baffert have further tarnished the industry's image.

A storied past, an uncertain future

One of the most significant blows to the horse racing industry came with the closure of the Freehold Raceway in New Jersey on December 28, 2024. Widely regarded as the oldest horse racetrack in the United States, Freehold's history dates back to the 1830s. Harness racing became its defining feature in 1854.

The track's joint owners, Greenwood Gaming and Entertainment and Penn Entertainment, made the difficult decision to shutter operations. Penn Entertainment, originally a horse racing firm, continues to manage the Penn National Race Course and operates four casinos in Pennsylvania. However, even with such storied connections, Freehold's closure is emblematic of the challenges facing the industry.

The future of horse racing in the US

As horse racing battles declining interest and wagering, the industry's future hinges on its ability to adapt and innovate. Casinos and alternative gaming solutions provide temporary lifelines, but the sport needs broader strategies to attract a new generation of enthusiasts. Whether through digital platforms, fan engagement, or enhanced integrity measures, the challenge is clear: horse racing must evolve to survive.