Never heard of Racinos? Well, as the word suggests are a combination of racetrack and casino which have been launched in the US and promise jobs and economic investments for the local areas where they are situated. They are expected to bring in millions of pounds in revenue for both racino owners and the government (with taxation).
Criticisms say though that the already struggling horse racing industry will not be artificially boosted by placing slot machines around the tracks and that eventually, the positive impact on the local areas will be minimal.
But will they work in the UK? Difficult to say as the situation of the horse racing industry here is very different from the other side of the pond. Many believe that in the UK horse racing has a long history that should be defended and having casinos facilities all around the tracks will distract from the main event just for the sake of making a higher margin.
‘I believe this is something that can work in the US where there are limited online gambling opportunities at the moment, but I am quite sceptical about the UK' said John Pentin Chief Editor of a top UK Casinos Comparison site. ‘Having said that, horse racing needs to find a solution concerning the new generations that are not as attached to the sport as in the past. If having casinos around the track can attract a younger audience then it might worth a limited try around the smaller meetings'.
In the UK this will also go against what the government is trying to do which is reducing the stake limits on fixed-odds betting terminals (FOBTs) that are considered to be the ‘crack cocaine' of gambling. Fixed-odds betting terminals are land-based gaming machines that at the moment can be found in bookmakers shops (maximum of four units per shop).
Those were introduced in 2002, and the player can choose from some casino games like roulette, blackjack, slots but also bingo and virtual sports (simulated horse and greyhound races). The punter can gamble at fixed odds. FOBTs are already at the moment in some racetracks and users can win up to £500 per hand.
They are very controversial as they are considered to be very addictive as they have a fast game and at the moment the maximum stake allowed is £100 in some of them. The government has decided to reduce the maximum stake from £100 to £2 initially from April 2019. The implementation was delayed in the latest Budget to October 2019, and many MPs are protesting against this decision.
So introducing Racinos in this current political climate doesn't seem something realistic with the government that is already being asked questions about problem gambling. It would be interested though to see how those will do in the US. In recent years New Mexico has launched racinos in 5 locations.
Other businesses are looking to get a license, and this is not surprising considering that racinos are permitted to: operate 600 slot machines which are likely to generate millions of pounds in revenue. The estimation is £40M per year in revenue.
‘It is not a surprise to see that slot operations of the racino are generating the majority of profits not just for horse racing owners but also for the government' said Izzy Trejo who is the CEO of the New Mexico Racing Commission that regulates the licensees. ‘Racing, however, will always be at the forefront of the decision. It is important to have a balance in the industry, and New Mexico already has five tracks which are already a lot for a single state.'
