PA embarks on development of marketing program for racing

By: Tom LaMarra

Posted: March 31, 2017

The Pennsylvania Horse Racing Commission March 29 signaled its desire for a two-pronged approach to marketing and promotion for horse racing involving a statewide branding effort as well as local outreach.

Under the 2016 horseracing reform law, 1% of the Race Horse Development Fund must go toward marketing and promotion of the industry. That currently amounts to roughly $2.4 million from the fund, which is fueled by a percentage of casino slot machine revenue.

The PHRC at its monthly meeting voted to make an offer to an individual or entity to develop a statewide marketing plan for Thoroughbred and Standardbred racing and breeding, but not before the Pennsylvania Equine Coalition—its members are four horsemen’s groups and two breeders’ associations—presented its own plan for use of the money.

The state’s six racetrack casinos, three Thoroughbred and three Standardbred, never have been members of the coalition, which generally fights to protect its share of the RHDF.

Kim Hankins, executive director of the Meadows Standardbred Owners Association who spoke on behalf of the coalition, told the PHRC the about $2.4 million comes from the horsemen and breeders via the RHDF, and therefore those groups should direct the marketing spend.

“Due to concerns of the coalition about a perceived lack of marketing by racetrack operators, we advocated using 1% of the RHDF to market the industry,” Hankins said. “We hope the commission takes into account our views on how the marketing money should be utilized.”

The coalition proposal would give the bulk of the $2.4 million—the figure will fluctuate year to year depending on slots revenue—to representatives of the horsemen and breeders and about $200,000 to the PHRC to promote the industry. The money would allocated to each group based on how purse money is paid to each track from the RHDF.

“The rationale is the horsemen and breeders better know how to promote and market to patrons as opposed to a statewide marketing firm,” Hankins told racing commissioners. “We know the local markets. It’s the best approach and most efficient way to emphasizes marketing concepts.”

“Each organization has different views and ideas on how to reach out to their audience,” said Pete Petersen, the lead spokesman for the coalition.

Brian Sanfratello, Executive Secretary of the Pennsylvania Horse Breeders Association, said the organization works with an established promotional firm on advertising he said elevated the Thoroughbred breeding industry in the state in 2016. He said marketing must be consistent, both in the message and the funding for it.

“Some promotion of racing and breeding should be coordinated on the state level, but the bulk of advertising should be done by our organizations,” Sanfratello said. “We can’t afford to have this money used in ways that aren’t beneficial to industry organizations. Do you really think you are qualified enough to make these decisions?”

The PHRC falls under the state Department of Agriculture. Secretary Russell Redding told the coalition he appreciates the submittal but believes a statewide strategy for marketing and branding of racing and breeding is necessary.

“There’s no talk of ‘brand’ here,” Redding said. “What’s the brand? There is a real issue of what is Pennsylvania’s brand. We need to address the topline needs of the state. We discussed how to approach this—there is a bundle of things we need to address.

“We’re missing the overarching piece. We want to make sure we have a really good strategy on how to market Pennsylvania racing.”

After the racetrack gaming program was launched in 2006, the Department of Agriculture launched an awareness and marketing program called TrackPack PA. The program lasted several years before funding became an issue within the department.

The PHRC voted to form a working group with representatives of horsemen’s groups, breeders’ associations and racetracks along with whoever fills the new marketing position for the commission. The group would be charged with reaching out to various stakeholders, including patrons, to get input on a strategy for the next fiscal year.

In the meantime, each of the six members of the coalition will each receive $150,000 for marketing and were told they must have detailed plans for promotions in the near term submitted to the PHRC in two weeks. The plans will be discussed at the April commission meeting.

“There are concerns about the brand and strategy for which the money would be used,” said PHRC member Sal DeBunda, President of the Pennsylvania Thoroughbred Horsemen’s Association. “The (regular) allocation will come after a brand and strategy is developed. This is intended to be a short-term solution until we can have a plan in place. It’s the fairest way right now to make a grant to each organization.”

It was noted the Pennsylvania Horsemen’s Benevolent and Protective Association and Pennsylvania Harness Horsemen’s Association would each receive only $150,000 even though they each represent two racetracks.

The marketing discussion came on the same day the commission heard a presentation on a Joint State Government Commission report authorized by the 2016 reform law to examine the racing and breeding industry and make recommendations for a strategy going forward. Yvonne Hursh, counsel for the JSGC and project manager for the racing study, said there are both positive and negative images associated with horse racing.

“You have to be very sensitive when marketing to appear and be extraordinarily virtuous,” Hursh said. “You have to make sure that when (people) look at the racing commission, they don’t have any bad thoughts about horse racing.”

Industry stakeholder groups addressed the PHRC late last year and early this year on the need for improved integrity in racing in Pennsylvania. They pushed for an out-of-competition testing program, and on March 29 commission staff said they hope to launch the program by May 1.

“I think this commission has taken giant steps on integrity issues in Pennsylvania,” DeBunda said. “It’s going to take some time but I think we’re on the right track, and I think marketing our integrity is important.”

(Photo by Tom LaMarra)