Gambling on Growth: An Analysis of the Early Impact of Historical Horse Racing on Kentucky’s Thoroughbred Industry

With a continuous decline in on-track wagering on Thoroughbred racing, racetrack operators are exploring alternative revenue sources to fund purses and create better quality racing. Historical Horse Racing (HHR), which represents one of the most recent advancements in parimutuel wagering, has become a popular system used by many states to offset the live wagering decline. Proponents of HHR suggest that this alternative wagering option will benefit the live racing industry. Using data from Kentucky racetracks from 2002 – 2021, this study examines the relationship between HHR wagering and key industry metrics, such as purses, on-track wagering, sales prices, and foal crop. Both OLS and staggered difference-in-differences models are used to explore the initial effects of HHR on Thoroughbred racing in Kentucky. While HHR was introduced in Kentucky fairly recently, preliminary analysis suggests that HHR enhances purses but, to this point, has not influenced other key metrics