After more than 170 years of operation, Freehold Raceway, America’s oldest racetrack, has held its last race. The New Jersey track, owned by Penn Entertainment, officially closed its doors on the last weekend of 2024, ending an era marked by declining attendance, shrinking revenues and failed attempts to obtain a license to the casino.
“Unfortunately, track operations cannot continue under current conditions, and we see no plausible way forward,” Howard Bruno, the track’s general manager, said in a statement announcing the closure.
While Freehold’s closure reflects the challenges facing horse racing in the United States, industry insiders remain optimistic about the sport’s future. New investor interest, technological innovations and the surge in legalized online gambling are fueling hopes of a revival of the age-old tradition.
An evolving landscape for horse racing
According to the American Horse Council, horse racing contributed more than $36 billion to the U.S. economy in 2023, supporting nearly half a million jobs. Revenue streams include ticket sales, trackside hospitality, sponsorships, merchandise, broadcast rights and, most importantly, gambling.
The handle, or the total amount bet on races, is a determining factor in the economics of sport. Betting funds purses awarded to winning horses, which in turn attracts higher-quality competitors and generates greater interest among fans. In 2022, U.S. horse racing saw $12 billion in bets placed on races, setting a new record. That same year, total money in the stock market also reached an all-time high of $1.25 billion.
This growth is largely linked to the expansion of legal online sports betting. Platforms like FanDuel and DraftKings have introduced horse racing to a younger, tech-savvy audience, while partnerships with iconic events like the Kentucky Derby have helped raise the sport’s profile. In 2024, FanDuel reported that betting activity on Derby Day matched the volume typically seen for the Super Bowl, underscoring the potential for continued growth.
The Kentucky Derby: a model for the future
The Kentucky Derby remains the crown jewel of American horse racing and a model for how the sport can thrive in the modern era. Churchill Downs, the company behind the Derby, saw record betting activity and sponsorship revenue during the 2024 event. CEO Bill Carstanjen highlighted the Derby’s success as a model for other racing events.
“Our operational strategies represent a model for other racing events to follow. The Kentucky Derby is not just an event in its own right, but a blueprint for the future of horse racing,” Carstanjen said.
The Derby’s appeal goes beyond sport, being a cultural event that attracts participants from all over the world. Hall of Fame trainer Bob Baffert described the race as “an experience not to be missed,” attracting fans eager to capture the moment on social media.
However, while major events like the Derby, Preakness Stakes and Belmont Stakes maintain a strong following, everyday races struggle to attract attention. The number of owners, horses and trainers in the United States has declined over the past two decades, and, adjusting for inflation, the amount wagered on pari-mutuel racing has fallen 55 percent since 2000, according to the Paulick Report.
Betting and innovation: keys to rebirth
Horse racing’s renaissance depends on its ability to adapt to new betting trends and embrace innovative revenue models. Sportsbooks like FanDuel and DraftKings have played a central role in introducing the sport to a wider audience. Meanwhile, creative formats like the Pegasus World Cup in Florida have been experimenting with new ways to engage fans.
In 2017, Pegasus introduced a “slot race” model in which owners paid $1 million for a place in the race, with the total prize pool reaching $12 million, the richest in the world at the time. While the Pegasus has since returned to a traditional format, the slot race concept has gained traction internationally, particularly in Australia.
Danny Moses, a trader featured in The big bethe is among the investors who are betting on the future of horse racing. Moses, who owns shares in Starlight Racing, believes legalizing online betting will boost stock markets and increase the value of racehorses.
“I think the value of horses will increase,” Moses said, noting the growing interest and financial opportunities in the sport.
Starlight Racing, led by former hedge fund manager Jack Wolf, has produced champions such as 2018 Triple Crown winner Justify and 2020 Kentucky Derby winner Authentic. Wolf’s innovative investment model pools partners’ resources, allowing them to share the excitement and potential financial returns of owning racehorses.
Welfare regulation and reforms
One of the biggest obstacles to the sport has been its reputation for lax oversight and inconsistent regulations, particularly regarding horse welfare. The Horseracing Integrity and Safety Authority (HISA), established by the Federal Trade Commission, aims to address these issues by standardizing rules and enforcing doping regulations across state lines.
Lisa Lazarus, CEO of HISA, believes stronger oversight will attract more investors and fans by ensuring the sport operates with integrity.
“By prioritizing consistent and transparent practices, HISA aims to reassure fans and the public that horse racing operates with integrity and safety at its core,” Lazarus said.
HISA’s track safety program, launched in 2022, has already shown results. The rate of horse fatalities in U.S. racing fell to 0.9 per 1,000 starts in 2024, the lowest on record and on par with international standards.
However, not all stakeholders agree with HISA’s approach. Churchill Downs and the New York Racing Association (NYRA) filed lawsuits challenging the organization’s fees, though both groups largely support its mission.
Modernize the race facilities
Beyond regulation, aging infrastructure remains a significant challenge for the industry. Many tracks, built decades ago, fail to provide fans with the modern amenities they expect.
“People don’t want to visit facilities that date back to the 1960s and have old bathrooms and outdated seating,” said Donna Brothers, an NBC Sports racing analyst.
Major renovations are underway at several iconic circuits. Churchill Downs is investing $300 million to upgrade the paddock and grandstand. Belmont Park is undergoing a $500 million renovation financed by a New York State loan, and Maryland has approved $400 million to renovate Pimlico, home of the Preakness Stakes.
Dennis Drazin, CEO of Monmouth Park Racetrack, highlighted the importance of creating a multi-faceted experience for fans.
“Hippodromes will need to include gaming, entertainment, fan experience and innovation in their formula for success,” Drazin said.
A new era for horse racing?
Despite the challenges, there are promising signs that horse racing is entering a new era. Expanding television coverage, such as Fox Sports’ 1,000 hours of annual broadcast time, has boosted online betting activity. NYRA Bets, for example, saw betting grow 127% from $306 million in 2016 to $696 million in 2023.
Meanwhile, bookmaker partnerships and high-profile sponsorships are bringing new energy to the sport. FanDuel’s acquisition of racing broadcaster TVG and DraftKings’ sponsorship of the 2024 Travers Stakes highlight the growing integration of horse racing into the broader sports betting ecosystem.
Even as Freehold Raceway closes its doors, industry leaders remain optimistic that horse racing can adapt and thrive in a rapidly changing world. With modernization, innovation and a commitment to integrity, sports may yet regain its place in American culture.