After more than 170 years of operation, Freehold Raceway, America’s oldest horse racetrack, has run its final race. The New Jersey track, co-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 secure a casino license.
“Unfortunately, the operations of the racetrack cannot continue under existing conditions, and we do not see a plausible way forward,” said Howard Bruno, the track’s general manager, 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 for a revival of the centuries-old tradition.
A changing landscape for horse racing
In 2023, horse racing contributed more than $36 billion to the U.S. economy, supporting nearly half a million jobs, according to the American Horse Council. Revenue streams include ticket sales, trackside hospitality, sponsorships, merchandise, broadcast rights, and—most significantly—gambling.
The handle, or the total amount wagered on races, is a critical driver of the sport’s economy. Wagering funds the purses awarded to winning horses, which in turn attract higher-quality competitors and generate greater interest among fans. In 2022, U.S. horse racing saw $12 billion in bets placed on races, setting a new record. Total purse money also reached an all-time high of $1.25 billion that year.
This growth is largely tied 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 elevate 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 blueprint for how the sport can thrive in the modern era. Churchill Downs, the company behind the Derby, reported record betting activity and sponsorship revenues during the 2024 event. CEO Bill Carstanjen highlighted the Derby’s success as a model for other racing events.
“Our operational strategies present a model for other racing events to follow. The Kentucky Derby is not just a standalone event but a blueprint for the future of horse racing,” Carstanjen said.
The Derby’s appeal extends beyond sport, serving as a cultural event that attracts attendees from around the world. Hall of Fame trainer Bob Baffert described the race as a “bucket-list experience,” drawing fans eager to capture the moment on social media.
However, while marquee events like the Derby, Preakness Stakes, and Belmont Stakes maintain strong followings, everyday races struggle to attract attention. The number of owners, horses, and trainers in the U.S. has declined over the past two decades, and adjusted for inflation, the amount wagered on pari-mutuel racing has dropped by 55% since 2000, according to the Paulick Report.
Betting and innovation: Keys to resurgence
Horse racing’s resurgence hinges 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 broader audience. Meanwhile, creative formats like the Pegasus World Cup in Florida have experimented with new ways to engage fans.
In 2017, the Pegasus introduced a “slot race” model where owners paid $1 million for a spot in the race, with the total purse reaching $12 million—the richest in the world at the time. While the Pegasus has since reverted to a traditional format, the slot race concept has gained traction internationally, particularly in Australia.
Danny Moses, a trader featured in The Big Short, is among the investors betting on horse racing’s future. Moses, who owns shares in Starlight Racing, believes legalized online betting will drive higher purses and increase the value of racehorses.
“I think the value of horses is going to go up,” Moses said, pointing to the growing interest and financial opportunities in the sport.
Starlight Racing, led by former hedge fund manager Jack Wolf, has produced champions like 2018 Triple Crown winner Justify and 2020 Kentucky Derby winner Authentic. Wolf’s innovative investment model pools resources from partners, allowing them to share in the excitement and potential financial returns of owning racehorses.
Regulation and welfare reforms
One of the sport’s biggest hurdles 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 yielded results. The rate of horse fatalities in U.S. races fell to 0.9 per 1,000 starts in 2024, the lowest ever recorded and on par with international standards.
However, not all stakeholders are on board with HISA’s approach. Churchill Downs and the New York Racing Association (NYRA) have filed lawsuits challenging the organization’s fees, though both groups broadly support its mission.
Modernizing race facilities
Beyond regulation, outdated infrastructure remains a significant challenge for the industry. Many racetracks, 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 NBC Sports racing analyst Donna Brothers.
Major renovations are underway at several iconic tracks. Churchill Downs is investing $300 million to upgrade its paddock and grandstand. Belmont Park is undergoing a $500 million overhaul funded 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, emphasized the importance of creating a multifaceted experience for fans.
“Racetracks will have to include gaming, entertainment, fan experience, and innovation in their formula for success,” Drazin said.
A new era for horse racing?
Despite challenges, there are promising signs that horse racing is entering a new era. Expanded television coverage, such as Fox Sports’ 1,000 hours of annual broadcasting, has boosted online betting activity. NYRA Bets, for example, saw wagers grow 127% from $306 million in 2016 to $696 million in 2023.
Meanwhile, partnerships with sportsbooks and high-profile sponsorships are bringing fresh 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, the sport may yet reclaim its place in American culture.
