There's a perception in some corners of the gaming industry that horse racing is on its last legs because its core patron is an elderly male.
Walter Hessert begs to disagree.
He sees a world of potential in horse racing and has been quite successful in breaking the mold and bringing new fans to a centuries-old sport.
In Feb. 2013, Hessert and his brothers, Tom and Bill, launched the innovative online wagering site Derby Jackpot through their New York-based company Giddy Apps.
Nearly two years later, Derby Jackpot is coming off a record handle in November. Its popularity is best reflected in an annual handle of $20 million and more 200,000 players, and contained in those figures are demographics that should open the eyes of any racetrack executive. Some 80 percent of Derby Jackpot customers never bet on a horse race before visiting the site and 50 percent of them are women.
So much for perceptions.
"We are making horse racing accessible to people and introducing it to them for the first time," said Walter Hessert, Derby Jackpot's co-founder and chief product officer, "and they're finding it to be fun entertainment."
The backstory of Derby Jackpot dates back a few years when online poker was shut down in 2011. At the time, Bill Hessert was studying horse racing along with Stephen D. Levitt, the author of "Freakonomics." None of the Hesserts had a background in horse racing, but they were astute enough to realize horse racing was alluring territory because of the opportunity that arose when it became the nation's lone form of legalized online wagering.
Unlike an ADW, where customers can wager on current and upcoming races at a variety of tracks, Derby Jackpot offers wagering on a single race that is rapidly approaching post time.
The Hesserts' answer was to hire a team of top engineers and a couple of game designers experienced in social gaming and computer gaming and create a site that re-invented racing's wheel. Instead of battling larger and more established online sites for existing racing fans, they would target the 40 million people who play Facebook's social casino games and bring the race track to them through a site and an experience customized for them.
Unlike an ADW, where customers can wager on current and upcoming races at a variety of tracks, Derby Jackpot offers wagering on a single race that is rapidly approaching post time. With a roster of more than 50 tracks, new races and wagering opportunities pop up within minutes of each other. That format, along the large graphics and the way wagers are placed, gives the site the kind of a feel that works well with people who enjoy visiting casinos and playing slot machines or roulette. A knowledge of prominent jockeys or trainers or deep understanding of speed figures or track biases can be checked at the door as Derby Jackpot's design is geared to focus on horse's names, betting numbers or computer-generated quick picks.
All wagers are commingled with pools at the host track through Xpress Bet and, in an added twist to separate Derby Jackpot from the typical ADW, wagers have unique names like Donkey bet for a place bet and The Fiddy for a trifecta.
"If you're looking to bet a race three hours from now, we are not the site for you," Walter Hessert said.
In another effort to make the Facebook crowd feel more at home, Derby Jackpot also promotes interaction between its players through a prominently placed area for online chats.
"Derby Jackpot is geared to slot players and people who play social casino on Facebook and we've done well at targeting them and crafting our message to them," Hessert said. "It's also very much a social experience. We get an incredible amount of social interaction between our players, to the point where I've seen talking in our chat rooms about organizing trips to the track. And these are people who never had interest in following horse racing. We have a player who is posting photos on Instagram from his horse racing man cave and he's 30 and had never bet horses before. We're keeping people engaged in a way that they will come back."
People are indeed coming back, and the numbers are growing, largely because of Derby Jackpot's huge target audience.
"We're focused on the masses, the millions who play social gaming on Facebook," Walter Hessert said. "Marketing and building the product is different for us than it would be for an ADW because we just don't cater to a handful of players. We want to reach the masses. It's a different product for different people and that's a good thing for the industry. We're a track's dream."
While Derby Jackpot lags well behind the annual handle of the industry's leading ADWs, its ability to tap into new streams of revenue and fans has indeed piqued the interest of racing officials involved in promoting the sport.
"We embrace and greatly welcome private sector, and especially technology start-ups, interest in the sport," said Stephen Panus, the vice president of communications for the National Thoroughbred Racing Association. "There is no question that Giddy Apps recognized and seized a business opportunity by creating a user-friendly new fan tool of engagement that directly benefits horse racing and its future. With our target consumers migrating away from television toward wireless and digital devices, it is incredibly beneficial for horse racing to be able to offer up a compelling entry point for sports fans to engage in the thrills and excitement of horse racing via direct investment."
Buoyed by the success of Derby Jackpot, Giddy Apps has another game ready to pop from the starting gate in January. The still unnamed game will target people who play lotteries, and is expected to revolve around wagers like the Pick 4 and Pick 6 and will allow customers to play lucky numbers, a name, or quick picks based on an algorithm to increase the chances of winning.
Since it's estimated that one out of four Americans buy lottery tickets, there's once again a target audience that's so huge there can be a windfall for Giddy Apps -- and horse racing -- even if they can only attract a miniscule slice of them.
"Tracks can't do the digital marketing we do, just like my brothers and I are not specialized in running a track," Hessert said. "The good part is that we complement each other because we're bringing in new people and money to the wagering pools."
And as all that new money and fans continue to grow, at some point down the road racing just might have something else brand new: a new perception about it.