In the 1860’s in the UK, innovators were working on a device that could propel a carriage without the use of a horse. It was the beginning stages of one of the most influential and important inventions in modern times — the motorized vehicle.
In the early days, though, these UK inventors came across a roadblock. There were people who liked things the way they were; because they owned the horses and the stagecoaches; shod the horses and built and serviced the stagecoaches. To push back against this new device, they used their connections to lobby for legislation to help their legacy businesses. In 1865, they were rewarded when ‘The Red Flag Traffic Laws’ were passed.
These laws put penal restrictions on powered devices:
• They could go no more than four miles per hour in the country, or two miles per hour in the city.
• Three people had to travel with the car. One had to drive, another had to walk in front of it waving a red flag to warn people they were coming, and the other had to, well, no one is really sure, but he had to be there.
• A whistle had to be affixed on the car, even though the whistle (curiously) “shall not be sounded for any reason whatsoever.” The vehicles had to have lights (not easy in the day), and the owner’s name and address had to be prominently displayed
These new rules worked as intended. The development and testing of this new vehicle wilted.
Meanwhile, in the relatively new and individualist country across the pond, Uncle Sam saw no reason to pass such laws. In 1896, when England repealed the Red Flag Laws, the combustion engine had already arrived. By 1915, Henry Ford’s new assembly line innovation allowed for a motor vehicle to be put together in 90 minutes flat. The rest, as they say, is history.
What do car laws in 1865 have to do with harness racing? I think, in this day and age, quite a bit. Allow me to explain.
Harness racing as a gambling game has been afforded some generous protections. In 2006, the Unlawful Internet Gaming Enforcement Act (UIGEA) was passed, which prohibited “gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet.” This law killed a lot of Internet gambling (especially online poker sites), but, as we all know, it left horse racing free to take bets over the web.
Since that time, harness racing (along with their thoroughbred cousins) has used this edge — Internet wagering has allowed us to wager and enjoy the sport from home, with 100 per cent legality. But far too often it has simply reshuffled the deck and market share has not increased.
Meanwhile, Daily Fantasy Sports – with demographics that hits racing right between the eyes – has boomed. It too had a grey area carve-out, and enterprising entrepreneurs took advantage of it. Back in 2010, the letters “DFS” were foreign to almost everyone. In 2016, these sites took in $3.4B in bets.
More recently, handle is growing leaps and bounds on something called ‘e-sports’. This may surprise some of you (I’m still having trouble getting my mind around it), but this involves wagering money on teams who play in video game tournaments. Yes, I typed that right. By 2020, some are predicting this wagering will reach upwards of $36B – about 300 per cent more than is currently wagered on all breeds of horse racing in North America. At the present time, most of this betting takes place offshore.
Maybe at this point you’re getting depressed. It seems there’s more competition for harness race wagering over the web, not less, despite the UIGEA. No, I’d argue that’s not the case, because we’re in the process of seeing more and more gambling regulation.
First, Attorney General Jeff Sessions appears to be leaning towards banning much of the Internet wagering we see today.