Yes, off-track betting is commingled into racetrack betting pools. Simulcasting is a big reason racetrack attendance is down -- people are betting at off-track sites or from home via Internet instead of at the track.
But they're still betting, as the numbers show.
This is a good article that accurately summarizes racing's problems, but don't write the sport's obituary yet. Annual betting handle at U.S. racetracks continues to exceed annual movie box-office revenues.
Here are the numbers: