Both Turfway and Laurel are installing new synthetic surfaces. Interesting that just 2 days ago in this blog I listed the installation of synthetics as the first and most important change American Racing must make if it wants to slow the decline of American Racing.
Here's the article:
I was recently asked why so many people in the American Racing industry are so critical of the industry they participate in. I was also asked why we critics don’t spend our time offering suggestions for fixing racing. The folks who asked me these questions are members of a large community in racing that think public criticism can only do further damage to the American Racing industry. Both issues, criticisms and solutions, are inextricably linked.
Many strong American Racing critics have spent years suggesting and recommending changes to racing executives, association representatives and regulators. Many of us have joined executive boards and advisory committees. We have also made calls, presented issues, offered solutions, created PowerPoints, written letters and sent emails to those in a position to address issues. What we have often found is that the same people who have authored the massive industry decline, and can regulate change, are only interested in “simple inexpensive, non-conflict oriented quick fixes”. Yep, they are politicians not problem solvers, so multi-faceted integrated solutions which are required to solve complex systemic problems are simply not what politicians seek.
When critics make complex suggestions, they are typically ignored by people who favor inexpensive simplicity and the status quo. The critics naturally assume that those in power must not understand they are in a crisis. Consequently, they attempt to create “crisis understanding”, which can drive organizational innovation and change. Unfortunately, the same people who ignore complex or expensive multi-faceted solutions are also inclined to deny clear evidence of a crisis, particularly when their past action/inaction caused the crisis in the first place.
This is where the American Racing industry has been for many years. Major multi-faceted immediate change and innovation is required to address the mess that is racing, but only slowly evolving simple changes are acceptable to those in charge. So, American Racing industry racing executives, regulators and industry associations ridiculously focus on patronizing consumers with baby step changes, as those same consumers continue to direct their dollars toward more trustworthy and interesting consumer options.
The American Racing crisis is real and has been in evidence for decades. Since 2000 pari-mutuel revenue has dropped 21%, and when inflation is considered, the real dollar decline is 49%! Yep, inflation has averaged over 2% per year since 2000 and that means American Racing is today collecting only half of the real dollar pari-mutuel revenue the industry collected at the turn of the century. On top of this shocking two-decade decline, the number of American foals born has dropped 42%, clearly indicating a dramatic decline in the American consumer need for the American racing product!
Of course, these horrible economic indicators are not significant to folks who conveniently and politically only think from one data point to another. Afterall, revenue only drops 1% each year, while foal volume only goes down about 2% per year, right? Yep, that’s exactly how many people think. They go from data point to data point, never recognizing trends or crisis situations. In fact, there are some people in the industry who think things are getting better, or are sure that a magical change will improve the “bad cycle” fortunes of American Racing. In truth, things are getting worse. Baby steps taken in the industry are claimed to be beneficial, but they are really the equivalent of shuffling the deck chairs to improve the situation on a sinking Titanic.
Last year, based upon a recent industry press release, American Racing saw pari-mutuels decrease by 2.0% while purses went up 4.5. These factors are considerably worse than the prior two-decade averages. The net effect of increasing purse expenses 4.5% and seeing revenue decline 2%, when inflation was over 2% last year, negatively impacts profit/loss ratios by near 10%. In other words, losses are accelerating and 2019 was an awful year for the industry in general.
A quick look at the last 5 years in breeding also shows a near 2% decline per year, but a very disturbing state by state trend. Only Pennsylvania saw an increase in breeding over the last half decade, while Kentucky has only seen a 2% decline. Both the Pennsylvania and Kentucky numbers may seem encouraging on the surface however, those state results mask massively accelerating declines in many states. Many states show severe breeding declines, led by states like Minnesota, Washington and Colorado with declines of 78%, 66% and 64%, in just the last 5 years!
What I find more interesting is breeding versus available purses. By looking at the mares being bred in a state and reflecting that against the annual available purses in a state, a metric of breeding per million dollars of purses emerges. This metric reflects the effect purses should have on breeding activity. For example, if purses (racing expenses) in a state go up, so should breeding activity. If purses are cut, breeding activity should naturally go down.
Over the last half decade, of the 24 meaningful racing and breeding states studied, the breeding per million state average went from 31.7 mares bred million down to 21.5, down 33% (2015 through 2019). In fact, 17 of the 24 states (3 out of every 4) saw an over 30% five-year decline in this critical breeding metric, or 6% on average each year! For example, Washington bred 43 mares/million in their state in 2015, but only 18 in 2019. Minnesota went from breeding 10 mares per million in their state in 2015 to only 2 in 2019.
In Kentucky, where 56% of all Thoroughbred breeding in America breeding occurs, the breeding per million number only dropped 14% over the 5-year period. This means that in aggregate, though American breeders are breeding much less than they did 5 years ago, those mares that they do get bred are being shipped to Kentucky for breeding. While that is really no surprise, the degree to which the breeding economy is drying up in most states is shocking!
The data tells the crisis story. Profit positions are deteriorating, big owners are going bankrupt or leaving American racing altogether, consumers are abandoning the sport, new consumers have no interest in the sport, and individual state breeding economies have been decimated. What should we do? Well here are my short form American Racing answers to that question …. again.
First, we must address very public consumer concerns about safety. All American racetracks need to remove dirt surfaces and replace them with state-of-the-art synthetic surfaces such as Tapeta. The data internationally, and even in American racing itself, indicates synthetics are 50 to 120% "more dangerous" than dirt surfaces. Then we need to implement a “one model safety protocol” for all American racetracks. It’s not just about drugs but it is about no race day medication, prescribed pre-race and workout veterinary inspection protocols, out-of-competition testing, consistent medication limits, high quality testing laboratories, defined and strong violation penalties, appropriate whip limits, and backside monitoring through high definition cameras and microphones to not only inspect for cheating but to prevent it.
Second, address the wagering attraction. Advance the risk analysis mechanisms to create fixed odds wagering. Create wagering plus/minus lines (lengths or finishing positions). Create more horse to horse wagering options. Partner with fantasy experts to create weekend fantasy wagering options. Make all basic data wagering information publicly available and free. Models for all of these wagering options, including the advanced use of mobile or table top kiosk technology, exists in the sports betting industry and elsewhere.
Third, address the live entertainment and sporting attraction. Concentrate on the fan experience by running races on a timely basis every 20 to 25 minutes, and fill the gaps with entertainment, fan tours, behind the scenes perspectives, other “prize worthy or charitable” competitions (MMA, boxing, races, track and field, “safe” pet or farm animal events/racing, etc.) The overall fan experience extends to consumer expectations which racing fails at miserably in most cases, at most racetracks. These include contemporary intuitive website designs, call center answering standard operating procedures, decent on-line reservation services, fine dining quality menu options, cleanliness, improved event view seating, and many elements of onsite consumer interaction. Consumers are treated better when purchasing a $6 movie seat online than they are when trying to wager $500 at a racetrack.
Lastly, the consumer experience extends to marketing. When the fan experience is also considered as part of marketing, both are far from contemporary. The inability of racing to secure effective media contracts or relationships, both nationally and locally, prevent effective fan engagement. Social media, when it is utilized, is utilized incorrectly by almost all American Racing institutions. There has to be an entire revamp of American Racing marketing plans and priorities to create greater focus on consumer emotional connections, and “consistent, not occasional” consumer affiliation with equine and human superstars. This disconnect is both severe and unique to American Horse Racing. It requires a funded “consumer focused” marketing innovation program nationally and locally.
In closing, a multi-faceted approach to innovation is required in the American Racing industry. This typically means a centralized approach, like a National Board or Racing Commissioner’s Office. A centralized approach is probably the only way to control innovation and drive change in a generally dysfunctional industry which has spent decades failing to agree on just about anything consumers care about. “Standard Operating Procedures” exist in profitable quality organizations and industries, but American Racing is decades behind in even creating them, much less implementing them!
Well, I hope this answers the questions for those who have asked. And yes, unlike most presidential candidates today, I know change will cost a lot of money. However, after spending years analyzing and fixing some pretty large businesses and studying quality, I know the unknown and unknowable cost of poor consumer quality is immense, and far outweighs the innovation cost required to fix them. If for example, things were simply the same today as they were in the American Racing industry 20 years ago, pari-mutuel revenue would be up over 11 Billion Dollars, and we would have 15,000 more foals born, in 2020! Do you think those results would have paid for Tapeta surfaces, high definition cameras, decent websites and functionality, additional veterinary inspections and the other hard work suggested?
Oh well, such is life in the American Racing Industry. Those in power will continue to patronize critics and consumers, asking for change suggestions. I’m afraid however that they will also continue to only be interested in inexpensive short-term quick fixes, which by the way will never exist, rather than systemic innovations required to address an industry in crisis.
In early 2019 there was a massive outcry regarding American racehorse safety. Behind all the posturing and patronizing what has the American racehorse industry actually done? The answer, is next to nothing my friends.
While focused on Santa Anita, the entire American Thoroughbred race horse industry experienced a full-frontal safety assault from their own fans, the public, politicians, PETA, HBO and the rest of the media. Today, a simple search of “2019 horse racing deaths” produces over 17,000,000 results! Despite the apparent crisis, American horse racing has addressed this 2019 dilemma with all the vigor of a sleeping dog.
Certainly, the racing industry did something right? Afterall, they contrived little groups to claim how much they care, ran ads, convinced people to publish stories about how great they treat racehorses, and even had a handful of American racetracks take some “inexpensive” baby steps to try and convince the public they actually cared. However, when it’s all said and done, things are essentially the same today as they were in January.
You see, caring is all about sacrificing something to “be sure” you apply the very best methods to creating a “top tier”, not merely adequate, safety environment! We still do things the “American Way”. Here are just a few examples.
We run on unquestionably dangerous dirt surfaces with no plan to transition to much safer Tapeta synthetics or turf. We drug over 95% of all horses “on race day” to mask pain and enhance racehorse performance. We allow rampant state by state variability in medication, therapy protocols, oversight and enforcement. We even still allow over half of the racetracks in America to load hurting horses into starting gates daily without even conducting simple pre-race vet exams.
Of course, the 2019 fatality and safety issues were a public black eye but they are only the tip of a dirty and sinking American racing iceberg. This year the American racing industry officially shrunk to the 53-year lowest point ever in Thoroughbred foal production, which is the key indicator of the diminishing consumer demand for the American racing product. In just 3 decades the industry has been cut in half with no signs of a slow down in the deterioration, as the 2019 annual drop was another 3.6%.
The American racing product still doesn’t include popular sport wagering options with handicaps and lines, or lock in odds at the time wagers are made. It does not have a national authority but instead maintains a dysfunctional state by state structure which promotes massive variation and an entirely uncooperative industry effort. It actually encourages states and racetracks to compete against each other, hurting everybody’s product.
In addition, efforts to prop up the failing consumer product have focused on “non-racing related” subsidies, instead of improving consumer acceptability of the product. Those subsidies are now huge, because the racing product itself continued to decline and is now so poor that it cannot even approach standing on its own from a profit perspective. Couple the product failure with the fact that the industry markets the racing product as if half the media technology used to market competing endeavors doesn’t exist. (Over 99% of the public cannot name last weekend’s big stakes race, much less any horse that participated in it!)
So, 2019 was just business as usual related to change or improvement in American Thoroughbred racing. The trends related to the ongoing wasteful demise, and even a public outcry related to the element of safety in racing, was not enough to dislodge foolish failing momentum.
Meanwhile, the low minded and failing Thoroughbred Racing Industry celebrates foolishness and baby steps when the whole system, including the implementation of best-known scientific safety methods, needs to be incorporated in a modern re-engineering transition. There is absolutely no plan to transition the sport into the future.
Make no mistake. American racing powers have, for years now, made every effort to create the illusion of progress where there was none. 2019 is no different!
Sports betting just kicked off in Iowa today. Minnesotans are now traveling to Iowa to make sports wagers, and their money is contributing to the Iowa economy and horse racing industry! Good for Iowa but bad from Minnesota. There is little doubt that Iowa's racing product and purses will substantially benefit from the additional revenue.
Minnesota Thoroughbred breeding has suffered substantially over the last decade. According to the Jockey Club, Minnesota has seen a 78.1% decline in mares actually bred in the state. That means that for every 100 mares bred in Minnesota back in 2008, only 22 were bred there in 2018. That is a stunningly poor breeding result considering Minnesota had a 59.4% INCREASE in gross purses over the same decade! The 59.4% increase is one of the largest gross state racing purse increases in the country. Minnesota has also seen a 40.6% decline in Thoroughbreds foaled in Minnesota over the last decade of record.
By comparison over the last decade, mares bred nationwide only declined 42.7%, but there was also a 4.1% decline in gross purses nationwide.
Considering the declining fortunes in the Thoroughbred racing and breeding industry, every state must now compete with neighboring states for trainer stables and horses. Iowa's state bred purse structure, which is already near 20% higher than Minnesota's based upon same race condition comparisons, will quickly benefit from sports betting advantages generating an even greater competitive disparity between these two neighboring states.
(All data is public and is based upon Jockey Club published state fact books.)
For more on Prairie Meadows sports betting, here is a link:
After making many mistakes in my life, I finally achieved some success by learning to go to where the data took me. As a statistical quality student and teacher, I have been both satisfied and shocked by “discovered” truths that emerge from a properly conducted analysis. I’ve been satisfied because sometimes the results match my internal biases, opinions and beliefs. I have also been shocked because the results often shake me to my core, differing from those same biases, opinions and beliefs.
There are very few things I enjoy more than seeing people or systems improve once discovered truth is revealed and accepted. On the other hand, nothing makes me more angry than political charlatans who ignore truths, manipulate people, rely on foolish opinions and continue damaging activity. It is with this in mind that I write this blog.
In 2019, racing fatalities have become a huge media headline. Of course, the media cares more about attention, readers or viewers than the truth. Nevertheless, dysfunctional American Racing powers have handled the media attention the way they have handled most things over the last few decades. They are statistically sloppy, inconsistent and political. The industry has slowly, inconsistently, and randomly, put forth partial baby safety steps. These steps will do very little to improve the “equine safety system” nationwide. In other words, American Racing powers have deployed the same failed routine in 2019 as they have for decades.
Yep, because the American Racing Industry has treated this recent media fatality onslaught just like they have treated everything else, with awful consumer awareness and “undisciplined” statistical logic, the media now treats every racing fatality as evidence of an evil and mean industry, which seems willing to sacrifice noble animals for profit.
So, let’s lay out the Real Truths on this subject.
1. Santa Anita, the epicenter of the American Racing problem according to the media, actually had one of their lowest equine fatality counts in the last 9 years. Yep, only 30 horses died during the December 2018 through June 2019 horse racing meet. That 30-horse fatality total is much lower than the prior decade annual average of 40.2!
2. Unfortunately, the 30 deaths mean nothing statistically. We need to relate the actual racing population at a racetrack to the fatalities. Santa Anita had only 5404 starts during the recent meet. That results in 1 “racing or training” death per every 180 starts, and here’s the thing. That number is absolutely NORMAL and should have been expected! The prior decade reflected 1 death for every 188 starts at Santa Anita.
3. The early part of the recent Santa Anita meet resulted in a much higher (more than double) rate of fatalities than the later part of the meet. The why of this statistical variation cannot be discovered. Santa Anita has claimed that their minor safety changes, made in the middle of the meet, were the reason for a decline in fatalities. I think that’s BS and the real reason for the variation was the racetrack surface and massive rains, but I cannot prove this. Nevertheless, the reason cannot be discovered because of the sloppy way in which data is maintained and controlled.
4. Jerry Hollendorfer was suspended. He had a trainer fatality rate outside of normal statistical control limits. He might not have been the only one, but I do not have data on this. He, and any other trainer outside of normal control limits, should have been put on notice that their procedures and fatality rate will be monitored to the point that if they exceed a specific rate over a certain time period (say a rolling 6-month period) they will be suspended. No one should have been summarily suspended without “disciplined statistical control metrics” already in place!
Hollendorfer’s Santa Anita fatality rate was high at 1 “racing or training” death per 40 starts. Now, remember that the Santa Anita death rate was 1 “racing or training” death per 180 starts (near the normal expectation of 188) during the meet. Hollendorfer’s fatality rate was over 4 times higher than the average. During the same time frame, his fatality rate at Golden Gate was 1 “racing or training” death per 110 starts, bringing his California average fatality rate to 1 death per 63 starts.
(FYI, a good analyst could create “suspension control metrics” related to fatalities, and I find it ridiculous that these do not exist and were not put in place for all trainers after the suspension.)
5. Sloppy statistical handling in American Racing demonstrates an uncaring lack of control. The national Equine Injury Database (EID) counts “only” racing fatalities within 72 hours of a race. The data is not audited and self-reported by racetrack. Many tracks do not report. Many racetracks that do report do not allow their EID results to be published. Each state’s racing commission controls and publishes fatality data differently. Fatality control metrics per trainer do not exist. Training fatalities are not counted in the EID, even though they would increase the death count by 50% to 250% in some years at some racetracks. Yep, at racetracks like Santa Anita you can take what they report to the EID and almost always double those deaths every year to get near the total fatality figure.
Personally, I can’t believe anyone with a shred of quality understanding would have designed the EID. Not only is it devoid of quality control but the core metric of fatalities per 1000 starts, is obtuse and means nothing to the average consumer. At least deaths per start is relatable. For example, knowing a trainer is responsible for an equine death per 40 starts, or a racetrack is responsible for a death every 180 starts (which is every 2 to 3 racing days), is meaningful.
6. There is no transitional plan to improve the equine safety system in America. A national oversight structure for American racing does not exist. The result of this foolish flaw is that any improvement, or the implementation of “best known” safety methods in the American Racing Safety System, is inconsistent.
There are best known safety methods, racing surfaces, inspection protocols and medication protocols. Today New York has a “racing” fatality rate that’s nearly half of the Santa Anita and Churchill Downs rate. New York came close to cutting their “racing” fatalities in half after a 2012 100-page report and analysis conducted resulted in improvements. Data in Europe, and even America, prove that synthetic surfaces will cut dirt racing fatalities dramatically (from 50% to 125%). Some racetracks conduct pre-race veterinary inspections. Europe’s procedures and methods result in approximately half the fatalities American racing suffers from.
Like I said earlier, the data leads to truth. My truths in this blog come from gathering data elements residing in state racing commission reports, the EID, verified news reports, Equibase and other public sources. The truths are as accurate as the underlying data.
The media and some consumer groups were entirely unfair in their coverage of racing fatalities. American Racing equine fatalities have not shockingly gone up but, in fact, have gone down. However, the new bright light of equine safety accountability has shown that the American Racing safety system is woefully less effective than is could and should be. We endanger horses, which also endangers riders, beyond all scientific reason. Best known methods, and proven models of safety, exist not only in Europe but also in pockets of North America. Unfortunately, this leads to one more conclusion.
American Racing powers are disingenuous. Regardless of their consumer patronizing comments or baby step safety changes, American Racing’s deluded principles of profitability generally trump the implementation of top tier safety measures. If they didn’t, a quality controlled national safety transition plan would exist, and every American racetrack would have a plan to replace their dirt tracks with Tapeta!
Consumer groups, the media, American racing executives and horse association board members have all been wrong in different ways, regarding equine safety. I now can only encourage all parties to understand that facts do not cease to exist simply because they are ignored.
I hope American Racing executives begin to understand that our industry demise was caused by ignoring consumer desires. We will never reverse this demise by continuing safety practices which consumers find distasteful. A comprehensive multi-year equine safety transition plan is a place to start.
This year the yearling auctions readers of this blog seem to care about, are all together on the calendar.
Iowa is having their sale September 5th, Minnesota's is September 8th, Keeneland's sale begins September 9th and the Canadian Yearling sales for Divisions are August 26th and September 10th. Those buyers interested in gobbling up some state or Canadian Bred yearlings may have to make some choices about where they want to go.
With questions starting to ramp up, as they do every year, new owners often look for educational resources. Good ones are very hard to find. State Associations typically offer simplistic or propaganda laden materials in this regard. That's why I developed new owner educational information a few years ago and put it on our "Owner Education" page on this website. It has been called by many the best and most specific educational information available, and here's the direct link to the page: "Owner Education"
Best of luck to friends interested in the auctions this year, and I hope to see you at those I will be attending.
For a few years I have casually blogged about Minnesota racing and breeding. However, I began to comment on racing in general in 2019, coincident with my move to our new Kentucky farm as well as the particularly hard times American racing has experienced this year associated with public fatalities and safety issues.
My emphasis is always data and quality based, since that is my background, and I believe that data analysis will always lead to the truth while opinion is a low form of intelligence, always sprinkled with myths. Of course, my outspoken attitude with regard to data versus opinion tends to alienate the many people who have spent a lifetime treasuring foolish beliefs.
With that said and to my surprise, the Astar Thoroughbred website and blog unique visitors jumped up substantially in 2019 and I just found out that the Astar Thoroughbred blog is ranked 70th in the world according to https://blog.feedspot.com/horse_racing_blogs/
I guess there is a horse racing audience for an old retired casual blogger who tries to discover and share truths before spouting off. Who would've thunk it, eh? (Also feel free to browse my 2019 blogs and archives if you want to see what people were interested in.)
For a few months I have spot checked parimutuel handle trends and found that there was great 2019 variation by racetrack. Now that all the data is available, the overall 2019 decline looks pretty substantial with June reflecting a whooping 7.2% drop nationwide.
Some of the decline is explainable in that there was no Triple Crown chase this year, after Justify helped drive additional handle in 2018. In addition, the terrible media coverage of equine fatalities also seems to have driven handle lower.
What I particularly found interesting was the variation by racetrack illustrated in the included table. For example, Churchill saw an over 17% increase despite June being one of the worst weather months in Louisville Kentucky history. (We have now experienced over 40 straight days of rain!)
There is one universal truth. The quality of the racing product (field size, full race cards and the underlying quality of horses) drives revenue in racing, just like product quality drives revenue in any business. Churchill had full cards, an average field size of 8.6 and very high quality horses competing in June.
Negative trends in general, and the inability of certain tracks or jurisdictions to drive quality into their racing products, may suggest continuing consolidation, contraction and declines in the industry.
Today, I noticed that the CHRB is taking legal steps to try and stop the Santa Anita racing season. In the meantime, American racing powers have done next to nothing to really improve safety nationwide, and no matter what they say I know they are full of it. Why? Because synthetic Tapeta racing surfaces continue to save Thoroughbred lives worldwide, AND American racing powers know it!
I said this several weeks ago in a blog. An easy 150 fewer American racing equine racing fatalities would occur per year, or over 1500 fewer in the next decade if all dirt tracks were replaced by Tapeta synthetic surfaces. The consistency (every year) and magnitude (40% to 105%) in fatality results presents an indisputable truth, and guess what? This data comes from American racing's own Equine Injury Database!
So the next time some knucklehead racing expert, politician or state racing commissioner, says they really care about horses, ask them why they do not support the immediate replacement of dirt tracks in American with Tapeta synthetics.
Until American racing's ancient thinkers support and pay for a complete dirt to synthetic transition, their "caring" comments are both hollow and dishonest. Facts, and the TRUTH, should always prevail and when they do not, unprincipled deception always exists.
The Triple Crown racing season officially ended once Sir Winston crossed the finish line in The Belmont Stakes last weekend. For me, it was the non-descript 3-year-old racing competition I expected, with no one individual standing out. It was also an end to a study I decided to conduct regarding pari-mutuel revenues during the 2019 Triple Crown racing season.
Knowing that American racing understands little about consumers or statistical variation, I decided to comparatively survey racing revenues to see if the negative national media regarding racing fatalities might translate into emerging revenue trends, and thus cause American racing to change practices which have contributed to declining in consumer interest.
For me, this is a tough issue. I love racing and have been a handicapper, race horse owner, stallion owner and breeder. I also have watched American racing become a mere shell of itself as it ignored consumer demands. I remember over 40,000 foals being born every year three decades ago, not the 19,000 or so we see now. I marvel at the under 37,000 races we see run in America every year, remembering that nearly 80,000 races were once run every year. I watch with embarrassment as racetracks offer consumers 8 Thoroughbred race day cards and ridiculous 4, 5 and 6 horse racing fields, while remembering 10 Thoroughbred race daily cards and average field sizes of 9 not all that long ago.
Yep, live racing in the 1990’s drew thousands more consumers to the grandstand. “On track” American wagering was nearly 5 billion dollars a year back then, in today’s dollar equivalents. Now “on track” wagering is less than 1 billion dollars, a mere 20% of what it once was. Thank goodness for “off track” wagering which has grown to now support the bulk of the racing revenue, even though total American wagering has dropped 45% in just the last 15 years, when inflation is properly factored into the equation!
While other wagering and entertainment activities have grown dramatically by developing contemporary products which “delight” consumers, our moribund and stagnant American racing industry has shrunk to become a mere shell of itself. Think about it. With all the overwhelming American racing negative economic evidence we have stood pat, patronizing consumer interests but never meeting their new demands.
American racing truly reflects “the boiled frog” attitude. (The boiled frog parable explains how a frog will boil to death if the water temperature slowly rises to boiling, yet jump right out of the water and live if placed directly into boiling water.) In other words, American racing’s slow demise in consumer interest over many decades has not caused any dramatic reaction, despite aggregate declines that would be considered intolerable in the majority of other industries.
For those of us in the industry who are not only willing to welcome dramatic change but begging for it, the negative national media attention is both a blessing or a curse. In other words, it could be a blessing because it could drive some of the dramatic changes needed to reinvigorate the once great sport of racing. On the other hand, it could be an embarrassing curse causing incremental declines and deterioration.
Based upon my study, what I found was that certain racetracks are seeing some dramatic pari-mutuel declines, but others are actually seeing improvements when the fact that this year’s Triple Crown racing season was devoid a potential Triple Crown winning candidate. Santa Anita, which remains at the epicenter of the fatality controversy, has seen substantial declines in pari-mutuel revenue. For a representative example and based upon public charts, their live handle was down 36% on Belmont Day, over one million dollars from 2018. On that same day, their total pari-mutuel revenue including intra and inter-state wagering was down 29%, over five million dollars from 2018. Looking back to 2017, a non-triple crown winner year, their total revenue was still down 21%, which is fairly dramatic.
It is no surprise that Santa Anita is taking a pretty big revenue hit but when we look elsewhere, and normalize the analysis for last year’s positive influence of Justify winning the Triple Crown, we see no negative impact at most major racetracks. For example, at Belmont on Belmont Day they saw an 8.6% seven-million-dollar increase compared to 2017 and a 1.6% increase compared to 2016. Gulfstream also saw increases when comparing 2019 to those same years with a 12.7% increase compared to 2017 and a 22.3% increase compared to 2016.
The only place where I have seen some consistently negative impacts are at the smaller tier 2 and 3 racetracks where it appears the demand for horses seems to be more negatively affecting their racing product. With fewer daily Thoroughbred races, shorter fields and low-quality horses, they show declines almost exactly consistent with those experienced at Santa Anita. Contraction and financial difficulty may be accelerated at smaller racetracks unless they have a high quality state breeding program to supplement their horse population. They cannot compete for quality racehorses with the big tracks, but frankly those smaller racetracks are economically irrelevant in the American racing grand scheme of things.
So, while total American racing pari-mutuels clearly reflect declines in 2019 from last year, those declines are consistent with what should be expected when the romance of a Triple Crown candidate is removed from the wagering scenario. As such, if racing refused to change during the past decades of slow economic decline, no emerging economic trend exists to suggest significant voluntary change will occur. The same “ho-hum” or “boiled frog” attitude our American racing powers have displayed for decades will remain in full force, unless and until consumers drive dramatic economic negativity down to racing's bottom line.
Such is life in the American racing industry.
Dave Astar is a race horse owner, stallion owner, breeder, 40 year business executive, and 50 year handicapper.