After several weeks of what appeared to be a downturn in pari-mutuel revenue, things seem to have bounced back over the Memorial Day weekend. Almost all tracks showed a 2019 Memorial weekend uptick compared to 2018. For example, Tier 1 tracks like Gulfstream reflected an over 20% increase worth over $5M in additional total revenue, while Pimlico showed an over 12% increase and Belmont reflected a more modest increase near 3%. Smaller Tier 2 and 3 tracks did not fair quite as well though some, such as Prairie Meadows in Iowa showed an over 15% increase. This information is publicly available on Equibase, though it is important to note that certain tracks do not reflect either attendance or pari-mutuel revenues in their charts.
These increases are certainly good news considering prior weeks have reflected fairly consistent year over year drop offs, which I believe was due to nationwide media coverage of Santa Anita fatalities and the way American racing responds to such issues. Consumer attitudes may also have been affected by the recent one-sided HBO episode on Real Sports which highlighted fatalities and certain distasteful practices associated with racing in America.
While American Racing needs to change and adopt “best known worldwide safety methods” related to racing surfaces, race day medication, rule structures, medication protocols and centralized national control, I find the hypocritical media is much more interested in creating dramatic stories than offering honest and balanced views of issues. For example, while HBO elected to negatively slant their Real Sports episode, they made absolutely no mention of their foolish “Luck” drama cancelled many years ago after a spate of equine fatalities during the filming period. The three horses that were reported to have died during the filming time frame reflected a mortality rate several times higher than any fatality rate American racing was being criticized for on the HBO’s Real Sports episode!
Though the long-term American racing pari-mutuel revenue trends are not positive, and I still think that American racing may be at a tipping point related to reinventing itself, the long-held activity of racing in America will continue for many years at Tier 1 levels, and it may have only been temporarily affected by recent negative media coverage. The next few weeks and months will tell much more, particularly if every racing fatality results in a media story, and American racing continues to embarrass itself by paying only lip to safety measures already proven to be more effective in other countries.
A couple weeks ago I mentioned the possibility of statistical sampling to get an early view on the pari-mutuel revenue impact associated with the terrible press Thoroughbred racing has been getting in America. Proper sampling techniques provide trend insight into issues long before many people even know issues exist. As a result, I conducted a study on my own, utilizing publicly available pari-mutuel data.
I compared available data (certain racetracks do not publish data) by racetrack and exactly compared daily pari-mutuel revenues from this year to last year making sure only same days were utilized. In other words, the second Saturday in May this year was May 11th. The second Saturday in May last year was May 12th. These two comparable days were utilized, as were all the others studied. For example at Pimlico, where the Preakness will be run this coming Saturday, a $1.327M total handle was secured last Sunday. A $1.891M total handle was taken in on the same comparable Sunday last year. (A 30% drop off on that particular day.)
In aggregate, utilizing comparative days at the same racetracks as indicated, I am finding what I expected. There has been a steep decline in pari-mutuel revenue over the last month and this decline seems to have been exacerbated by the disqualification of Maximum Security in the Derby. I have found a 12.2% decline in total revenues where it can be comparatively measured!
Trouble has been brewing in racing for years and that's why inflation adjusted pari-mutuel revenue is only 60% (about half) of what it was just 15 years ago, but these double digit one year declines have never been seen before. Maybe this is temporary but I wouldn't bet on it.
In closing, facts are stubborn things but apparently not as stubborn as the "Ancients" who control American Racing and refuse to re-engineer their product to conform to consumer desires!
Dave Astar is a race horse owner, stallion owner, breeder, 40 year business executive, and 50 year handicapper.