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.
This chart reflects a compilation of Bloodhorse state listings related to the Top 30 listed 2019 Midwest Regional Stallions as of June 1st. For example, in 2019 Indiana has 12 stallions in the top 30 in the Midwest region. Those stallion’s offspring have already generated 101 wins, 322 runners, 2 of the stallion’s offspring were Black Type Stake winners, and 529 mares were bred to Indiana state standing stallions in 2018.
Every state wants to improve their state racing industry, and they naturally think high purses are the key. While purses have to be reasonably competitive, many jurisdictions also understand the importance of building their breeding programs around state standing stallions.
Low quality racing products that suppress revenue are defined by the wagering public as small fields, or low-quality Thoroughbred races, or non-Thoroughbred horse breeds, and often less than 10 races per race day. Simply speaking, consumers consume less of a low-quality product than a high-quality product.
For many years I studied breeding programs and quality correlations. Breeding programs which encourage horse folks to bring high quality stallions to a state and keep them there, have higher breeding volumes and higher quality of state bred horses. Both of these things directly translate to higher quality racing products.
Breeding programs which create incentives for mares’ owners to breed to state standing stallions through extended residency requirements, bred backs or state bred definitions which include some degree of state standing stallion requirements for foals, simply have higher quality state bred horses and racing products. Why? Because these incentives result in "immediate" benefit to stallion farms and tend to prove the quality of stallions in the marketplace.
The difference in breeding programs, and results, is extreme.
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!
It's always an exciting day when a 2 year old is doing everything right and our breaking/prepping trainer says he is ready to go to our racing trainer, Gary Scherer. Today our last Minnesota Bred horse, (actually bred in Kentucky at Winstar to Sidney's Candy but foaled out of BJ's Angel in Minnesota at The Osborne Farm), ships up to Canterbury Park in Minnesota.
We are going to run him in Minnesota since being foaled counts as being bred in Minnesota and he gets to run against just Minnesota horses in restricted company for reasonable purses. For example, he gets to run against just Minnesota breds for near $36,000 in MSW races. If he ran at say Belterra, the MSW purse is only $18,000 and he has to beat all state's horses. He could run for more, like $100,000 in MSW races at Churchill or in Arkansas or New York for example but, those are some of the best 2 year olds in the country.
Thanks to Kevin Fletcher in Columbia, KY for prepping him so well, and Alan Bassett for getting him up to Canterbury. Now we can only wait and hope our last Minnesota bred, "Caramel Angel", develops well at the track.
It's that time of the year again when Derby questions come flooding in and some folks have asked me what I mean when I mention fractional time handicapping.
I've had some pretty fair luck handicapping the Derby over the last few years and always recommend folks consider fractional times whenever they are trying to handicap races where horses have not gone the distance. Of course, the Derby is exactly one of those races since none of the three year-olds have ever gone a mile and quarter (the Derby distance).
The illustrated and busy graph contains a solid line representing the fractional speed each of the illustrated Derby contenders ran in their last race. The dotted lines are the mathematical logarithmic trend lines for each horse, with the farthest point on the right representing their estimated last furlong speed in the Derby. I consider this to be the most important unknown when handicapping the Derby.
The three horses my math tells me to pay attention to are Maximum Security, Code of Honor and Cutting Humor. For example, Maximum Security averaged 12.1 seconds per furlong in the first 6 furlongs in his last race, the Florida Derby. He actually averaged slightly less than that for his last 3 furlongs in that race! That fractional pattern produces an expectation that he will get the Derby distance without losing much of his speed.
Of course, pace, weather post position and other factors that have not yet been determined will matter in the final handicapping process but in a year where there is no clear cut Triple Crown contender in my opinion, and the odds will be fairly high on many horses that have a chance, the fractions tell me that certain horses should get attention, while others should be dropped from my process.
I hope this helps explain fractional time handicapping, and with Omaha Beach and Roadster likely going the favorites at 7/2 or so, my top 3 are 6/1, 18/1 and 60/1, a few exotics seem to be in order this year.
My recent blogs and posts regarding racing safety and surfaces, have drawn enough interest to have some of the racing reporters who do not exist as shills for the industry, asking tougher questions. You see, American racing has said forever that safety is paramount while ignoring clear cut actions that can reduce equine fatalities. This shell game just isn't going to cut it anymore with consumers of the sporting/entertainment product. It's gratifying to see data, rather than short sighted profit oriented opinions, winning the day.
I have also been hit with many questions. For example, there are folks who think the racing surface debate is new. It is not! In fact American racing has possessed absolutely clear cut data regarding the safety of synthetics for many years.
After a brief search, since the California Santa Anita equine deaths have caused the current uproar, I thought my readers would find the DECADE OLD linked article very interesting! Here's the link.
Dave Astar is a race horse owner, stallion owner, breeder, 40 year business executive, and 50 year handicapper.