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Subsidize or Downsize - by Robert Laurence

I don’t gamble. Shoot, I don’t even fill out a March Madness bracket. I do follow the games to see how the seedings play out. The win-or-go-home format makes irrelevant that great artifice of the gambler—the point-spread.

I have no high-minded, moral principle against gambling; I just never caught the bug. I recall playing golf in my college days, when someone in the foursome said, “Let’s put something in the pot to make it interesting. ”Make it interesting? How much more interesting than trying to run a 7-iron shot against a crosswind onto a summer-hard, backward sloping green? Any more interesting than that, and I’d collapse under interest-overload.

I don’t bet, but I do like to watch Thoroughbreds race, whether across the south pasture, running for the sake of running, or around an oval for a handsome purse. Has there been a better match than Curlin versus Rags to Riches, head-to-head, eye-to-eye, for the length of the stretch at Belmont? Pick your sport, any sport, and beat that. Maybe, for some, racing is more interesting if the mortgage payment is on War Pass to show, but for me, the running is enough.

I also don’t know much about Kentucky politics. I have no opinion on why Steve Beshear disappointed the horse industry. I have no idea why some Kentuckians want to amend their Constitution and others don’t.

OK, so I don’t gamble and don’t know much about Kentucky. Still, maybe the observations of such an outsider can shed some light on the failure of the Kentucky casino bill. Here goes:

Horse racing used to have a virtual monopoly on legal gambling. It still does in some states, but by and large those days are gone, never to return. For good or ill, we live in a slot-­machined country. And the truth is just this plain—for the heart and the buck of the typical gambler, horse races lose out to slot machines. Don’t ask me why, but people would rather drive to Indiana and play the slots than stay in Louisville and play the horses.

Patrons at Oaklawn will sit for hours at slot machines, betting on the outcome of a previously-run horse race, and will hardly bother to walk outside and watch the live races.

And if our game loses the gamblers in a match with slots, can it win the hearts and dollars of the pure sports fan? Sadly, no. Betting aside, most Americans care about just two races in the spring. Three, if the same horse wins those two. A few will tune in to watch a day’s worth of championship racing in the fall, though getting them to watch two days’ worth is problematic.

There are many reasons for this. First, the sport is still packaged first and foremost as gamblers’ entertainment. Second, our heroes and heroines don’t stick around long enough for the fans to know them. Curlin versus “Rags” was a once-in-a-lifetime event. Real Quiet versus Victory Gallop was three times for a generation. Affirmed versus Alydar, three times for a century. It’s as if Magic and Bird had played one game against each other in 1979 and never set foot on the same court again. Or Ali and Frazier had fought once and then retired to open a restaurant together. Connors versus McEnroe, again and again? Forget it.

If I’m right, and we lose to the slots for the gamblers and to NASCAR for the racing fans (God knows why; maybe it’s the hats), then it looks like one of two things is going to happen—either we face a downsizing of the Thoroughbred industry or we need a subsidy.

The gaming industry in today’s market is so darned profitable that they can give the state a cut, subsidize the Thoroughbred industry, and still run out of places to put the money they have left. What do they get? An air of respectability, maybe, and our industry’s fabled influence with legislators. What do we get? A direct conduit from the slot machines to race purses, thence to owners, thence to trainers, jockeys, breeders, and the rest of us hangers-on. There may even be some support for the retirement operations.

So, a subsidy, or we downsize to about five or six tracks, nationwide, and maybe a thousand new foals a year. I have nothing against subsidies. Lots of industries get them, directly or indirectly. But let’s be honest enough to admit that that’s what we’re doing—getting money that, if the market were left free and unregulated, would be going elsewhere. Let’s drop the smugness and sense of entitlement. We aren’t owed a cut of the slot machine take. We’ll turn the clubhouses into casinos, and run races that will barely be noticed by the players. We’ll take some of the money poured into the slots in order to keep our industry going. And we’ll hope that it will be enough.

It would help to say “please” in advance, and “thanks” at the end.

12 Comments:

"First, the sport is still packaged first and foremost as gamblers’ entertainment."

Not sure what you are watching, bro. All I see is human interest crap and everyone hoping for a dead horse to report on.

Perhaps if racing actually was packaged as intelligent gambling, you'd see some improvements.

Steve D 24 Jun 2008 10:50 AM

The gambling aspect, betting strategies and having fun need to be accentuated.

Hank "The Hammer" Goldberg's and Kenny Mayne's gambling strategies need to be explained better. Why an exacta bet with a win back up bet?. What is the strategy for their Pick 3 selections? Accentuate how much money you can win with a huge trifecta, superfecta, Pick 6 carry over, etc.

I've had my fill of hearing about Kent Desormeaux's sons health issues, Rick Dutrow's substance abuse, murdered girl friends, sleeping in tack rooms, etc.

Show people how you can make some money and have some fun. That's what the casinos sell.

Frank D 24 Jun 2008 3:07 PM

If horse racing were a real business where market forces determined who stayed in business and who left, then the handful of tracks' scenario is what we would have today.  The racing product stinks.  Short fields.  Meds to keep sore horses in training.  More meds to keep horses with breathing and respiratory problems in training.  Meds to make horses grow muscle and add weight.  Medication becomes an important handicapping factor.      

What's the figure these days of the number of owners who lose money from their racing operations:  80%?  So the subsidies are already in place.  Subsidies from slots, subsidies from special state supplements to purses, subsidies from "appearance fees" for horses that don't figure in the purse distribution, subsidies from owners who are pursuing a hobby or like the status achievement from owning race horses, subsidies from tax write-offs for losing operations, subsidies from customers who have their winning proceeds reduced by the arcane practice of breakage not to mention the grandest subsidy of all, the obnoxious takeouts that are being levied on bets.

So racing is already subsidized to the point where it loooks like a welfare operation, and it continues to decline.  Like I said before, "If racing were a real business...."

Richard R 25 Jun 2008 8:22 AM

Racing subsidy? After racing has squandered it's greatest horses by sending them to the breeding shed too soon, slaughters or abandons the losers, gluts the market with inferior/weak horses, drugs them and then races them into the ground; what is the subsidy for? Back in the day of racing greats, the wealthy owners bred for sport. Racing was not a business; it was a pastime. The goal was to breed a horse that could run, and run , and then run!! Stallions were personal property not commodities. Breeding the racehorse was an art in the day of Federico Tesio who bred TWO undefeated horses of several races (1. Nearco-line of Secretariat and 2. Ribot - line of Arts & Letters/Key to the Mint, broodmare line of Barbaro, etc.) Tesio was a man of modest means but possesed a boundless love and knowledge of the thoroughbred.

Subsidy? Gimme a break!

ofelia 25 Jun 2008 5:33 PM

for the last fifty years most of the sport has hsd NO EXPOSURE OR REEL PROMOTION...that's about to change...Long Live The King!!!

Bellwether 26 Jun 2008 2:31 AM

Horse racing has never been marketed the right way and will not be with Waldrop in charge at the NTRA.In a recent interview on a PBS broadcast the guy could not spit out the right answers for the triple crown purses.If the handle keeps rising (include what is going offshore )how can the sport be dying as they keep saying.Get someone who knows what they are talking about in charge and take care of the bettors.

Michael E.Moneta 26 Jun 2008 12:54 PM

 The racing industry in the Commonwealth of Kentucky must be led by the stupidest people on the face of the earth. In their pursuit of the almighty dollar they have told the world that they could care less about the most important part of the equation and that is the fans (customers). The political leaders could not make everyone happy so they decided to again do nothing about the gambling issue and dollars that could be used in Kentucky to subsidise racing and help with the budget shortfalls are now going to other states where they are tickle pink and laughing all the way to the bank. They will even send busses to pick us up. Then you have Churchill Downs and the Kentucky Horsemen along with the Horsemen in Florida and other states who in their quest for more dollars have told all the racing fans (customers) that they could care less about them and they don't want their business and they can go elsewhere to play. Hey, send your money to New York or California we don't want it. Briliant don't you think. I guess being ranked 48th or 46th in education for so many years really does show.    

J.D IN OWENSBORO KY 26 Jun 2008 11:59 PM

Mark my words, the NTRA will not be around in another 2-4 years.  Hopefully the industry will make a national office with the power to regulate things, but that is wishful thinking at this point.  Horseracing is going to downsize itself and not even realize it until it is too late.  The powers that be want to hold on to that perceived power and will damage the sport even more so then it already is.  The industry is really good at giving lip service, they are all talk and no action.  That will not change, even with Congress asking questions.  If the horse industry is to stubborn (or stupid) to help itself, then it is time to put it out to pasture and leave it to die.

Bill 27 Jun 2008 11:06 AM

I have no problem with horse racing receiving subsidies from casinos and slot machines. Considering the economic benefits that racing provides to the states and provinces that it is conducted in as well as the taxes the  governments take out of the handle, property taxes from farms, taxes on wages and purse earnings. It shocks me that they aren't coming with ways to help horse racing thrive. Granted the industry does shoots itself in the foot more often than not, just seeing the news of Dutrow and Assmussen with their positives is great example. Some simple solutions to some of the problems with horse racing: Problem; Stars being retired after very brief career-Solution; Foals can only be registered with the jockey club if they were conceived by parents 5 years of age or older. Problem: Illegal Drugs; Harsh penalties for the Trainer and the Owner(s). Problem: Weak, Sappy TV coverage on big days. Solution: Get some serious horseplayers involved in the production, show more races, show past performance replays of contending horses, have higher expectations of the audience knowledge of the game. If the networks treated the NFL the same as they do horse racing they'd have half the audience. Who would watch?

wiseguy 27 Jun 2008 4:56 PM

Horse racing will die if subsidized.  Why?  Because Horse Racing must stand on its own as a sport.  We in Maryland are looking to vote on slots to support education and horse racing.  And if tax revenue goes down you cannot tell me that the citizens of our state will not clamor to reduce the horse racing subsidy in order to maintain education spending.

Horse racing needs to consolidate and organize better.  We need a group of 12 or so tracks to be the "major league" for horse racing.  We need to consolidate purse money into bigger purses and have bigger fields chasing these consolidating purses.  By having some national organization running things, we can get real TV coverage and revenue, plus the gamblers worldwide will love the better (bigger fields) gambling product.

Finally, the idea of horse racing supporting agriculture is overstated.  Rural economies do much better when there are diversified farms and businesses in the area producing a wide range of products.  The high margin business in farming is now locally produced (and sometimes organic) food products for the new type of consumers.  Horse farms are part of the shrinking monoculture in the rural economy.

So I cannot wait until we get a commissioner of racing, an organized "big league" and racing stars that race until they are 5 years old.  Subsidies won't do this.

John in Baltimore 29 Jun 2008 9:15 PM

Slots rode in on the horses backs, and now the tracks want to shoot the horse.  At Charles Town Races and Slots, you can get a free drink on the slot side brought to you but have to wait in line and pay for a drink on the racing side.  There seems to be an active policy by track management to frustrate and downsize the horse racing (it is almost impossible to go to the racing side without going through the slots and the two are separated physically).  In Delaware, one can play the slot machines and watch the horses simultaneously.  

Beware the track management who is granted a quasi-monopoly on gambling and its greed is never satisfied.  Instead of taking from the tracks share of funds (42-60% depending on legislative kickbacks to the tracks) to fund vital infrastructure needs, the politicians keep carving away from the racing share (5-14% depending on time of year / legislation).  The political contributions to all politicians in the state from track management, indeed, control this legislative history.  The table games bill was passed by local referendum in 3 of the 4 counties in WV, not Jefferson where Charles Town is located despite the track spending $5 million to persaude voters what a good deal it is.  The token gesture of crumbs from the pie was not well recieved in addition to the half-truths and downright falsifications of benifits to the localities and horseman.  WV granted track management the highest percentage of table games revenue in the country in addition to other gross inequities to the localities and racing industry.  The state is already dependant upon gambling revenues for basic budget needs (not a wise policy depending on risky revenues with competition immenent to affect the total handle).  

WV might not be so obsequios to track management interests and more concerned about its citizens if slot and table game licensees were not authorized to contribute to politicians.  Corruption in this state is nothing new, but painfully obvious.

joe 30 Jun 2008 11:14 PM

Great article, Mr Laurence. I was on a plane to Costa Rica for a two week vacation and must have read this article a dozen times. Your right how did Nascar ever run on by horses? Talk about watching paint dry. Problems with horse racing is itself, When guys like Dutrow speak, steroids, betting big on his horse, John Q Public takes this as horse racing is not on the up and up, I asked a few friends why they didn't bet on horse any more and that was the response I got, they feel a better shake at the slots, so till we clean up our image, we better take everything we can get. One person said to me isn't it strange trainers of top older horse,top three year old, top filly, all got positive test and you want me to bet on them he said.I had no responce, as he prceeded to bet $25 on a blackjack hand.

john 12 Aug 2008 9:24 PM

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