They say actions speak louder than words. The public is taking action by wagering less on horse racing. And those actions are speaking loudly.
Data released for the third quarter of 2008 reveals that handle in the United States and Canada dropped sharply, 9.85%, during July, August, and September, and for the calendar year, is off 5.75% compared with 2007.
During the three-month period, total wagering was $3,489,171,872, compared to $3,870,348,046 during the third quarter of 2007. For the first nine months of the year, patrons wagered $10,754,907,211 on races in North America, down from $11,411,642,388 during the first three-quarters of last year.
Officials are quick to blame the economy, and why not? Global financial markets are in turmoil, while closer to home, the Dow Jones Industrial Average plummeted during the week of Oct. 6.
As Bob Evans, president of Churchill Downs Inc., pointed out, gambling involves discretionary income. People have to buy gas and groceries, but they do not have to wager on horse racing.
“People don’t have to go to the track,” Evans said.
True, but is it that people don’t “have” to go, or that fewer people “want” to go?
Alex Waldrop, president and chief executive officer of the National Thoroughbred Racing Association, indicated more than the economy is at work.
“Our industry’s difficult year continued during the summer as a harsh economy and other factors continued to negatively impact business,” Waldrop said.
Consider that the third quarter comes after the Triple Crown, which this year featured a Kentucky Derby Presented by Yum! Brands (gr. I) in which the winner, Big Brown, was admittedly on steroids and the second-place finisher, Eight Belles, tragically broke down and was euthanized.
Make no mistake, the struggling economy is a big factor, but our customers have told us they are wagering less, or not at all, because of such issues as the use of medications, wagering integrity, and safety concerns.
So it is the perfect storm for the fourth quarter of the year. First, people are upset with us as an industry. Second, they have watched Congress deal with a bailout package for Wall Street, seen the Dow Jones Industrial Average shrink 2,000 points in a week’s time, and are nervously and anxiously awaiting the outcome of a history-making presidential election.
The industry can work together to alleviate the public’s concerns over a myriad of issues, but dealing with a battered economy is much more difficult to address. All the promotions a racetrack’s marketing minds can come up with will not work when people are worried about the cost of living and the wild daily market fluctuations that determine their retirement funds.
A sign of the times is occurring now at Keeneland, the premier meeting of the North American racing calendar in the fourth quarter of the year. If any track was immune to the economy, one would have guessed it was Keeneland. One would have been wrong.
A local television weatherman said the weather in Central Kentucky Oct. 4-6 was the best it had been for an opening weekend of the Keeneland fall meeting in 30 years. So, when Saturday’s attendance dropped from 24,480 to 19,535, it was evident the economy and “other factors” were at play at Keeneland just as they had been during the summer at Del Mar and Saratoga (total handle down 7% and 10.3%, respectively).
For the first seven days of the Keeneland meeting, which included two weekends, attendance was down 2.5%, on-track handle dipped nearly 11%, and total handle dropped 17.4%. Per-capita wagering on-track this year was $81.23, compared to $88.97 in 2007.
Keeneland’s rich purses attract top horses, so when total wagering on Keeneland for a week—a week that included 11 stakes, six of them grade I—declines from $62.2 million to $51.4 million, it is time to take note.
Actions speak louder than words. Our customers are speaking.