(Originally published in the May 16, 2009 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)
Speaking to shareholders May 7 via conference call, Churchill Downs Inc. president and chief executive officer Bob Evans said, “The solution for tracks without slots is to cut purses, to cut races, and race days, or to cut all three.”
At its signature track, Churchill Downs in Louisville, Ky., the company has already cut purses and races, and a published report May 10 indicated the track would request to reduce its live racing schedule from five days a week to four for the remainder of the meet that runs through July 5.
The fact is many horsemen are electing to run instead in states such as Indiana, West Virginia, Delaware, and Pennsylvania, where Thoroughbred purses are augmented by revenue from other forms of gaming.
On May 9, the Saturday following the Kentucky Derby Presented by Yum! Brands (gr. I), Churchill had 62 starters in its 10 races, an average of 6.2 runners per race. During the first 12 days of the track’s spring/summer meet, the average number of starters per race was 7.55; excluding Kentucky Oaks and Kentucky Derby days, the number drops to 7.31.
Also on May 9, the average number of starters per race was 7.83 at Charles Town Races & Slots in West Virginia, 7.11 at Delaware Park, and 8.11 at Indiana Downs (for its nine Thoroughbred races; the track also ran three Quarter Horse races with 10 starters in each event).
It has always been the case that every starter translates to higher handle, which in turn equates to more dollars for purses. But in today’s pari-mutuel world, it is even more important to have larger fields because more than 80% of dollars are bet off-track. In the days when on-track attendance mattered most, a bettor might not be intrigued by a four-horse field (Churchill had two four-horse fields May 9) but still might wager on the local product. Today, there simply are many more options; thus, a bettor who sees no more than six starters in a track’s first five races—as was the case May 9 at Churchill—may simply turn away and play another track’s races.
Unfortunately, Churchill Downs does not release its attendance or handle figures, but even without the numbers, it is easy to assume that handle is down significantly.
Kentucky Gov. Steve Beshear’s latest quote about the horse industry, repeated often in the past few weeks, is, “What we don’t want to happen is to become the former horse capital of the world. This is our signature industry, and we will aggressively protect it. We will remain the horse capital of the world as long as I am governor.”
Kentucky’s racetracks have been actively seeking slot machines at their facilities for more than a decade. Looking back 10 years, on May 15, 1999, the Saturday following the Kentucky Derby saw 10 races run at Churchill Downs with 8.8 average starters per race. On the same date five years ago, the 10 races run on the third Saturday of the meet saw an average of 8.2 starters per race.
Like most other states, Kentucky has a budget crisis. Later this month, the new revenue forecast will be unveiled. Yet despite the fact slot machines at Kentucky’s racetracks would protect the state’s “signature industry” by increasing tax revenue and saving thousands of jobs, another legislative session has come and gone without the passage of a bill to aid the men and women who make Kentucky famous for its horses.
Budget forecasting is a tough job in any economy, but it is especially hard in light of today’s economic conditions.
Without slots, one wonders what forecast the horse industry in Kentucky would project for the next five years.
Even without slots, Kentucky may not become, as the governor says, “the former horse capital of the world.”
But, without his support, Kentucky horsemen will help see to it that Steve Beshear becomes the “former governor of Kentucky.”
