Shrinking Starters - by Dan Liebman

(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.” 

14 Comments

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Alfred Nuckols, Jr.

Dan,

Your "Final Turn" addresses the problems facing the Kentucky Thoroughbred industry very well.  Also to be considered in this day and age when money really matters is the fact that "Kentucky-bred" carries very little significance with it anymore.  Breeders are choosing to foal their mares where state-bred programs carry a lot more bang for their buck than Kentucky.  It really hurt to have to explain to a gentleman from New York that New York has a better breeders program than Kentucky in that there are more opportunities for awards, both as an owner and a breeder.

Without the KTDF funds, allowance races would be a real joke in Kentucky, but these are the only Kentucky-bred horses that can really justify racing in Kentucky at the moment.  And, it doesn't benefit the breeder unless they win, as opposed to other breeders award programs in other venues.

At present, being a Kentucky breeder/owner with a stable that includes claiming horses, he would have to consider racing in a jurisdiction other than Kentucky in order to have that horse help the most in offsetting the expenses of training. Claiming purses in Kentucky sure don't do it.

Maybe Mr. Williams will see the error of his legislative ways one of these days!  I love this industry, but the limited opportunities here sure have me wondering, "What if I moved my breeding and racing operation to another state?"

12 May 2009 11:25 AM
Edward

There is something wrong when one industry needs another to fund it. I don't really even understand it. Slot machines not even owned by the track are required to pay money to horsemen? Pretty weird. Its like if my furniture store needed the Mcdonalds next door to give me ten percent of their profits for me to stay in business. The horse racing industry needs to start to learn to stand on its own two feet and become profitable because they are a good business not  because of subsidies and the like. A good place would be a permanent cut in racing days, scaling back the lame claiming game, and an overall decrease in foals bred, and race tracks. Painful, yes but then the game can be profitable for the right reasons. Then maybe we can call it a sport again and people will actually be able to follow it with passion. What the heck does anyone need to see 8 claiming races on a Tuesday?

12 May 2009 9:51 PM
American Dad

The answer to filling fields appears to be offering more turf racing where it is possible or more quarter horse racing where it is not.  Look at fields for turf races and you will see full fields at tracks like Pimlico (no slots) and Churchill (no slots) but also at Delaware (slots) and Penn National (slots).  Additionally, as Dan said, quarter horse racing tends to produce bigger fields, as does Arabian racing at Delaware.  I think the bigger issue than Churchill's short fields is Delaware's.  Delaware Park has slots, is the only thoroughbred track in the (admittedly small) state and competes for horses with 4 states without slots, Maryland, New Jersey, New York, and Virginia.  Their purses are on par with slots rich Pennsylvania (39K for a first level allowance vs 41K in PA at Philly Park) and better than Maryland or Penn National.  Yet, they still have trouble filling races and often have 6 horse fields or 8 race cards with 2 Arabian races.  Is the problem too much racing or is it too few horses?  Is it too much dirt racing and too few turf races or do we need more All-weather tracks like Presque Isle (although Turfway's fields were poor during the winter)?  How about more night racing?  Charles Town, Presque Isle, and Penn National all race at night and fill fields and draw well, although most of those people are in front of gaming machines.  

How about this for an idea: MORE TURF RACING.  Just look at the success of the Atlantic City meet this year for evidence of this.  Full fields, huge increase in handle and crowds, and competitive racing.  Lets encourage racing secretaries to start giving the public and obviously the owners and trainers what we want, more turf.  Extend the turf season to all but the frozen months, use turf facilities like Atlantic City and Kentucky Downs more and bring out the jumps when the weather gets bad.  15,000 people show at Kempton Park outside London on the day after Christmas to watch a 6 race card with 3 Grade 1s over the jumps with no slot machines (They also pay $20 to $30 to get in) so why can't we race on the turf at least one day a week year around?  Turf courses are not that fragile and it is possible for horses to run on soft ground.  (By the way, turf horses statistically have longer careers with more starts and European jump horses have much longer careers, often with time off but still others seem to move effortlessly from jump to flat and back again getting 15+ starts a year).

13 May 2009 6:04 AM
Ex-Pat

Things must change at the grass-root, literally.  The Central Kentucky "farming" community is charging mare owners a minimum of $15,000 per year per head for simple board.  That is not counting what they allow Central Kentucky vets to charge for a foaling mare--about $10,000 per year per head on top of board. So, without figuring a stud fee, a Kentucky breeder will have approximately $40,000 in costs by the time a foal becomes a yearling.  Assuming breeders must now race their own to get out on the investment (because there are certainly not getting it at the auction house), now figure the breeder must pay a trainer $85 per day for one year to be at the races (add another $50,000 per year to get there).  Where in the State of Kentucky will horse owners find $90,000 plus in purse money to create a wash on the investment (don't forget the stud fee)??? The only answer, then, besides getting some help from slots, is that if Kentucky doesn't want to be the former horse capital, these horse "farmers" need to look to neighboring states who still have the knowledge to grow hay and alfalfa, and help themselves and their clients stay in business by saying no to opportunistic vets and other suppliers.  What do you think a steak would cost in Lexington, if they were feeding it $20 per bale alfalfa? I for one am leaving the state so that I can continue in business by paying $4,500 per year per head (that's including vet) instead of $35,000.  Don't even get me started on those who charge $45 per day or more for "sales prep" (read proper care and handling, which they should have been doing anyway at $35,000 per year).  I think the opportunists in this industry are getting ready for a major reality check by running their clients out of business. There are better ways to do this.  In my estimation, Kentucky is the Ostrich Capital of the world.  Let's all get our heads out of the sand and adjust to current financial conditions or say bye to the industry.

13 May 2009 11:41 AM
Richard R

Have to agree with Edward.  Racing in those states where it is being subsidized by alternative gaming is living on borrowed time.  The next generation of pols will see to that when the general population starts questioning those subsidies in light of budget cuts to education, health care and other social programs.  Pony pork will be no more.

13 May 2009 12:23 PM
Karin C-C

For racing to see "Racinos" as the solution to its problems is like a thinking a person in the last stages of kidney failure can get along forever by dialysis.

Racing's problems may at this point be terminal.  I hope not, but one thing I do know:  there will be no solution until all the parties in the industry agree to empower a "Commissioner of Racing" with real authority over racing nationwide.

I've loved racing as far back as I can remember, and have been following the news about the racing industry for over forty years.  One thing is very clear:  the different interests in racing work together as a unified body about as well as a bunch of cats harnessed to a wagon pull together as a team.  

Okay, let's assume that the tracks that don't have slots manage to get enabling legislation passed to allow them.  So what?  Will that stop the free-fall drop in attendance and handle?  I don't think so.  Not in the long run, the way things are going now.  

Racing is one more high-profile breakdown from disappearing from television.  We had a Derby winner this year who for about ten minutes looked like a good thing for racing, a great story; and then the emergence of Rachel Alexandra as a competitor in the Preakness made it seem even greater.  Wonderful prospects for positive news-- until the owner of the Derby winner sleazes off to collude with other owners to try to block Rachel Alexandra from running.  What an absolutely fabulous story to play out to a public that doesn't know anything else about racing!

Racing is dying and slots are nothing more than a way to prolong the dying.  I happen to feel that there is no sport better than Thoroughbred racing, and it kills me to see the way things are playing out.  I believe we need a "Racing Commissioner" with real authority to make changes and promote the sport.  I also believe that the people who could make that happen would rather see the sport die than cede control to a Commissioner.

Sad, sad, sad.  

15 May 2009 1:26 AM
picksixplayer

Part of the problem related to shrinking field size is Churchill Downs grants unlimited stall space to a few large name trainers.  These trainers fill their allotted stall space with numerous two-year olds whom are not ready to run.  RIVER DOWNS with their small purse structure has more than ample field sizes once Beulah Park closes.  

15 May 2009 5:02 PM
noholme

field size comes down to the pool of sound horses and a good place to start to expand that pool would be to:

1. breed a sounder horse and return credibility to the sport. race-day medication does not help. other countries don't allow it. nor should we. medication undermines the faith in our sport, endangers human and equine athletes and gives the sport a huge black eye when avoidable break-downs occur.

2. cut costs to owners. medication adds significantly costs, short and long term. keep vets away from sound horses. and get rid of the ponies. they add cost to the owner, restrict necessary warm-ups for the equine athletes and add little to the experience. other countries don't need them. nor do we.

3. cut the racing calendar. we talk fondly, wistfully about the golden age of racing back to the times of sea biscuit etc. but owners back then spelled their horses for three or four months a year to give them time to rest and recuperate. economics do not support that now. we need fewer races competing for the betting dollar. we need to more co-ordination not competition between tracks and jurisdictions.

4. and, related to the above: make racing a special occasion again, not a year-round grind. there are reasons the most successful meets include short seasons, saratoga, del mar etc.

5. introduce new fans to the sport. promote to a younger demographic. we oldsters might think the lori petty ads are silly, but if they draw young fans, who cares?

6. we need a powerful central racing authority similar to those overseas. we trail the rest of the world in administration and it shows.

16 May 2009 3:36 PM
Racer

I've Been a Fan, bettor and Lover of the game for over 50 years. When I started racing was a seasonal thing in most places . There were many more tracks but many less racing days NO simulcasting You WENT to the Track , took it All In

the sounds , smells , the beauty it was Grand. Now most older people who bet on horses like myself haven't been to a track in 15 or 20 years ! At first I could go to a Off track betting place much closer to my home NO parking fee , No Admission and sit in a nice lounge and bet, watch on Big Screen TVs  . Then came home PCs and betting from Home on line , and the ability to Bet on many different tracks from home  which for most of us old folks is a blessing there's NO way I'd be able to get to the track every week ,The Gas , parking and admission , program expenses would make it a non starter on my fixed income, Now I can watch and bet on line and my expenses are just about zero. And I can't walk too good . So I wouldn't be able to go anyway. Here's my point Horse racing has changed its REAL FAN base is over 60 now and it better concentrate on making it enjoyable , easy , and  accessible for us Old Folks to bet on line, Race Casinos are fine but the REAL Income for Tracks is Betting Revenue. I wish The Young People would get into racing , but they have soooo many choices today unfortunately the Horse racing industry makes very little attempt to reach out to young people the 20 and 30 somethings who could be its future betting base , Us old folks wont be here 20 years from now , and You cant keep horse racing alive with Just 3 Triple Crown races and Breeders cup in Fall , The Game NEEDS New Blood as Far as Fan Base is concerned. So Stop worrying about getting some "Slot' money and start worrying about HOW to get Young People Interested in the Game ! There's a Cable TV channel Outdoor Network 24/7 coverage of ALL Hunting and fishing sports all aimed at the Younger generation  , maybe The NTRA should think along those lines . Instead of those Silly Commercials showing people jumping up and down screaming .  

17 May 2009 7:51 AM
snow

Dan,

I agree 100% with the position of Ex-Pat.  The problem is pure economics.  It is just too expensive to breed and raise a thoroughbred horse.  I know we live in a capitalistic country where you can charge whatever the going rate is but there is no way a breeder or owner can pay the Vet, the boarding farm, the feed company and other expenses and expect to turn a profit or even break even.  So, what you have going on is that people are no longer able to produce and keep thoroughbred horses.  The results of this is showing up at the entry box at Churchill, Hollywood Park and other major tracks.  Unless the industry develops a price structure that allows for the opportunity of success the entry box is going to continue to feel the effects.  I also agree with Karin C-C we need a racing commissioner like the NBA, NFL and other sport businesses.  One office\voice that can promote the industry, regulate the industry and set standards.

17 May 2009 11:56 AM
Trip

I agree with Ex-Pat.  Kentucky and even some farms in California and Florida need to take a closer look at the expense economics, the rate of return for the investor/farmer. Ex-Pat is right on the money ... literally.  Stud Fees, boarding, vets, and all will need to take a haircut, in order for investors to take the gamble ... If "Perfect" horses are the only ones selling for 1/2 the stud fee ... well, one doesn't need a calculator.

17 May 2009 5:33 PM
Sodalime

Ex-Pat is exactly right. After 35 years of breeding, selling, and racing I had to get out of the business because I couldn't afford it.

The points about sounder horses, less racing, and central voice (ala racing commissioner as per Karin CC) are also important to Ky's TB capital but more importantly to TB racing period.

The fact is that TB racing is becoming irrelevant in the US. That will continue without major changes.

17 May 2009 9:34 PM
Scott

It's not that there is a shortage of horses; but a shortage of owners.  More owners would bring more horses to the gates.  We need to treat the owners better, and need to entice new ones.  

17 May 2009 10:14 PM
Don

Delaware Park cut racing days this year and they have slots. Maybe things will change now that they will be getting gaming tables, in about 6 months. Plus sport betting.

17 May 2009 11:53 PM

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