Shifting States - By Evan Hammonds

(Originally published in the June 26, 2010 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)  

By Evan Hammonds

By Evan HammondsIt was roughly 20 years ago when the migration from wagering on track to simulcasting began in earnest. The rule of thumb over the last few years has been that at least 80% of today’s handle comes from bettors
located somewhere other than at the host track.

As noted in the first two legs of our feature series on handle, we are currently seeing another seismic shift in the way people bet on horses, with more and more wagering taking place via advance deposit accounts.

Personally, I participate in all three platforms: wagering at the track, at my local simulcast outlet, and through an online wagering account. But let’s face facts here—technology has changed the way the world does business. Commerce is just a mouse click away.

Not only is this having a sizable effect on the bottom lines of racetracks and Thoroughbred owners, it’s also having a major impact on the Thoroughbred breeding industry and where future generations of our racehorses will be born. Despite expansion in ADW handle, the revenue from casino gaming is doing the most to grow purses. It’s this “supplement” money that is causing the biggest shift in the Thoroughbred population.

The news out of California that Marty and Pam Wygod are selling their River Edge Farm and dispersing their Cal-bred stock is discouraging. Farm manager Russell Drake’s comment that “opportunities for the Wygods’ breeding operation are far greater in Kentucky” comes at a time when many have already bailed on the Cal-bred program. One look at The Jockey Club’s Fact Book for 2010 and last fall’s Report of Mares Bred shows the Wygods weren’t the first to either move on or get out of the business altogether in the Golden State.

While last fall’s Report of Mares Bred reported a drop of 13.5% of Thoroughbred mares bred in 2009 compared to 2008, several states—not surprisingly states without slot-enhanced purses—saw much steeper declines.

In 1998, 3,229 foals were produced in California, or 9.8% of the North America population. The 2008 foal crop in the Golden State represented 9.0% of the foal crop. While that may not seem like a great drop, it’s the tip of a trend. The number of mares bred in California in 2009 compared to that 2007 group (foals of 2008) fell 37.4%, from 4,703 to 2,946. In addition, the number of stallions in California fell from 321 to 201—that’s also a decline of 37.4%.

Florida, the second-leading state in producing Thoroughbreds—behind Kentucky and ahead of California—has experienced a similar fate. From 2007 to 2009, the number of stallions has fallen from 252 to 155 (a drop of 38.5%) and the number of mares bred has slid from 6,382 to 4,041 (down 36.7%). Maryland’s foal crop has fallen more than 50%.

It’s little wonder Louisiana’s foal crop has grown more than 100% from 1998 to 2008, according to the Fact Book. Slots revenue has enhanced the state-bred program that is now pulling in mares from Florida, Kentucky, and Texas. In 2009 more mares were bred in Louisiana than in California.

Pennsylvania’s program grew more than 50% from 1998-2008, and the percentage of mares bred from 2007 to 2009 rose 36.7%.

New Mexico-breds represented 1.3% of the Thoroughbred population in 1998;  in 2008, they made up 3.3% of the breed while racing for much bigger pots from Ruidoso to Sunland Park.

Breeders in Texas face a triple whammy as they are surrounded by states—Louisiana, Oklahoma, and New Mexico—with gaming revenue as part of their racing programs.

This shift is creating a whole new set of haves—states such as Louisiana and Pennsylvania—and have-nots—historically significant states such as Texas and California.

While the growth in purses from casinos is welcome for haves and have-nots alike, don’t think for a second that it’s best for racing in the long run. For racing to prosper, we need to take this opportunity that the casino revenue affords us and figure out a way to have real growth through ADW.

Evan I. Hammonds, Executive Editor

6 Comments

Leave a Comment:

ken woodall

Most of racing's problems or percieved problems are basically 2- Racing is a closed society and overly complicated. The majority of players are still coming into racing through older relatives- racing waits for the fans to come to them. Slots is a perfect example, coming to the track for social interaction and simple gaming. No one knows the tracks, OTB's, or websites are there unless by 1-on-1 invitation. Whether online or at the track, Win is by fractions, exotics are by will-pays, and PP's and charts are by $1.00 odds. Racing sites have several different definitions of what a "length" is, none the same as the medical definition. The only way to grow racing is to go out and bring in new customers, with discounts, contests, and networking of players and owners. make all aspects of racing easier and not buried in false myths.

22 Jun 2010 4:16 PM
mallan

If racing is going to grow a fan base, they need to look to all the other major sports.  Back in the 40's when baseball, football, and racing were big they were all played on afternoons.  When are most baseball and football games played?  At night - they are thriving....racing, still in the afternoon.  How is the average fan in today's economy going to get to a 1 pm post time?  And that doesn't even get to the take-out, purse structure, wagering menu.

I have become much more "active" as a fan through online accounts, which enable me to handicap the night before and make investments before leaving for work - then I can watch the replays.  Would I rather see live races and be there?  Of course, but racing typically runs in the afternoon when we are at work.

22 Jun 2010 11:17 PM
J S S

After reading the comments onthis touchy subject it is clear that racing MUST change its entire approach to the public. Since the states where the local racing industry are benifiting from casinos revinues are able to compete with the older established racing venues it is time for the industry to look at its entire method of opperation.

 I fully agree that night racing would bring out the betting public during the week but daytime racing on the weekends should remain. This is not a simple problem but one that NRTA and the other associations MUST address. the powerful corporations that control the major tracks in this country have to stop saying it our way or the highway to the public, andlisten to the racing public if they think there is going to be an industry at all.

24 Jun 2010 4:50 PM
Harold B. Gross

If Nite racing is the " Answer" the standardbreds should be thriving, which they are not. Without the Simulcast thoroughbred action they would be closed!

In fact here in Florida, thoroubreds can't run after 7PM, that is Law.

28 Jun 2010 12:11 PM
running rebels

ken, mallan, & jss  are right on with their comments but the horse racing elites are similar to or president they want what they want and the HE--  with every body else. They will destroy ever thing rather than adjust.    

28 Jun 2010 9:35 PM
DENNIS RODGERS

Horse Racing today is better than it has ever been for the player. From the comfort of my desk I can down load the DRF and wager on a multitude of venues from coast to coast.Not to mention I can view them live.

From my point of view it is a more profitable approach than driving to the track and paying the admission fees etc. I am $100 ahead by staying home. Also I don't have to deal with all the distractions at the track that take away from my handicapping concentration and profits.

The real losers in racing today are the track owners who refuse to make their programs available to customers like me. I don't get it, but then again I don't care because I just "go" somewhere else.

If you are set up right and it does take some effort, there is absolutely no downside to enjoying the races in the comfort of your own home.

31 Jul 2010 9:53 AM

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