A dates compromise between Calder Casino & Race Course and Gulfstream Park might have been expected after the two South Florida racetracks—located only eight miles apart—began racing head-to-head on weekends last July.
Calder might have seemed most eager for a truce since the Miami Gardens track has suffered the harshest blows during this live meet cage fight. The track’s net revenue for 2013 dropped 44% to $36.26 million, down from nearly $64.57 million in 2012, according to the fourth quarter and year-end earnings report of owner Churchill Downs Inc. Not all of the decline was due to competition from Gulfstream Park, however. A change in Tampa Bay Downs’ status to a year-round racing facility made it eligible to be a host for out-of-state simulcasting. Before this change Tampa Bay could only get out-of-state signals through Calder, which collected the simulcast fees.
Still, Gulfstream Park won the live racing handle war with more than $13.8 million in live on-track handle compared with Calder’s $2.09 million through the end of December, according to figures from the Florida Division of Pari-Mutuel Wagering. The state’s fiscal year begins July 1. For wagering from all sources, Gulfstream Park handled $116.49 million compared with Calder’s nearly $22.7 million.
Despite lower handle and declining revenue, Calder and Gulfstream are going to continue overlapping their live dates. The state deadline to submit racing schedules came and went Feb. 28 with Calder and Gulfstream both set to run live cards Fridays, Saturdays, and Sundays.
Why? One reason may be Calder’s losses on live racing are not painful enough to offset the growth it is seeing on the casino end of the business. When the head-to-head with Gulfstream is viewed through the casino business, Calder holds the upper hand.
Year-to-date figures from Florida’s DPMW show Calder with nearly $45.64 million in net slot revenue through the end of February compared with Gulfstream’s net revenue of $29.7 million. Calder has significantly more slot machines than Gulfstream, averaging 1,198 working machines year-to-date compared with Gulfstream’s 875. Calder also has a higher daily average revenue per machine than its cross-town competitor. Calder averages $165 per day per machine while The Stronach Group’s Gulfstream averages $147.
In CDI’s fourth-quarter earnings report, Calder had net casino revenue of $78.95 million for 2013, up 1% from the previous year and the highest net revenue among all the company’s gaming properties. As long as the racetrack is generating this kind of revenue, it is hard to imagine CDI seeing much incentive to negotiate with Gulfstream Park...unless The Stronach Group decides to buy the property outright.
In the meantime, live racing will continue in some form at Calder because that is how CDI keeps its place in the South Florida gaming market. According to state law, the racetrack must race a minimum of 80 days to maintain its slot-machine license. The company doesn’t really need to invest much in live racing at Calder; just keep offering weekend races to generate some on-track handle, generate content for its online wagering platform, and attract players to the simulcast races.
Calder does fill a niche by providing an outlet for horsemen to make a living, but it is disappointing to see the quality of racing here fade while the sport is trying to raise its profile against other entertainment options. It is live racing, but it’s racing on life support.
