Can the Texas Thoroughbred industry take any more bad news? After an 18-year commitment, the Fasig-Tipton sales company announced it would cease conducting auctions in the Lone Star State. The Kentucky-based auction house used to hold three auctions annually, but those were reduced to two about four years ago.
The 2-year-olds in training sale, held most recently March 31 at the sales pavilion adjacent to Lone Star Park, has been the brightest light on the Texas calendar. Results for this sale, however, have continued to disappoint, even to the end. The sale-topper for the last juvenile sale run by Fasig-Tipton reached only $75,000, the first time since 2003 that the top-selling horse failed to reach six figures. The average price dropped 22.6% to $17,605, and the median fell 13.3% to $13,000. The buy-back rate exceeded 33%.
“It was a painful decision for us because of the emotional commitment we’ve made to those sales and that market,” said Terence Collier, Fasig-Tipton’s director of marketing. “It really is not a big deal for a sale company to keep a presence in a market and be willing to lose money with the hope of a turn-around, but our staff there did not see any light at the end of the tunnel. There have been a lot of vigorous attempts with the legislature just to allow racing to hold its own, but it has never come out on the right side.”
Texas shares common ground with Kentucky. Both are surrounded by states with competing racetracks that can enhance their purses with revenue from alternative gaming. Kentucky only recently began clawing its way toward a level playing field with the help of historical racing machines, an electric pari-mutuel game that uses the results of previously run races to determine a winning outcome. Instant Racing is providing some relief, but the games still don’t provide the same financial muscle as slot machines.
Instant Racing was developed at Oaklawn Park, where electronic gaming (such as video poker or slot machines) was also once frowned on. Texas tried taking the Instant Racing route toward parity last year, but a district court judge shut the door in November. Travis County District Court Judge Lora Livingston ruled the Texas Racing Commission exceeded its authority when it approved rules allowing both horse and dog tracks to install Instant Racing machines.
The court decision is being appealed, but Mary Ruyle, executive director of the Texas Thoroughbred Association, is not expecting progress any time soon.
“It will take a long time to determine anything through the courts, and whenever we have gone to the legislature to achieve that level playing field, we have been told ‘no more gaming,’ ” she said.
The TTA isn’t ready to concede the commercial market, however. The association expects this week to announce a new auction partner that will conduct a yearling sale Aug. 24 and a 2-year-olds in training sale next year.
“It is not as good as it used to be or as good as it should be (in Texas),” said Ruyle. “But as the state’s breed association, we are committed to having an outlet for people to sell their horses. We still feel the market has potential.”
The only glimmers of light on the horizon are two pending bills in the legislature that would allow Texas racetracks to recover additional money they put toward purses through a tax rebate. The main sponsors of this effort are Rep. Roberto Alonzo (D-Dallas) and Sen. Kel Seliger (R-Amarillo).
Few states are as closely associated with the horse as Texas, so the expectations were understandably high when pari-mutuel wagering was reinstated back in 1987. It is sobering now to see racing struggle here and even continue to lose ground in an environment where it should be thriving. More unsettling is the apparent lack of awareness by state leaders of the racing industry’s important contributions to land management, agriculture, and jobs.
Such continuing disregard is the worst news of all.