What's Going On Here : churchill downs

Night Fever - By Dan Liebman

cdawahare — Tue, 07 Jul 2009 14:25:00 GMT

(Originally published in the July 11, 2009 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)

In the midst of a stinging defeat for expanded gaming in Kentucky, it was discovered that people will still attend a racetrack - without slots - and have fun doing so. But not for the same old stale product.

Churchill Downs installed a temporary lighting system, and more patrons than anyone predicted turned out to watch three racing cards at night under the Twin Spires.
True, the Louisville, Ky., racetrack stumbled out of the gate, when the 28,011 that attended Friday, June 19, were met by long lines that left many disgruntled. But racetrack officials apologized, promised it would not happen again, and a week later 27,623 poured through the turnstiles to be greeted by improved customer service. Better yet, on Thursday, July 2, a crowd of 33,481 showed up to begin their holiday weekend with Thoroughbred racing.

True, some never opened their wallets to wager, but that is OK. On-track handle was up considerably, but it was also important to attract young people who preferred to listen to music, drink dollar beers, and visit a racetrack rather than a bar or nightclub.

A patron who had a good time not only will return but will encourage friends and family to join him the next time. And, while handle helps purses, a racetrack keeps more from admissions, programs, and beer than from a wager (which has to be shared with other groups), which helps cover expenses and encourages track officials to try other creative ideas.

Some wonder if the success of night racing might lead to a discussion of the Derby being run at night. This would not be done to attract more fans—the physical plant is already bulging on Derby day—but to attract a larger television audience.

While it might not make sense to alter the entrenched Derby, it could make sense to consider night racing for the Breeders’ Cup World Thoroughbred Championships. The 2009 Derby registered a 7.3 national television rating overall, but a 9.8 rating during the 6-7 p.m. race portion of the broadcast. The Breeders’ Cup has a more difficult situation, with racing spread over two days and multiple networks. Still, the 2008 overall rating of .7 is anemic by anyone’s measure.

It is hard not to think more viewers would see the Breeders’ Cup races if they were run during prime time. Just imagine the Breeders’ Cup Classic (gr. I) being aired at halftime of Monday Night Football.

Churchill Downs knows where the lights can be rented.

Get a handle
We were reminded again of the fervor with which Hong Kong racing fans wager when the largest handle there in six years occurred July 1 at Sha Tin. The crowd of 63,369, and more importantly, at 116 off-track facilities and through in-home wagering, bet HK$1.22 billion on the 11-race card, about $157.3 million.
That amount is similar to what was wagered internationally last year on the two Breeders’ Cup cards, when $155,740,327 was bet on 21 races.

The difference is the Hong Kong Jockey Club only staged 78 days of racing during its 2008-09 season, and residents there can only wager legally on horse racing and soccer, as well as play the country’s lottery. For the 78 cards, wagering in Hong Kong was down only 1.3% from a year ago.

In contrast, statistics released July 5 by Equibase showed wagering on racing in the United States fell 16.9% in June, continuing a trend that also saw purses drop 10.3% from the same month last year. For the first six months of the year, all-sources handle on U.S. races is down 10.5%, and purses have dropped 6%.

With high unemployment, and Americans clearly spending less, the fact handle is down only 10.5% may actually be interpreted as a good sign. Like commercial breeders anticipating the yearling sale season, it may be a time in which a negative has to be perceived as a positive.

Shrinking Starters - by Dan Liebman

Blood-Horse Staff — Tue, 12 May 2009 13:55:00 GMT

(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.”

Get a Handle - by Dan Liebman

Blood-Horse Staff — Tue, 09 Sep 2008 14:39:00 GMT

The single most significant number relative to a racetrack’s business is handle. Pure and simple. It not only fuels the second-most-important number—purses—but is clearly reflective of the acceptance of a track’s racing product by the wagering public.

In August 2007, Churchill Downs Inc. announced it would no longer publicly release handle figures for its four racetracks because it did not consider them an important metric of how the company as a whole is performing. Instead, it would discuss its complete financial reports during its quarterly earnings conference calls.

That decision, and the logic behind it, is ludicrous. But now comes an even more preposterous decision.

The Jockey Club Information Systems has discontinued providing The Blood-Horse handle numbers provided it by Equibase, making it more difficult to report racetrack’s meet-to-meet numbers.

Equibase was founded because, prior to its existence, racing’s data was collected by Daily Racing Form, a privately-owned enterprise. Racing wanted to collect and own its data, as it should.

Equibase is a joint venture of the Thoroughbred Racing Associations, an organization comprised of racetracks, and The Jockey Club. To get the business off the ground, The Jockey Club provided $3.6 million in 1990, and the collection of data began the next year. Today, countless tracks provide their fans programs displaying Equibase past performances.

For several years after Equibase came into existence, it had chart callers at racetracks along with those from Daily Racing Form. This meant each race had two data collectors, which caused discrepancies in information. In 1998, the two reached an agreement for Equibase to collect the data; Daily Racing Form shut down its track and field operations.

Until now, there never appeared to have been a conflict of interest between the racetracks and Equibase. But obviously with TRA member tracks owning half the company, it can exercise leverage over what data is made available.

Equibase and Jockey Club officials claim there is a distinction, with racing information being data it collects and handle being data supplied by racetracks. In fact, the tracks are still supplying handle figures, but The Blood-Horse, rather than obtaining those numbers through a previously provided tool, would now, it is told, have to add the figures from race charts.

The Blood-Horse news story in August 2007 announcing Churchill’s change in policy contained comments from company spokeswoman Julie Koenig Loignon. According to the story, though Churchill would not release the numbers, Koenig Loignon noted the figures are public information and available through other sources, such as Equibase and state racing commissions.

They are available from Equibase, if one wants to add up numbers from hundreds of charts. As for state racing commissions, they do not get the information in a timely manner.

Handle numbers are important to handicappers wishing to see the size of pools they have wagered into. But they also are important to owners, trainers, and breeders who wish to see how a track’s business is doing. And they are important to the media, which not only has a duty but an obligation to report statistics and trends to the industry.

In the last week, numbers were released by several racetracks following the close of meets, among them major players such as Saratoga and Del Mar, and a smaller track, Evangeline Downs. Others also routinely provide similar figures.

Tracks that release such information, understanding the industry’s right to know, should be applauded. Those that do not, such as those owned by CDI, despite being a public company and government regulated, should have a board of directors that insists it do what is right.

Equibase and The Jockey Club Information Systems should realize they are not helping the industry by their decision.