Racing Industry

This page will be used to explore some of the issues confronting the industry and the sport.
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Eric Mitchell - BloodHorse: Camel is in the Tent

Beyer - DRF: Slots, Racing Marriage on the Rocks

EUROPEAN STYLE CONDITIONING

Posted on by bpressey

Out of my 3 Derby picks, 2 exited the race injured. Do I get some kind of award for being the worst handicapper? I really only handicap once or twice a year, and we are all the better for it when I sit on the sidelines. Back to work.  Read more...

Is Incremental Change Enough? - By Nick Willet


BloodHorse - Industry Voices

A recent article by Tom LaMarra noted a third consecutive yearly drop in gross purses due to declines in handle  (The Blood-Horse of March 12, page 616). The percent change bar graph accompanying the article shows a large number of positive green bars followed by three troubling negative red bars that coincide with a steep recession that began late in the last decade. Given the concerning numbers, one would hope as the country’s economic outlook improves the outlook for racing would improve as well.  Read more - Source

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RCI: Phase Out Use of Drugs in Five Years

by Tom LaMarra - BloodHorse.com
Date Posted: 3/28/2011 5:17:44 PM   In an announcement that figures to meet with disagreement with some horsemen's groups and perhaps others, the outgoing and income leaders of the Association of Racing Commissioners International have called for a five-year phase-out of equine medication in horse racing.  Read more...

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Pope:  Reward Horses that Generate the Most Handle with Higher Purses

Fred Pope - Feb. 3, 2011 - BloodHorse.com

In marketing terms, Uncle Mo is a brand. Based upon the success his owner Mike Repole had with Vitaminwater, few people know better how to develop, promote and protect a brand. But it is hard to protect the brand that is Uncle Mo in Thoroughbred racing.  Read more...


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The Rise of Bet Takers in North America
by Fred Pope
July 7, 2010 - Orig. Pub'd in July 10 issue of BloodHorse magazine

Excerpts:
France just banned Betfair, the popular betting exchange. Rude? No, the country has always protected its horse industry. French racing doesn’t own a white flag. No outside bet takers are allowed.  ......Then Congress passed the Interstate Horseracing Act of 1978, allowing offtrack wagers across state lines. It should have skyrocketed the sport. Instead, it opened the door for bet takers in North America.  ....Offtrack bet takers at other racetracks, offtrack betting outlets, and advance deposit wagering companies now control 90% of our wagering revenue. As they rise, revenue to live racing falls, just as in England.  Read more...

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Can horse racing be saved?
Is the Sport of Kings becoming the Sport of Beggars?
D  R  A  F  T           D R A F T         D R A F T
12-18-2010 - Updated May 2011
The idea for this article occurred to me when I found a Facebook page, “A Fight To Save Horse Racing, “ which has as its primary premise all the industry needs is more and better marketing. While I applaud the intent, it just sounded too simplistic to me.
To be sure there are many challenges threatening the livelihood of the industry, as well as its very existence. I think, however, there is much more to it than zippier marketing or clever gimmicks.

Competition for gambling dollars
Intense competition for gambling dollars, created by the rise of casinos and state lotteries coupled with global economic woes, have led to a general decline in discretionary spending, including on racehorses. Alex Waldrop, president of the National Thoroughbred Racing Association, says, “The result is fewer owners, fewer horses in training, fewer starters per race and ultimately lower handle since horseplayers prefer large, competitive fields when wagering. Lower handle leads to lower purses, depressed owners return on investment and, finally, fewer owners. It’s a vicious cycle that can best be reversed by higher purses, which is why racino purse subsidies are so desirable.”  

The emergence of racinos -- facilities that combine live and simulcast racing with slot machines and sometimes other gaming -- rescued many racetracks. But alarming declines in pari-mutuel handle, the sale of horses and foal reproduction point to deep, long-term issues. "The business model is really broken in California," Hollywood Park President Jack Liebau says. "We've got to figure out how to put Humpty Dumpty back together, because we don't have alternative gaming."
Aqueduct Racino

Some states are suffering from inequities created when neighboring states have more liberal gaming opportunities. Kentucky and Maryland, as an example, suffering from fields that often number a handful of horses because of competition from gaming-enriched purses in surrounding states, are desperate for that same revenue stream.

Some racing venues have added clever – though some consider questionable – marketing gimmicks. This year the Preakness came up with an advertising theme of “Get Your Preak On”, and offered a $20 bottomless beer mug in the infield. Attendance was up 23% from last year. Other tracks and states are using other innovations to raise the betting handle so they can offer bigger purses. In some cases, though, it comes at the expense of cutting back on the number of racing days. The internet and international audiences are being viewed as areas for growth potential. 

So, is that it? Can what is wrong with the industry be fixed through adding slot machines, or other clever marketing ploys?

One state's answer to provide added revenue for the tracks, which in turn helps raise the purses, which helps raise the hand, etc., etc.  Click on this link: Maryland may give tracks money from slots

In Kentucky, Churchill Downs has stayed profitable when other tracks have fallen on rocky times. “Since 2006, thoroughbred handle [wagers] has declined 17 percent,” Bob Evans told investors and analysts on a conference call earlier this year. But during that same time period, “We have increased revenue every year at a more than 5 percent annual compounded rate after taking acquisitions into account.” 

Who is Bob Evans and how is he making money when others in horse racing are losing their shirts?

Can this man save horse racing?
Link to article from Street & Smith's Sports Business Journal, April 26, 2010.

It seems to me the real problem with horse racing is not that it's a business, but that it is a failing business. The current business model as it is being practiced is sowing the seeds of its own destruction. A business that is failing has to find ways to reinvent itself, as Bob Evans has shown can be done. He is demonstrating that even in a market without slots and casinos (Kentucky), there is a way to increase both market share and revenue. He has actually addressed the failures of the old business model, and he is, literally, reinventing the business side of the industry.
He has raised revenue at a time when betting handle is down by creating diversified revenue streams.  From the article: "As other track operators such as the New York Racing Association and Magna Entertainment dealt with bankruptcy proceedings in the last few years, Churchill Downs made money and increased revenue, including at its namesake track, which will host the 136th Kentucky Derby on Saturday, May  1." 

Change is hard in any industry, but not changing can more often than not be lethal!.  In the sport and business of horse racing, not changing is not an option.  I am thoroughly impressed with what he's done and is doing.  People like Bob Evans whose business career was largely outside the horse racing field, bring a fresh perspective at a time when the sport may just be going down for the second and a half time.  Let's hope his ideas catch fire with other race track operators. 

The elephant in the living room
Bob Evans has made changes others are sure to emulate.  As far as the industry is concerned though, there is still one very important change that needs to happen, if Evans' vision of marketing to other demographics, especially women, is to be successful.  Like the "elephant in the living room", which everybody steps over and walks around so often that the elephant is no longer visible,  there is an aspect of the sport that has in its own way had a part in its decline.  It is an achilles heel and the fly in the ointment of all that Bob Evans is accomplishing. If it isn't addressed, and if significant changes don't occur, even Bob Evans with all his innovations won't be able to rescue the sport from a decline into oblivion. His target demographics includes women, and attracting and keeping new fans to the sport. 

Horse racing has an element that none of the other gaming enterprises possess, and which has a positive and a negative side: The thing being bet on is a living, breathing, beautiful creature, pitted against other similar creatures. And because of that, at any moment on any track, our hearts can be broken over a horse that was rushed too early to the starting gate, or the breeder, in a greedy desire for speed, ignores all of the warning signs in some bloodlines indicating weak bones and a lack of durability genes. The "speed and breed" mentality has come about in the commercialization of the sport.

Coupled with unwise breeding practices are the DRUGS that have emerged as a cancer on the sport like no other.  Ask yourself why Europe, Australia, Dubai, and pretty much the rest of the world, have banned raceday drugs from the sport!  How do they get along without the drugs?  Horsemen here say they can't get along without them, that the horses will be harmed.  Yet, the Racing Commissioners International (RCI) an the Jockey Club support a phased out ban on the raceday drugs over 5 years.  And congress is working on legislation that would do the same.  A change to European style conditioning for horses so they don't have to rely on drugs will have to be introduced here.  So, what is going on here?

Years ago, horse owners were primarily limited to a relatively small group who bred horses to race against each other for the sheer joy of the competition. They considered all factors in breeding, seeking first to "improve the breed", which meant a dedication to not only speed, but also equal emphasis was placed on durability and strength. Other than a few throwbacks like Zenyatta and Goldikova -- which have seemed to defy the current practice of a horse starting 6 or 7 times and then rushing him off to the breeding barn -- when have you seen modern horses that were strong enough to withstand more than one or two short seasons?

Have you asked yourself “Why?” For therein lies the seeds of the demise of the sport.....almost before the betting public can get enamored of a horse, he disappears from the track! The big money gamblers can't handicap in this environment! The other result of these commercial breeding practices is when new fans come in to the sport, all excited and dewy-eyed, and falling for the romance and thrill of watching these gorgeous beauties fly around an oval track at break-neck speed, they are turned off when tragedies like Eight Belles or Barbaro occur before their shocked eyes. They scurry back to the mechanical and less emotional arena of other gaming opportunities.

And, unless some incentive can be developed to make it more attractive for commercial breeding operations to include in their breeding formulas a return to a goal to “improve the breed”, nothing will stop the continued steady destruction from within of the entire sport. Owners and breeders and trainers have only to look in the mirror to see where change has to start in order to reverse the downward slide of the popularity of the Sport of Kings, for, as Pogo long ago declared, "We have done met da enemy, and he is us!"

A.P. Indy - Lane's End
Who or what is “racing”?
I think it's difficult to identify just who or what "racing" is. When you ask the question as to whether "racing wants to succeed", who or what is "racing"? Is it the breeders who are catering to the owners who see the most money in the breeding barn, bringing on more weak-boned, fast horses with very short careers run only to demonstrate the speed of a colt so they can throw him into the breeding barn and sire more weak boned, no durability colts? I’m no expert, but, it seems to me, they are literally painting themselves into a corner with no where to go for fresh, untainted lines. What about the trainers/vets  and their unholy alliance with the drugs on raceday? It has been estimated that 98-99% of horses get a needle 4 hours before every race in the U.S. Or is it the track owners, trying to figure out whether to allow slots, add other gaming to get more bodies to show up at the track? Either they have to expand and add other gambling attractions to help subsidize the purses, which as they get smaller, then they have to cut back on racing days, yada, yada, yada! There are so many disparate interests, each at odds with the others that I have little trouble conjuring up an image of keystone cops running around with no sense of direction.

At some point, the whole thing is going to implode. Because we are dealing with flesh and blood creatures whose well-being does have to be taken into account, it is necessary to try to work out solutions...it is a worthwhile endeavor....but the way things are going, all the heart is being taken out of the sport. I have googled dozens of articles on "saving horse racing", and the subject has been talked about in earnest for the past 10 years or more. I still believe the core problem of the sport of horse racing is the bad breeding practices coupled with the drugs, a "chicken and egg" conundrum. You start there and try to bring the "sport" back to the sport. 

Mr. Evans isn't Superman.  Serious reforms need to occur to the breeding practices and the over-use of drugs that have led to horses that break down much more frequently than even in the recent past.  Think John Henry: 83 starts, twice Horse of the Year, and ran well into his 9th year, not officially retiring until age 10!  Think Forego: 57 starts, 3 times Horse of the Year. 

Forego's most dramatic win came at age 6 with his victory in the 1976 Marlboro Cup at Belmont Park. After contending for the lead, Forego faded to eighth of 11 horses on the backstretch, with Honest Pleasure holding the lead most of the way. Entering the stretch, Forego appeared to be too far behind to catch up but he made up ground in the closing strides and just edged out Honest Pleasure in a dramatic finish. 

Citation:  1948 Triple Crown, 45 starts, raced 3 more years after the Triple Crown, finally retiring at 6.

Everyone knows the story of Seabiscuit, the beat-up horse that had been used to train other horses to win, finally came into his own at age 4.  All told, he started in 89 races, was Horse of the Year in 1938, the same year he beat War Admiral  -- the Triple Crown winner the previous year -- decisively in a match race, which was termed the "Race of the Century.

What is the answer?
Surprisingly, I think the growth demographic for the sport may be women.  I noticed this as a possible growth demo for the sport even before I knew who Bob Evans is.  (Not that I'm so smart, but I am a woman, after all!).  Women take notice of the sport when the marquee races are run: The Triple Crown and a few others (that is the only time women outnumber the men, who normally make up about 80% of the base). I think women would be more attracted to the sport, if they weren't likely to see tragedies like Eight Belles or Barbaro one or two times (and more for lesser known horses) a year!

My point is, elevate the quality of the main ingredient of the sport -- encourage breeding practices that are balanced to "improve the breed" and not create delicate spindly weaklings that can't run around the block without cracking a bone! Longer racing careers allow for people to form a “relationship” with a horse.  Get rid of the drugs, period!  If people want to play slots, or gamble at the casinos, then fine, but I think trying to put a band-aid over the sport and have other forms of gambling subsidize it will not be enough to keep the sport from slipping into the brink unless some reforms to the faulty breeding practices are instituted. The "sport of kings" is fast becoming a sport of beggars! At some point you have to question the sense of so much activity without accomplishment! I tell ya, it's like the story about the alligators: "When you are up to your ass in alligators, it's hard to remember that your original objective was to drain the swamp!"

Even in defeat, Zenyatta's popularity, especially among
women has grown to epic proportions.  She has
over 55,000 fans on her main Facebook page alone!  Even
now in retirement, thousands check in to read her
Diary posts on Facebook and at her web site!
Note:  This is a "work in progress"....it needs more research and some editing, but it's a good start for a discussion about what is happening to the sport and to the industry.

Update May, 2011:  This piece is being updated and tweaked from time to time.  At the time it was originally written, Zenyatta had about 55,000 fans.  She is now approaching 84,000!  That is approximately 1400 new fans each and every week.  Her popularity has grown and continues to grow, even though she is in relative obscurity as a broodmare and removed from the glare of the spotlight.  This is what one horse can do, and connections who believe in the philosophy of putting the horse first.  Her story is what is GOOD about the sport.  Go, Zenyatta!  You go, girl!!