The Brock Talk

Wednesday, August 3, 2011

Summer Signs Pointing Up For Horse Racing

This year horse racing couldn’t find a star colt, gelding or horse with a with a spy satellite and a bag of sweet feed.

In both male divisions, any talk of season-ending Eclipse awards is usually guided by the “What have you done for me lately” standard. Recent graded stakes winners Stay Thirsty, Coil and First Dude are at least mentioned when the topic turns to champions, even though Coil and First Dude each won their first grade I race of the year in their last starts (Resorts World Casino Haskell and Hollywood Gold Cup respectively) and Stay Thirsty has only two victories of note this year, both only grade 2 (Gotham Stakes and Jim Dandy).

The two biggest stars in the sport so far this year are from the older female ranks in Blind Luck and Havre de Grace. Not that these two very popular and gusty fillies aren’t worthy of their notability, it’s just that it is not often that we get to see their grade 1 races like the Apple Blossum (won by Havre de Grace), the Vanity Handicap (Blind Luck) or the Delaware Handicap (Blind Luck) on network television. Certainly HRTV and TVG help, but few sports fans would recognize Blind Luck.

Having said all that, from a business standpoint, horse racing is experiencing some notably upward signs, both short and long term. The industry has other more reliable indicators of the industry's overall popularity and profitability, but these positive signs are certainly notable.

Colonial Downs just concluded their 32-day season with a 21% increase in average daily attendance while money wagered on live and simulcast racing rose nearly as high, increasing 19.8%. Reducing and changing racing days and post times are attributed to the average gains, but total money bet at Colonial Downs rose slightly over last year as well.

Although purses at Colonial Downs dropped slightly due to less money wagered on Colonial races at other locations, more fans went to and wagered more money on the New Kent, Virginia track’s races this year compared to last. And that is significant in an national economy that is still far from any considerable recovery.

Saratoga, the prestigious, summer resort season located in upstate New York, is also experiencing increases. During the first two weeks of the meeting, attendance is up 1.3% with those folks wagering 4.5% more dollars on the races.

More interesting is the wagering on Saratoga from downstate. Last year, New York OTB was up and running during the Saratoga meeting. Some 50 OTB locations throughout the city closed in December due to bankruptcy caused by state budgetary problems (very long story short), and have since been replaced by simulcast facilities at both Belmont Park and Aqueduct Race Course on Long Island. The New York City fans have responded to the upgrade in facilities and have not been deterred what so ever by lost convenience of the many OTB locations available to them last year. The results speak for themselves as the increase in downstate wagering during the first two weeks of Saratoga have resulted in an increase of 11.4% over last year’s combined on-track handle.

Churchill Downs incorporated also gave investors and racing enthusiasts good news when they release their second quarter and six month figures ended June 30. In a July 27 press release, Churchill Downs Inc., revealed that net revenues from continuing operation for the quarter grew 16% compared to same period last year – to $249.7 million.

The growth was mainly attributed to the continued expansion and growth of CDI’s online and gaming business segments, of which and Harlow’s Casino near Memphis, Tenn., are included. The release also said that net earnings from racing operations increased primarily because of increases in admission, sponsorships, corporate hospitality and broadcast rights during the Kentucky Oaks and Derby.

Further south in the Lone Star State, where things have looked pretty dreary recently since legislation failed to legalize slots machines and casinos at tracks and on Native American reservations. Texas purses are now sure to decrease, while competing tracks in the Midwest and Southwest continue to increase their horsemen’s prize money through revenues from other forms of gaming in their states. One would think optimism for the future of horse racing in Texas would be rolling out of the state faster than a west bound tumbleweed leaving El Paso.

It has been recent headlines in the state that large gaming companies like the Chickasaw Nation’s Global Gaming and Penn National Gaming had invested heavily in Texas racing with large investments in Lone Star Park and Sam Houston Race Park respectively.

Recently, however, Retama Park in San Antonio has revealed they too are entertaining offers from corporations with large gaming interests. The story that appeared recently in the San Antonio Express-News story identified Retama Park CEO Bryan Brown as saying they would not disclose the name of the interested parties, only to say they were publicly traded Las Vegas Companies.

It may be two years before the Texas legislature meets to again and addresses the slot machine at race tracks issue, but potentially having the assets of three large gaming companies in Texas leads to much optimism for the next battle with those apposing additional gaming in Texas.

Despite horse racing's ability to provide a star in the more popular 3-year-old male and older horse divisions, racing fans appear to be showing up and betting their money on the thoroughbred game this summer nonetheless. Even in the wake of the most disheartening sports news in Texas since the 2010 Dallas Cowboys and Texas Longhorn football seasons, there is reason to look toward the future as gaming companies continue to invest in horse racing in the Lone Star state.

No doubt there are plenty of challenges for horse racing currently, but there are also some significant signs this summer that the game is going in the right direction. When there is no stars bringing the fans to the track, that alone presents signs of optimism.

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