Right Sizing The Racing Product

The key issue affecting the racing product is the sheer amount of the product. On any given Saturday in North America there are upwards of two dozens tracks operating with a race commencing every minute. With this much product racing ceases to be an event and resembles an infomercial for a kitchen appliance on a never ending loop in a deserted big box store that nobody goes to in some anonymous blanched suburb. Go to any simulcast center or OTB and every race looks the same. In silence it is anonymous claimers running around in a circle, while older working class men yell and slap their behinds with the racing form. Instead of a complex blood and guts puzzle to contemplate the game is reduced to keno with domesticated animals.

Racing does not need to reinvent the wheel to bring back the big-event nature of the game. The white hot and trendy UFC only holds fights every few weeks. Thus every fight is hotly anticipated as a lack of supply stokes demand. Anticipation is marginalized when in a three minute span the 5th race from Finger Lakes is shortly followed by the 5th from Delaware which is followed by the 4th from Ellis.

This is where government intervention has damaged the collective racing product. The permission to subsidize purses with slot machine revenue has created entirely too much product. Racing has ceased to be a hobby of the wealthy and has become welfare for horsemen. While everyone deserves to be paid for their hard work they should not be subsidized when their work no longer has a market. Should neighborhood shoe repair stores be brought back from the service industry graveyard and be subsidized by slots too? Most of these racino subsidized tracks have an unappealing product and a purse structure that could never exist if not for the slot machine subsidy. Their presence is hurting the existence of neighboring tracks that operate on parimutuel waging alone pressuring them to acquire a slot machine subsidy as well.


The sheer amount of racing not only reduces the appeal of the racino product but it also dilutes the appeal of tracks in neighboring jurisdictions siphoning stables and decimating competition thus neutralizing the appeal of the product. The expansion of gambling from parimutuel wagering and Las Vegas to slots machines in every region is another example of the enlightenment establishment not considering the unintended consequences of their meddling. The horse racing industry has not benefited from the increased gambling even when it enriches the purse structure temporarily it sets in motion the process that will eventually ruin the collective industry by market saturation and the loss of the fickle public as racing fans.

In the past I have advocated a laissez faire approach to the current challenges of the horse racing industry. Call it an intellectual breakthrough but I now believe that the laissez faire approach is the road to ruin for racing. There are too many jurisdictions with too many local interests that have the game "drifting like a rudderless ship". At this point centralized influence and power would greatly help in providing "friendly persuasion" to the market forces affecting racing. The ship can not continue to drift and take on more product while the bulkhead of the ship takes on more water.

US Handle Off By Over $1 Billion So Far This Year

American racing handle is down over $1 billion 7 months into the year. This is a steep decline off of 2008 which steeply declined from 2007. Instead of ringing the alarm and reaching for the slots lifeline to prop up the failing venues, racing should let the failing tracks close. We have market forces trying to "right size" the racing industry, but rather than let the natural forces transform racing into a healthy industry we have the racing industry pushing back with slots.

Instead of a healthy and fit industry we have a slew of uninteresting tracks and an industry too large to maintain. Last year 54,000 races were run in North America with $14 billion in handle. In comparison Japan ran 3,400 races and had $28 billion in handle! While most Americans are not going to bet like the Japanese it would be better if racing allowed the market forces to shape North American racing like JRA racing; reducing the amount of races and increasing the quality. In Japan every racecard is an event, here in North America other than a few boutique meets every race is like another endless spin of the roulette wheel. At many venues few people watch or wager on the action; the races denigrated into a pseudo-welfare distribution event for slot revenues.

There will be some pain as the industry "right sizes" but it is vital that American racing becomes healthy. No wasteful corruption laced government programs are needed to manage racing, it is just a question of letting the market close tracks and concentrate the fields at the successful venues. Rather than "right sizing" the game we have racing continually subsidizing low quality short fields with slots. These races pull horses from successful venues and the handle is not relative to the purse.

Slots are going to be the slow death of racing. Too many races with too many horses spread out at too many tracks. With all of these tracks the competition is severely diluted. Also with this slot-based artificially augmented demand for horses there is nowhere to retire the horses when their racing careers are over. Even with all of this baggage being lugged around racing still holds it weight and outgames other sports in TV rating for the triple crown events. Racing still has a sizable niche market and since it is a unique sport there is always the potential that racing could take off as tastes change. Racing will never have the chance to reach the mainstream if it can not "right size".

Slot Machines Spreading Disease

When slots were introduced in Delaware during the 1990's they were thought to be the savior of Delaware racing. Now that all of the unintended consequences of that governmental action have been accounted for, the slots have matured into a disease sickening every track on the east coast from Boston to Richmond. The most critical patient is Maryland racing which has been infected from all sides as slot enhanced racing has leached horsemen, horses and handle from its borders into neighboring jurisdictions. Beyer penned a controversial article earlier this week suggesting that Laurel should be shuttered and Pimlico remade as a spring boutique meet. There is virtue in his logic.


The core issue here is too much racing and nil cooperation. Slots propping up an unappealing product is akin to having a braindead patient hooked up to a respirator. The patient is alive but it is no life and he is a burden to all those around him. The surplus of unappealing slot enhanced racing is becoming a burden to the family of racetracks on the east coast and has spread disease throughout all of them.

A circuit including the tracks within DE, MD and VA should be pursued. Overlap of endless, unappealing meets and short fields can and must be reduced. Each tracks strengths could be highlighted. A festival atmosphere will return, instead of a daily grind of endless racing. A spring Preakness at Pimlico which transitions into an early summer of turf racing at Colonial Downs culminating in the Virginia Derby. Then more Summer racing at Delaware featuring well regarded stakes races like the Delaware handicap. Then as the leaves begin to fall a migration back to Maryland for the fall championship races like the DC International, Laurel Futurity and finally the Maryland Million.

The surplus of racing must be addressed. Short fields are spreading like a crisis and have even moved into the midwest. This crisis could be used to spark positive and much needed action. A Mid-Atlantic cooperative of tracks in DE, MD, and VA should be pursued to align racing dates. Cooperation will leave each track collectively strengthened and the racing product improved. It is time for collective leadership beyond the self-interest of each individual track .