The Bottom Line

by Ed Meyer

posted on December 9, 2008 in News | No Comments >>

If you feel like you didn’t get your minimum daily requirement of negative economic news from Page A1 or the business section of the paper today, and are looking for a supplement, you’ve come to the right place.

Based on the Thoroughbred Racing Economic Indicators for November, provided this week by the Equibase Company, the industry is (surprise) experiencing some down times.

Wagering on U.S. races worldwide for last month, as compared to the same time a year ago, was down 9.7 percent. November 2007 saw betting totals top $1 billion while last month topped off at just less than $968 million.

Those amounts are chump change compared to the dollars being directed from Capitol Hill in economic bailouts.

And $968 million seems like a lot of betting to somebody whose contributions to the figure are made sporadically, and in denominations ranging from $2-$10.

The report also shows that U.S. purses for November – nearly $83.5 million – were down 2.35 percent from 2007, while the number of racing days combined for tracks across the country were up 5.68 percent (465 compared to 440).

Year-to-date comparisons from November 2007 to November 2008 in the report show wagering of more than $12.8 billion (down 6.17 percent), purses of $1.1 billion (down 0.6 percent) and 5,764 race days (down 0.67 percent).

Equibase has been issuing such quarterly reports since 2003. But frankly, until the past few months, they didn’t make a blip on the radar of most folks who weren’t industry insiders.

What can we conclude from these numbers?

“Probably a couple of things,” said Joe Harper, CEO, president and general manager of the Del Mar Thoroughbred Club. “No. 1, at least we have the economy to blame. But I’m certainly not blaming the economy solely. . . . I think they’re reflective of not just the economy, but of racing in general.”

For years, Del Mar has run counter to the trend of racing in general. Harper cites statistics that, from 2000-08, the summer meetings at the track produced a double-figure overall increase in attendance despite a decline in that area for the 2008 meeting.

“We’re not totally immune to the problems of our sport and its declining fan base, but we seem to be on the right path and have been for a number of years, marketing-wise, to keep the numbers up,” Harper said.

“With the rising unemployment figures and the state of the economy in general, it is going to play (negatively) into discretionary income businesses such as ours.”

The buffer against the potential battering of tough times for a racetrack, Harper said, is to continually “kind of reinvent yourself” and, through marketing, try to provide as much entertainment value for the dollar to customers as possible.

It is, Harper concedes, easier to accomplish with a track located a few hundred yards from the beach, in a destination location, with racing dates that coincide with prime vacation and summer free time for millions of potential customers. It’s going to remain tough for his counterparts elsewhere.

“I’m not as optimistic when I look at a lot of other racetracks and venues across the country,” Harper said. “They were feeling the pinch before and now they’re going to feel it even more in this economy. At that time we grew 12 percent, both Hollywood Park and Santa Anita went the other way as much as we did or more.

“That’s pretty scary, when you look at it from their point of view.”

In the hard economic times of the 1930s, many people turned to horse racing as a form of escape from reality. and took hope in downtrodden-to-champion stories of horses such as Seabiscuit. Unlike today, racing enjoyed much greater overall popularity and was the primary outlet for legal gambling. In some ways it prospered despite the times.

“And it did for quite some time after the recession,” Harper said. “But in those days the bulk of fans were hardcore. Today, especially at Del Mar, the bulk of the patrons are far from being hardcore.”