SARATOGA SPRINGS, N.Y. – Over the past two years, the racing industry has been battered by the forces unleashed by the recession. Banks have called in their loans and tightened their credit standards, wrecking bloodstock valuations, while consumers have stubbornly resisted opening their wallets to gamble on horse races.
The numbers are grim. In 2007, North American auction receipts were $1.234 billion; in 2009, that number had been cut in half, to $617.4 million. Handle on U.S. races in 2007 was $14.7 million; in 2009, wagering handle had fallen 16.3 percent to $12.3 million. This year, those numbers have stabilized a bit, but both remain in decline as the U.S. economy sputters toward either a jobless recovery or a double-dip recession.
On Sunday, the Jockey Club has asked four racing executives to discuss the trends at its Jockey Club Round Table Conference on Matters Pertaining to Racing. The discussion will form the core of the annual conference, which has been held for the past 57 years in Saratoga as a means to focus on recent developments in the industry.
The four executives that are scheduled to speak come from widely different experiences in racing:
◗ Nick Nicholson, the president of Keeneland, is in charge of the largest auction house in the world and two boutique race meets in the heart of horse country. This week, Nicholson confirmed that the company had offered buyouts to approximately 20 percent of the association’s full-time staff because of the financial pressures buffeting the company.
◗ Stephen Duncker is the chairman of the New York Racing Association, the state-franchised operator of Aqueduct, Belmont, and Saratoga that has continued to endure significant financial problems since emerging from bankruptcy in 2008. Those pressures are expected to be alleviated soon by the opening of a long-stalled casino at Aqueduct in late spring of 2011, but the larger New York racing industry remains imperiled by structural problems exacerbated by the bankruptcy of the largest bet-taker in the U.S., New York City Off-Track Betting Corporation.
◗ Dennis Robinson is the chief executive of the New Jersey Sports and Exposition Authority, the state-owned operator of the Meadowlands and Monmouth Park. A recent report issued by a commission convened by New Jersey’s governor recommended that the Meadowlands be closed and that the state and its casinos stop providing subsidies to the racing industry, despite a poll released Friday showing that the majority of New Jersey citizens support some form of state help for racing.
◗ Nick Eaves is the chief executive of Woodbine Entertainment Group, the owner and operator of Woodbine racetrack that has used slot-machine revenues to dramatically boost purses while simultaneously investing millions of dollars in the track’s racing facility.
James L. Gagliano, the president of the Jockey Club, will precede the four speakers in a presentation that is expected to focus not only on the dramatic declines on the economic landscape but also a trend that is of particular concern to his organization: a pronounced dip in the foal crop that is likely to get worse considering the uncertainty in the bloodstock market. For 2010, the Jockey Club has projected that the total North American foal crop will be 30,000, a 12.4 percent decline from the 2009 figure.
The ramifications of the decline are expected to be felt in the next several years as fewer horses go through the auction ring and make it to the racetrack, putting additional pressure on the breeding industry and the ability of racetracks to maintain their live racing schedules. As a result, most racing officials expect the racing industry to remain in a state of transition for years to come.
