Economic Indicators: U.S. Wagering Tops $12 Billion In 2021 For Highest Total Handle Since 2009

Equibase, North American racing's official database, on Wednesday released its 2021 statistics for the industry's economic indicators, including field size, wagering, and other data, along with 2019 and 2020 comparables. The 2019 data is included as a  pre-COVID-19 comparison.

Total handle on U.S. races in 2021 topped $12 billion, reaching the highest figure since 2009. That number represents an 11.86 percent increase over wagering in 2020 ($10.9B), and an increase of 10.74 percent compared to 2019 ($11B).

By comparison, the 2009 wagering total of $12.3 billion came from a total of 49,368 races. The 2021 wagering totals were from 33,567 races, a 32 percent decline in the number of races.

“Against an extraordinarily difficult backdrop, the resiliency of Thoroughbred racing was on full display in 2021 as we concluded the year with significant growth in purses and total handle of more than $12 billion, the highest since 2009,” said Tom Rooney, president and chief executive officer of the National Thoroughbred Racing Association. “We thank our customers for their ongoing support as their wagering dollars continue to fuel our industry. As we turn the page to 2022, we look forward to the beginning of a new era for U.S. Thoroughbred racing with the launch of the Horseracing Integrity and Safety Act (HISA) and an even greater focus on equine safety and welfare and the integrity of America's oldest sport.”

Race days and starts both increased over 2020, which is expected after the pandemic shut down much of the U.S.'s live racing last year, but average field size showed a decline of 7.2 percent from 2020 to 2021. Over the same period, despite an increase of 10 percent in average purses per race day, average wagering per race day showed a 9.29 percent decline.

As compared to the pre-pandemic year of 2019, however, average wagering per race day showed an over 20 percent increase in 2021 as the number of race days fell by 7.98 percent. That's despite the average field size dropping from 7.53 in 2019 to 7.37 in 2021.

Total purses showed the largest percentage increase from 2020 to 2021, up 35.77 percent and 10.09 percent per race day.

Overall, the numbers suggest the horse racing industry is recovering from the pandemic, but also that it is struggling to retain field size as foal crops have declined in numbers.

YTD 2021 vs. YTD 2020
Indicator YTD 2021 YTD 2020 % Change
Wagering on U.S. Races* $12,218,407,637 $10,922,936,290 +11.86%
U.S. Purses $1,180,853,677 $869,771,206 +35.77%
U.S. Race Days 4,072 3,302 +23.32%
U.S. Races 33,567 27,700 +21.18%
U.S. Starts 247,416 220,006 +12.46%
Average Field Size 7.37 7.94 -7.20%
Average Wagering Per Race Day $3,000,591 $3,307,976 -9.29%
Average Purses Per Race Day $289,994 $263,407 +10.09%

 

1st Half 2021 vs. 1st Half 2020
Indicator 1st Half 2021 1st Half 2020 % Change
Wagering on U.S. Races* $6,279,039,094 $5,054,526,907 +24.23%
U.S. Purses $515,151,692 $324,168,648 +58.91%
U.S. Race Days 1,881 1,301 +44.58%
U.S. Races 15,792 10,906 +44.80%
U.S. Starts 117,303 88,074 +33.19%
Average Field Size 7.43 8.08 -8.02%
Average Wagering Per Race Day $3,338,139 $3,885,109 -14.08%
Average Purses Per Race Day $273,871 $249,169 +9.91%

 

2nd Half 2021 vs. 2nd Half 2020
Indicator 2nd Half 2021 2nd Half 2020 % Change
Wagering on U.S. Races* $5,939,368,543 $5,868,409,383 +1.21%
U.S. Purses $665,701,985 $545,602,558 +22.01%
U.S. Race Days 2,191 2,001 +9.50%
U.S. Races 17,775 16,794 +5.84%
U.S. Starts 130,113 131,932 -1.38%
Average Field Size 7.32 7.86 -6.82%
Average Wagering Per Race Day $2,710,803 $2,932,738 -7.57%
Average Purses Per Race Day $303,835 $272,665 +11.43%

 

4th QTR 2021 vs. 4th QTR 2020
Indicator 4th QTR 2021 4th QTR 2020 % Change
Wagering on U.S. Races* $2,720,738,901 $2,576,392,869 +5.60%
U.S. Purses $300,299,698 $240,534,957 +24.85%
U.S. Race Days 870 793 +9.71%
U.S. Races 7,339 6,805 +7.85%
U.S. Starts 56,789 55,530 +2.27%
Average Field Size 7.74 8.16 -5.17%
Average Wagering Per Race Day $3,127,286 $3,248,919 -3.74%
Average Purses Per Race Day $345,172 $303,323 +13.80%

 

December 2021 vs. December 2020
Indicator December 2021 December 2020 % Change
Wagering on U.S. Races* $808,907,627 $751,783,126 +7.60%
U.S. Purses $74,777,035 $57,534,410 +29.97%
U.S. Race Days 251 229 +9.61%
U.S. Races 2,151 2,008 +7.12%
U.S. Starts 17,257 16,884 +2.21%
Average Field Size 8.02 8.41 -4.59%
Average Wagering Per Race Day $3,222,740 $3,282,896 -1.83%
Average Purses Per Race Day $297,916 $251,242 +18.58%

2019 Comparisons:

YTD 2021 vs. YTD 2019
Indicator YTD 2021 YTD 2019 % Change
Wagering on U.S. Races* $12,218,407,637 $11,033,824,363 +10.74%
U.S. Purses $1,180,853,677 $1,167,920,667 +1.11%
U.S. Race Days 4,072 4,425 -7.98%
U.S. Races 33,567 36,207 -7.29%
U.S. Starts 247,416 272,553 -9.22%
Average Field Size 7.37 7.53 -2.08%
Average Wagering Per Race Day $3,000,591 $2,493,520 +20.34%
Average Purses Per Race Day $289,994 $263,937 +9.87%

 

1st Half 2021 vs. 1st Half 2019
Indicator 1st Half 2021 1st Half 2019 % Change
Wagering on U.S. Races* $6,279,039,094 $5,672,774,271 +10.69%
U.S. Purses $515,151,692 $544,002,132 -5.30%
U.S. Race Days 1,881 2,104 -10.60%
U.S. Races 15,792 17,457 -9.54%
U.S. Starts 117,303 130,239 -9.93%
Average Field Size 7.43 7.46 -0.44%
Average Wagering Per Race Day $3,338,139 $2,696,185 +23.81%
Average Purses Per Race Day $273,871 $258,556 +5.92%

  

2nd Half 2021 vs. 2nd Half 2019
Indicator 2nd Half 2021 2nd Half 2019 % Change
Wagering on U.S. Races* $5,939,368,543 $5,361,050,092 +10.79%
U.S. Purses $665,701,985 $623,918,535 +6.70%
U.S. Race Days 2,191 2,321 -5.60%
U.S. Races 17,775 18,750 -5.20%
U.S. Starts 130,113 142,314 -8.57%
Average Field Size 7.32 7.59 -3.56%
Average Wagering Per Race Day $2,710,803 $2,309,802 +17.36%
Average Purses Per Race Day $303,835 $268,815 +13.03%

 

4th QTR 2021 vs. 4th QTR 2019
Indicator 4th QTR 2021 4th QTR 2019 % Change
Wagering on U.S. Races* $2,720,738,901 $2,439,642,344 +11.52%
U.S. Purses $300,299,698 $274,053,649 +9.58%
U.S. Race Days 870 910 -4.40%
U.S. Races 7,339 7,653 -4.10%
U.S. Starts 56,789 61,576 -7.77%
Average Field Size 7.74 8.05 -3.83%
Average Wagering Per Race Day $3,127,286 $2,680,926 +16.65%
Average Purses Per Race Day $345,172 $301,158 +14.61%

 

December 2021 vs. December 2019
Indicator December 2021 December 2019 % Change
Wagering on U.S. Races* $808,907,627 $707,728,171 +14.30%
U.S. Purses $74,777,035 $66,315,581 +12.76%
U.S. Race Days 251 252 -0.40%
U.S. Races 2,151 2,169 -0.83%
U.S. Starts 17,257 17,561 -1.73%
Average Field Size 8.02 8.10 -0.91%
Average Wagering Per Race Day $3,222,740 $2,808,445 +14.75%
Average Purses Per Race Day $297,916 $263,157 +13.21%

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2020 California Handle, Purses in Numbers

After a pandemic-stricken year in which ADW revenues hammered California industry coffers, the first month of 2021 brought with it a flurry of budgetary and purse account developments in response.

First came the announcement from the Thoroughbred Owners of California (TOC) that they had reached an agreement with TVG, the Del Mar Thoroughbred Club, The Stronach Group's 1/ST Racing, and NYRA to inject some $15 million into the purse fund over the course of two years.

In response, a subsidiary of the gaming corporation Churchill Downs, Inc. (CDI) filed a federal lawsuit against TOC, asking a judge to rule that TOC is precluded from using a state law to force CDI into either accepting lower rates, abandoning its just-signed agreement with Santa Anita Park, or else entering into arbitration to settle the dispute.

Litigation aside, what are the numbers underpinning some of these decisions?

At the beginning of the year, TDN asked TOC to put together a handle and purse comparison of the years 2018, 2019, and 2020–a more complete picture to the numbers the organization supplied in October of last year.

In summary, the data tells this broad story: A 30.3% decrease in races last year (compared to 2018) constituted a 15.7% decrease in all-source handle, and a 22.3% decrease in overall purses.

The numbers also tell another tale, one with potential implications for the Golden State's racing product.

That's because the lone major wagering growth area concerned California residents betting on non-California races, while out-of-state wagering on California races also took a sizeable hit. How much of that trend, however, was due to a COVID-shredded racing calendar last year in California?

To see the numbers in full, click here.

Main data points:

Handle

To get a representative comparison of what impacts the unprecedented swing toward ADW wagering had last year, we've primarily compared 2020 numbers to those of 2018 (2019, of course, being the year that Santa Anita was embroiled in its welfare crisis).

With a 30.3% decrease in races last year, as compared to 2018, there was a 15.7% decrease in all-source handle, and a 22.3% decrease in overall purses.

Out-of-state wagering on California races decreased by 18.6%, from $1.34 billion to $1.09 billion.

Handle from all-source wagering within California decreased by 12.9% percent, from $1.43 billion to $1.25 billion.

When it comes to betting revenues from within California, the most noticeable growth area concerned wagering on out-of-state races.

Looking at wagering within California on California races, handle from wagering at brick-and-mortar facilities dropped 36.5%, while handle from ADW platforms rose 5.2%.

Looking at wagering within California on non-California races, handle from wagering at brick-and-mortar facilities dropped 24.1%, but handle from ADW platforms rose 36.7%.

Purses

When it comes to wagering in California on California races, purses generated through brick-and-mortar wagering decreased 78.5%, while purses generated through ADW platforms increased 31.6%.

What's more, total purse generation in this area decreased 47%, from $50.6 million in 2018 to $26.5 million last year.

When it comes to wagering in California on non-California races, purses generated through brick-and-mortar wagering decreased 85.4%, while purses generated through ADW platforms increased 96.4%.

What's more, total purse generation in this area increased 10%, from $29.3 million in 2018 to $32.8 million last year.

When it comes to out-of-state wagering on California races, purses generated through commingled exports decreased 22.2%.

Per-race figures

All-source, per-race handle increased significantly from $785,692 in 2018 to $951,306 last year. The per-race purse yield, however, increased only very slightly from $35,531 in 2018 to $39,657 last year.

But again, zeroing in on which races are most attractive to California bettors, the baseline numbers raise questions.

Combining wagering from both within and outside of California on California races, the per-race handle grew 4% from $576,366 in 2018 to $599,669 last year.

Compare this to nationwide figures (using numbers from Equibase), however, and per-race handle grew 28% from $307,875 in 2018 to $394,412 last year.

Back to California, when it comes to the purse retention rate, as compared to 2018, the overall percentage of money taken from handle for purses dropped from 4.52% to 4.17%–what constituted a nearly 8% drop.

Analysis

TDN asked Thoroughbred Idea Foundation (TIF) executive director Patrick Cummings to weigh on the numbers and provide some critical analysis on what these numbers mean in terms of industry sustainability.

P.C: “Greg Avioli's point in your recent interview was spot-on–without detail on the composition of handle and customers, horsemen are at a distinct disadvantage when it comes to understanding how the betting business is being managed. In California, that is of even greater concern given that wagering is the only source of prize money.

“A track could say, 'look, handle was flat,' or 'handle was up slightly, we did well' and everyone feels good about that. But if the high-volume rebate shop players increased their handle, a function of sweeteners to rebates and the like, and mainstream customers saw their effective takeout rise and reduced overall participation, there is little reason to be positive with a total handle figure either staying flat or being up slightly. Horsemen need more insight to the quality of handle, not just raw quantity.

“There are some signs, nationwide, that high-volume play, that which comes from customers betting nearly $100 million a year or more, sharply increased in the second half of 2020. We are awaiting some additional data to flesh that out more, but if this trend holds, and mind you it has been shifting in this direction strongly over the last 15 years, it is a terribly bearish indicator for the sport, and specifically for horsemen and purses. And that doesn't even factor the tremendous competition racing faces from legalized sports betting.

“When the biggest customers in our pools are given added financial incentives to increase play, on top of the significant technological advantages they already receive, being able to dump massive bets in at the last second and know exactly what odds they are getting, the mainstream customer will only take the hits for so long before abandoning racing altogether. Our estimates, published in July, showed that the high-volume rebate shop players have increased their handle by an inflation-adjusted 115% over the last 15 years while all other customers, anyone betting less than tens of millions annually, have seen their handle drop by more than 60%, adjusted for inflation.

“And don't forget, the biggest racetrack owners also own most of the ADWs, the majority of tote companies and even some of the high-volume betting shops.

“The deck is stacked highly in favor of the status quo.”

 

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Moment of 2020: Stradivarius’s Ascot Gold Cup

My moment of the year was the Ascot Gold Cup win of Stradivarius (Ire) (Sea the Stars {Ire}). If there was one significant puncturing of the general gloom with a shot of light it was this emphatic display from everyone’s favourite stayer. I just love him, he’s a top horse with the requisite looks to remain in the collective racing memory for a long time. I was too young to appreciate Ardross and thought I’d have to wait a long time for another Yeats, but along came this wonderful specimen and I feel spoilt as a lover of great stayers. Go on, do it again in 2021!

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How We Brought You The Most Important Stories Of This Most Strange Year Of Racing

As we all prepare to close the book on 2020 (slam it shut enthusiastically in most cases), it's time for our traditional look back at the stories we brought to you this year. This year has been a busy one for us at the Paulick Report, as we've covered major stories within racing and news from the broader world spilling over into the sport.

Of course, the COVID-19 pandemic was a central focus of our reporting this year, from the initial series of racetrack closures to the rescheduling of major events like the Kentucky Derby and Preakness. As it became clear the disruptions to daily life were not going away, we reported on the uncertainty and stress of horsemen across the country, and have continued our follow-up on from Pennsylvania, Illinois, and New Mexico, where the loss of wagering revenue has hobbled already-fragile circuits. In the face of the stress and fear that was common in the early days of the pandemic, we also brought you tales of kindness – horsemen helping each other feed their animals, helping to feed their communities, and an entire series on the dogged perseverance of the men and women who rise early each day to care for the horses we love. The economic disruption of the virus will not vanish when the calendars flip to 2021, and international racing experts have expressed concern about long-term impacts of the virus on public interest in wagering and ownership.

Activity in the national legislature became more impactful on racing this year than it has been before, as the Horseracing Integrity and Safety Act was introduced, passed, and finally signed into law in December when it was attached to a broader government spending bill. We've endeavored to answer your questions about the basics of the new authority that will be created by the bill. We've also published responses from key industry figures and organizations – some of whom enthusiastically support the bill, some of whom oppose it, and others who have advised caution in the face of scant details about the funding of the new group.

It's been a big year for news within racing, too. Several of our most-read stories of the year dealt with the indictment earlier this year of more than two dozen trainers, assistants, veterinarians, and others in connection with what the FBI says was an illegal racehorse doping ring. High profile horsemen Jorge Navarro and Jason Servis were among those arrested on charges of drug adulteration and misbranding, with horses in their stables extensively tested and transferred to other trainers. They have entered pleas of not guilty to the federal charges against them in the case. Other racing connections, both from the harness and flat racing worlds, would be indicted later, with authorities all the while hinting throughout 2020 since that more arrests could be coming. We sought to better understand what the health and welfare risks to the horses who had allegedly received the drugs described in the federal indictments, and to learn more about the history of SGF-1000, the drug Servis is accused of giving to the majority of horses in his barn. All indicted licensees saw their racing licenses suspended in March, but a Paulick Report investigation into the business of paper training questioned how easy it really is for a bad actor to be kept out of the sport.

Of course, Servis's arrest dredged up debate about the record of Maximum Security, the colt who crossed the finish line first in the 2019 Kentucky Derby but was later disqualified for interference. Owner Gary West had not finished his legal fight to have his horse declared the race's winner at the time of the indictments. West continued pursuing his civil case until three judges from the U.S. Court of Appeals for the Sixth Circuit affirmed a lower court's ruling dismissing the suit in August. Meanwhile, West sent Maximum Security for a series of tests and a thorough medical examination by Dr. Larry Bramlage before resting the colt and sending him on to trainer Bob Baffert for a 4-year-old campaign. Though earlier in the year, Maximum Security had won the world's richest race at the inaugural Saudi Cup, the Jockey Club of Saudi Arabia later withheld the winner's share of the purse pending an independent investigation into whether the colt ran the race under the influence of performance-enhancing drugs. As the colt's legacy continued to be a subject of debate, Maximum Security was retired to Coolmore, and a subsequent stallion ad touting the purity of his performances prompted some critical analysis from our publisher.

If there was one subject that ignited readers more than Maximum Security or the federal indictments, it was trainer Bob Baffert. Although he won this year's Kentucky Derby (and Breeders' Cup Classic) with Authentic, Baffert stumbled on the Derby trail when Charlatan tested positive for lidocaine after his win in the Grade 1 Arkansas Derby. Subsequently, Baffert runner Gamine would come up positive for betamethasone in initial post-race testing after the Kentucky Oaks and Merneith would test positive for dextromethorphan after a run at Del Mar in July. Baffert released statements explaining each result and is in the process of appealing the ruling in Arkansas. We took a look at whether having multiple medication violations in so short a time would be likely to compound penalties for the Hall of Fame trainer, and why test results for the split sample from Arkansas seemed to come so slowly.

At the start of 2020, Triple Crown-winning owner Ahmed Zayat became embroiled in an ever-more complicated legal battle stemming from a multi-million-dollar loan he failed to repay to New York firm MGG Investments. A judge appointed a receiver to manage and liquidate the Zayat Stable roster over the course of the 2020 racing season, and MGG eventually received a summary judgment against Zayat Stables in the amount of $24 million. As news spread of the civil case, trainers and other creditors came forward to say the stable owed them money, too. Zayat himself would later declare bankruptcy. The case made lots of documents publicly available that most people never get to see, including contracts for the sales of breeding rights, high-end bloodstock, and appraisals for horses in the Zayat program. We took a look at those documents to better understand how stud deals are made, how horses are appraised, and to sort out the legal process for Zayat's trainers and other industry creditors awaiting payment.

It hasn't all been court documents and COVID-19, though. As always, we aimed to bring you warm and fuzzy stories, too. Our weekly Connections series, authored by Chelsea Hackbarth, tells the story behind a recent winner – often a stakes winner, but sometimes the winner of a bread-and-butter race that meant so much more to a horse's connections. We've brought you monthly perspective from announcer and eventer Jonathan Horowitz in our Thoroughbred Makeover Diaries series as he navigates the highs and lows of retraining an off-track horse while still a novice rider himself.

In an effort to better serve our readers, we've also overhauled the section of our website we call The Paddock to bring you opinion and editorial content from a variety of voices. Mostly, it's dedicated to written commentary but expect to see a return of The Friday Show appearing there soon.

Our goal at the Paulick Report has always been to present you with the most important stories from the racing and equine industries and to shine light on their challenges and their triumphs. We could not do this work without our readers. Thanks to all of you for your support, and best wishes for the new year.

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