Purses | Horse Racing Free Tips

CHRB Vice-Chair: 1/ST Racing ‘Doing Things That Are Detrimental to California Racing’

Although the recently reported purse cuts for the upcoming meets at Golden Gate Fields (25%) and Santa Anita Park (5%) were not on Thursday's official agenda for the monthly California Horse Racing Board (CHRB) meeting, the commission's vice-chairman, Oscar Gonzales, made it clear that the owner of both tracks, 1/ST Racing and Gaming, was going to face some tough questioning on the topic when the CHRB next convenes in January.

TDN's Dan Ross had reported Dec. 9 that Golden Gate is overpaid to the horsemen's account by some $3.1 million as the Northern California track is set to start what is expected to be the final race meet there (Dec. 26-June 9). 1/ST Racing disclosed back in July that it would be ceasing racing at the lone remaining non-fairs track in that region of the state.

In that same article last week, Bill Nader, the president and chief executive officer of Thoroughbred Owners of California (TOC), confirmed that Santa Anita's overnight purses are also scheduled to be lowered for the winter/spring meet that starts Dec. 26, with $2 million sliced from the track's stakes schedule.

Gonzales particularly took umbrage on Dec. 14 with the Golden Gate reduction, noting that he has received “a lot of phone calls” about “this drastic purse cut here in Northern California that I would describe as being very unexpected.”

“And that's really thrown a lot of the Northern California horsemen, [and] us commissioners, off guard,” Gonzales continued. “I had thought that there was a deal that [1/ST Racing had] put on the table, which was to extend racing [instead of closing at the end of 2023]. Then it appears as if this unexpected development, which is not a normal meet, but rather a [condition book that includes a] very drastic cut to the Northern California horsemen.”

Beyond the cuts themselves, Gonzales said he had issues with how horsemen found out about them.

“Process is everything,” Gonzales said. “And I just think that blatant disregard in terms of how it was communicated, if it wasn't for what appears to be a couple of news stories that were written, Northern California horsemen were just notified by the condition book. That's not how you do business. And I just feel that we have to remain vigilant when management comes before us, because I believe they are doing things that are detrimental to California racing.

“We have Arizona that's getting ready to reopen with higher purses,” Gonzales said, referring to Turf Paradise, which is slated to start racing Jan. 29 after a nine-month closure, and appears to be luring California stables out of state. “Meanwhile, we're cutting them. I just don't think that there's anybody paying very close attention about how we make sure we're retaining quality horses and quality horsemen.

“So I am concerned to say the least, and I cannot wait until we have representatives of that particular racetrack here before us, because I have a lot of questions for them,” Gonzales said.

Reached via phone after the CHRB meeting, Craig Fravel, the chief executive officer at 1/ST Racing, declined an opportunity to respond to Gonzales's comments.

But Fravel did want to make a statement about the Golden Gate purse cuts.

“I think it's just useful to point out that for the last year and a half, we have been in discussions with the TOC relating to reducing purses so that the actual purse liability is met from purses generated,” Fravel told TDN. “And they have been resistant to those purse cuts, so we have advanced sums well in advance of the actual purse liability to horsemen in Northern California. And I don't think it's unreasonable at all for us to try to recuperate them in accordance with what the actual statutory obligations are.”

At the CHRB meeting, when Gonzales asked the board's executive director, Scott Chaney, what power the board had to intervene, Chaney said the commission has few options beyond its obvious cudgel of compliance, which is control over the track's licensure.

“It's an interesting question. The purse structure is something that is decided on between the TOC owners' group [and] the particular racetrack,” Chaney said, explaining that purse agreements are basically predictions about handle revenue that can sometimes result in under- or over-payments.

When they occur, usually the tracks and horsemen agree to rectify the imbalance one way or another at the next scheduled race meet for that particular venue.

“So an overpayment or underpayment can be corrected over time,” Chaney said. But in this instance, because of the wrinkle with 1/ST Racing slated to shutter Golden Gate, “there's not another meet that Golden Gate's going to have to correct it. So I think in many ways this in uncharted territory,” he added.

“When Hollywood Park closed [10 years ago this month] it was a little bit different,” Chaney explained. Even though Hollywood was also shutting down after having overpaid the purse account, “Los Alamitos Race Course assumed a large part of that overpayment in exchange to take some of their racing dates. We don't have that same situation in Northern California. So needless to say, it's pretty difficult.”

Chaney added that “with respect to the CHRB's role, it's somewhat limited.”

Chaney pointed out that “TOC obviously has to develop their position. I think it's fair to say Northern California TOC members and Southern California TOC members probably view the purse cut differently. And so my understanding, at least, is that the TOC is not opposing the purse cut. So I think there's an internal dispute within the horsemen's group.

“The second piece is [that] part of the race meet agreement allows the tracks unilaterally to cut purses up to 25%. Beyond that, obviously there would have to be negotiation,” Chaney said.

“So I don't see a statutory, regulatory or legal role in settling this dispute,” Chaney said. “I would definitely say can use our 'influence' [with] both race-date allocation and licensure-granting. They are levers that the CHRB always has to kind of exact more fairness, if you will.”

During the meeting's public commentary section, the Pleasanton, California-based horse owner and breeder George Schmitt went into detail about the alleged dissension within TOC that Chaney had alluded to.

“The only group that are in the [TOC] bylaws that can negotiate for Northern California is [the TOC's] Northern California racing commission,” Schmitt said. “That committee voted unanimously not to accept the 25% reduction in purses. They were overruled by the management of the TOC.

“It is likely that there will be lawsuits filed unless they fix the problems that they have,” Schmitt continued. “A number of us in the north, at this point in time, believe that to take care of horse racing in the north, we need to establish a Northern California owners' organization [so as not to be] simply overridden by people in Southern California who could care less about what happens in the north.”

The post CHRB Vice-Chair: 1/ST Racing ‘Doing Things That Are Detrimental to California Racing’ appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Yale Study of Racing Biz: Areas of “Surprising Strength” Amid Sharp Declines

Every summer, the New York Thoroughbred Horsemen's Association (NYTHA) takes in a small gaggle of college-age interns–what for many of them proves a baptism of the turf.

This year's batch–three Yale undergrads studying economics, electrical engineering and political science–were tasked with a data-driven analysis of the economics of the national horse racing biz over the past 20 years.

Harboring no previous relationship with the industry, the three undergrads came in free of prejudice and preconceptions.

The result is a 33-page paper weaving piercing and worrying insights into the state of racehorse ownership, racetrack management and training in the country alongside findings that give tentative cause for optimism.

It's also the sort of detailed analysis of horse racing's economic foundation stones that's done all too infrequently for an industry of this size and scope.

“We've been a sport that traditionally makes decisions either around general 'chat around the pub,' or just whatever the richest guy in the room thinks,” said Joe Appelbaum, NYTHA president and an advisor on the study.

“Neither is usually a good one to make good economic decisions from,” he added.

Among the areas the three researchers focused in on were owner, trainer and horse participation; purse and handle trends; the bloodstock market; along with a side-by-side economic analysis of horse racing and other national sports.

They break their key findings down the following way:

That the 2008 global financial meltdown significantly hastened the decline in trainer numbers, owner interest numbers and participating racehorses.

That two areas–bloodstock prices and per-capita purse distribution–showed surprising resilience during that time.

More pointedly, with fewer horses competing for increased purses per race, individual owner entities have generally been doing slightly better financially over the last 20 years.

Despite areas of improved economic value for owners, costs remain high while the entertainment value of the sport appears to be declining due in part to horses racing less and working more.

The economic divide between the bigger and smaller trainers remained unchanged over the past 20 years. That said, such a divide is a characteristic of other national professional sports.

A consolidation of quality horses among fewer and fewer of the nation's largest stables has also triggered growing inequality among the top trainers.

At the end of the day, the not-for-profit model of certain racetracks coupled with the “capitalist nature” of Kentucky's breeding market could serve as models for other areas of the industry.

The detailed analysis warrants a much closer look at some of the statistics woven through it, several of which mirror the TDN's own prior dives into similar topics.

PARTICIPATION

The past 20 years has seen a decrease of nearly 40% in total horses that raced, a decrease of nearly 55% in total trainers that had at least one horse make a start, and a decrease of just over 42% in the number of owners who owned at least one horse.

Interestingly, the sharp drop in trainer numbers has been reflected in the TDN's own examination of California's trainer colony. Between 2007 and 2020, California witnessed a 46.4% decrease in the number of individual trainers making at least one start: from 573 in 2007 to 307 in 2020.

Hastening the speed of these declines was the 2008 global financial meltdown.

As the researchers write, “it accelerated the declines among horses and owners, and although trainers were already leaving the industry at a significant rate prior to the recession, trainers were still impacted by the economic crisis as they rely on owners to give them their horses.”

Since the COVID-19 pandemic, however, there have been tentative signs of plateauing declines in the number of participating owner interests and competing horses.

In what will prove a surprise to no careful observer of the sport, the last 20 years has also witnessed a 37% drop in the number of races run nationally, and a 45% drop in the number of individual starts.

“The landscape of the horse racing industry has changed a lot over the past 20 years as it has lost close to half its existing participants and 37% of its total races,” the researchers write.

“As the number of races, owners, and trainers continues to decrease across the country,” they warn, “the survival of horse racing is threatened.”

PURSE DISTRIBUTION

An inflation-adjusted look at purse levels show that total purses declined by nearly 25% between 2003 and 2023.

However, declines in the number of overall races run nationally over that same period has led to a situation of improved per-race, per-start economics for owners and trainers.

Indeed, inflation-adjusted purse-per-race numbers increased nearly 18% during that time, while inflation-adjusted purse-per-start numbers increased nearly 30%.

In another similarly themed section, the researchers took a stab at quantifying the cost of owning a horse, using numbers shared by one of the nation's “leading racing operations,” which remained unnamed.

Calculating typical training costs, the average days a horse is in training, farm costs, predicted jockey fees, and stable fees, the researchers estimated that the average annual earnings by a horse required to break even for its owner in 2022 was around $66,500.

In 2003, a horse had to win more than $41,810 for the owner to profit, they found.

The findings suggest that the number of horses “breaking even” for their owners over the past 20 years grew from below 8% in 2003 to over 11% in 2022.

Unsurprisingly, there were precipitous drops in the numbers of “breaking even” horses during the 2008 economic collapse and during the worst impacts from COVID-19.

The reason for this overall increase, the researchers write, is twofold.

“There are fewer horses racing, which is an effect of the decrease in the supply of foal crop,” they wrote. “And there is a higher amount of money available due to the alternative revenue provided through the casinos at the tracks.”

FOAL CROP AND SALES

The sales rings provided the researchers with another area for optimism.

“As the economy in general and horse racing in particular emerged from the Great Recession,” they write, “one area of clear strength has been the increasing value of bloodstock at all levels.”

Indeed, the inflation-adjusted average price of weanlings, yearlings and 2-year-olds increased over the past 20 years by just over $14,500. The same goes for median prices.

Since a recession-led low back in 2009, the median sales price increased 48% to a level of $30,000 in 2022.

“This upward trend in the median price indicates that a wide range of bloodstock assets, not only just the high-end ones, have experienced value appreciation,” the researchers write.

Why is this? The researchers contend that simple supply and demand is at play as the national foal crop has declined nearly 50% over the past 20 years.

“As the supply of horses eligible to be auctioned decreased due to the lower foal crop, breeders and sellers found themselves with fewer horses. Notably, the demand for these horses remained relatively constant, or in some cases, may even have increased,” the researchers write.

The combination of reduced supply and stable demand has led to an “upward pressure on prices,” they add.

SUPER TRAINERS

The researchers also tackle one of the bete-noirs of the industry–the issue of so-called “super trainers.”

Over the last 20 years, the industry has lost nearly 55% of its trainers. Most have been “micro-trainers” and “midsize” trainers–in other words, those with between 1-10 discreet horses, and between 11-40 discreet horses respectively.

Fewer races, horses, and owners invariably lead to fewer trainers, the researchers reasonably deduce. At the same time, existing stables have consolidated size.

The average horse-per-trainer ratio has grown from 8.2 horses per trainer in 2003 to 11.1 in 2022.

“With owners preferring trainers with more horses, the micro-trainers are losing out on potential clients and struggling to maintain a sustainable business,” the researchers warn. “Many of them may have decided to exit the industry altogether due to the diminishing demand for their services.”

At the opposite end of the scale are “super trainers” who operate stables with 80 or more horses.

The number of super trainers has stayed relatively constant in the midst of declining trainer numbers. In 2003 there were 123 super trainers, and in 2022 there were 114.

These findings mirror the TDN's own analysis of the training colony in California. While the number of active trainers in California almost halved between 2007 and 2020, the number of trainers with 100-plus horses making starts stayed fairly constant.

At the same time, the Yale researchers found that the nation's super trainers have significantly increased their percentage share of total available winnings over 20 years, from 27% in 2003 to 41% in 2022.

This means that last year, 114 “super trainers”–just 3% of the total number of active trainers–accrued 41% of the total available winnings.

Intriguingly, the researchers argue that this yawning disparity between racing's select few top-tier trainers and the rest is mirrored in other professional sports, like golf and football.

“Horse racing is a unique sport as it does not have many similarities to popular sports in the country, but so is golf, and despite being unique, they are both sports that have similar issues that must be overcome to participate,” the researchers write.

“Neither is easy to stay in, especially if you are not in the top percent,” they add. “It is hard to win, hard to profit, and hard to compete, but that is exactly what makes them both sports in the first place.”

WHAT TO DO?

The report has other intriguing findings, including how the income disparity seen among trainers is reflected between racetracks, with only a select few tracks thriving and offering competitive purses.

Ultimately, said Appelbaum, the report could and perhaps should trigger a couple of key industry responses.

One would be to decrease the regulatory burden “as much as possible,” especially when it comes to the Horseracing Integrity and Safety Act and to sports wagering.

“The current regulatory regime both in New York and around the country is really a bit redundant and not in step with the current sports wagering environment,” he said.

The other would be to regionalize circuits of racing to provide for “better planning of races between tracks and jurisdictions,” he said.

At the end of the day, the report should also spur more of these in-depth analyses into the economic building blocks of the sport.

“Why is it three college-age interns are doing this?” Appelbaum added. “Why aren't we doing more of this ourselves?”

The post Yale Study of Racing Biz: Areas of “Surprising Strength” Amid Sharp Declines appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Stakes Purses Raised by $1.2 Million at Fair Grounds

Louisiana's Fair Grounds Race Course & Slots will host 73 black-type races worth a combined $9.7 million during the upcoming 76-day 2023-24 Thoroughbred meet, officials at the New Orleans oval announced Wednesday. The amount is up $1.2 million from last year, but does include $1 million in base purses offered Dec. 2 as Fair Grounds hosts the 25th annual Claiming Crown. That event returns to Fair Grounds for the first time since 2011 with purses ranging from $75,000 to $200,000. Another $25,000 in each race will be available in purse supplements for accredited Louisiana-bred horses.

“In our 152nd year, Fair Grounds will set another record for the richest stakes schedule in Louisiana history,” said Doug Shipley, President and General Manager of the track.

Opening day is scheduled for Friday, Nov. 17, with six $75,000 Louisiana-bred stakes over the season's first two days, while the Road to the Derby Kickoff Day happens Dec. 23 with eight stakes.

“Many deserve thanks for their dedication and efforts to make this happen,” said Fair Grounds Racing Secretary Scott Jones. “Along with our phenomenal Road to the Kentucky Derby series and thriving turf course, this is one more reason why there is no better winter destination for horse racing than New Orleans.”

The highlight of the season, the $1,000,000 GII Louisiana Derby, is set for Saturday, Mar. 23, with 100-50-25-15-10 points awarded to the top five finishers on the Road to the Kentucky Derby. Eight stakes worth a total of $2,625,000 will be carded for the day, including the $400,000 GII Fair Grounds Oaks Presented by Fasig-Tipton, which awards 100-50-25-15-10 points en route to the GI Longines Kentucky Oaks. Last year's runner-up Pretty Mischievous (Into Mischief) rebounded from that defeat with a victory in the Oaks.

“The strong infusion of our sport's top 3-year-olds training and racing at Fair Grounds has been very apparent these past few seasons,” Jones said. “Beginning with the Gun Runner and the Untapable for late-season juveniles, it's proven that our progressive schedule of 3-year-old races for both the boys and girls gives horsemen the proper distances and spacing to prepare their runners for the first weekend in May and beyond.”

Closing day is Sunday, Mar. 24. Regular post time throughout the meet will be 12:45 p.m. CT, with an earlier noon CT first post on Thanksgiving Day (Nov. 23), Road to the Derby Kickoff Day (Dec. 23), Road to the Derby Day (Jan. 20), Louisiana Derby Preview Day (Feb. 17), and Louisiana Derby Day (March 23).

Click to see the entire Fair Grounds 2023-24 stakes schedule or the first Condition Book.

The post Stakes Purses Raised by $1.2 Million at Fair Grounds appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post

Turfway MSW Purses Projected to Hold Steady at $70,000

Turfway Park purses for maiden special weight (MSW) races are projected to stay level at $70,000, the same as last season. The dovetailed 2023-24 meets that run through March will open Nov. 29.

Chip Bach, Turfway's general manager, reported that projection during the Oct. 3 Kentucky Thoroughbred Development Fund (KTDF) advisory board meeting.

The overall purse structure, Bach said, will also be “similar” to the previous meet “even though we're adding days and races.”

Bach said Turfway plans on running Wednesdays through Saturdays with a 5:55 p.m. Eastern first post, with the GIII Jeff Ruby Steaks S. program a traditional afternoon racing exception.

Exact 2024 racing dates have yet to be awarded by the Kentucky Horse Racing Commission, but Turfway's corporate parent, Churchill Downs, Inc., lists Mar. 23 as the date of the 2024 edition of the Jeff Ruby on its “Road to the GI Kentucky Derby” points races calendar.

In the recent past, Turfway has experimented with various under-the-lights first post times, and also tried running during some afternoons on Saturdays. This year management wants to establish a more consistent niche, timing-wise.

“We confuse the handicappers if we're all over the place,” Bach said. “We found once we start building a consistent pattern for them, it's better for us,” he noted, citing Turfway's 5:55 p.m. slot as being more profitable.

“We believe we have enough not only in purse money, but horse population to keep us running four days a week,” Bach said.

“We are planning on running nine races a day in December and January,” Bach said, adding that track management will evaluate that number mid-season to see if carding nine races nightly is still sustainable heading into February.

This season will be Turfway's second with its entirely rebuilt racing facility.

Prior to upping MSW purses to $70,000 last season, Turfway paid out $62,000 in MSW purses in 2021-22. The dual meets that season were conducted with temporary trackside amenities as the multi-year grandstand rebuild was nearing completion.

In 2020-21, Turfway paid just $32,000 for MSW races, when the dual meets were heavily compromised by both the COVID-19 pandemic and the initial phases of the grandstand construction that kept the northern Kentucky oval closed to on-track spectators.

During the 2019-20 season, Turfway paid MSW purses in the $46,000-48,000 range.

The KTDF advisory committee approved the requested recommendation of the Turfway allotment that the MSW purse estimates were based on. The full Kentucky Horse Racing Commission still has to vote on final approval of that funding.

The post Turfway MSW Purses Projected to Hold Steady at $70,000 appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

Source of original post