thoroughbred owners of california | Horse Racing Free Tips

Major Boost Puts Del Mar Summer Purses Over $700,000 Daily; Ship And Win Bonuses Doubled

The Del Mar Thoroughbred Club in Del Mar, Calif., will implement a major purse increase for its upcoming summer race meeting opening on Saturday, July 17, including substantial increases in all overnight purses and record incentives for owners and trainers that ship out-of-state horses to race at Del Mar through its popular “Ship and Win” program, track officials have announced.

Average daily overnight purses for the 2021 season will be increased by over 30% as compared to 2019 levels during which the track operated an uninterrupted racing schedule. With the increases announced today, Del Mar expects to average more than $700,000 a day in purses this summer.

The “Ship and Win” program for horses entering from outside California is doubling both its participation fee for owners (from $2,000 to $4,000) and its purse bonus from 20% to 40% for all eligible races. The purse bonus will be upped to 50% for dirt races in the “Ship and Win” program.

“We've got some real momentum in California as we prepare for the 2021 season and, based on the inquiries we're receiving, owners and trainers are taking notice,” said Del Mar's executive vice president for racing, Tom Robbins. “Our partnership with the Thoroughbred Owners of California, TVG and The Stronach Group has us on track for one of the most lucrative seasons in Del Mar history, which will be a boost for California racing and help set the stage for us to host the Breeders' Cup here again in November.”

The 2021 purse enhancements are due in part to a partnership with the Thoroughbred Owners of California, FanDuel Group's TVG horse racing television network and advance-deposit wagering platform and The Stronach Group's 1/ST Racing. The multi-party agreement, announced earlier this year, is expected to inject up to $15 million into California Thoroughbred purses and programs over the next two years.

In addition, Del Mar's total handle for its 2020 racing seasons was well above initial projections – despite fans not being allowed onsite – adding funding to the purse increases for the upcoming live racing season.

Among the increases for overnights, maiden special weight races will jump from $55,000 during the 2020 summer meet to $70,000 this summer, maiden-claiming $20,000 races rise from $19,000 last year to $25,000 and open $40,000 claiming races purses will increase from $37,000 to $47,000.

As an example of how these increases affect the “Ship and Win” program, a maiden special weight race on the main track this summer will carry a purse of $105,000 ($70,000 plus a 50% bonus) plus a $4,000 starter bonus for out of state horses that qualify for the program.

“Anticipation for Del Mar's race meetings is always high among horsemen but it will be even more so this year with the increased purse structure announced today,” said Gary Fenton, chairman of the TOC. “We look forward to continuing our work with the state's key racing stakeholders to further strengthen California's year-round racing program.”

Track officials also noted that Del Mar's 2021 stakes schedule will be released in the coming weeks and that purse levels will be raised for several of its summer stakes races.

Del Mar will offer a 31-day summer racing season this year after racing 27 days in 2020. It will open with Saturday and Sunday cards (July 17-18), then switch to a Thursday through Sunday schedule for the balance of the meet. The summer season will close, as usual, on Labor Day, Monday, September 6.

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CHRB Approves Funding Of Marketing Program, Updates Drug Classifications

The California Horse Racing Board conducted a meeting by teleconference on Wednesday, Feb. 17. The public participated by dialing into the teleconference and/or listening through the audio webcast link on the CHRB website. Chairman Gregory Ferraro chaired the meeting, joined by Commissioners Dennis Alfieri, Damascus Castellanos, Brenda Washington Davis, Wendy Mitchell, and Alex Solis.

The audio of this entire Board meeting is available on the CHRB Website (www.chrb.ca.gov) under the Webcast link. In brief:

The Board approved an agreement between the Thoroughbred Owners of California (TOC), the Los Angeles Turf Club (Santa Anita), and Del Mar Thoroughbred Club (Del Mar) under which those parties will redirect some of their own revenue from Advance Deposit Wagering into a marketing program to fund player rebates, stakes recruitment, and Ship & Win incentives, among other things. This program replicates the functions of the defunct California Marketing Committee.
The Board began the regulatory process to update the CHRB classification of drug substances to align with Association of Racing Commissions International (ARCI) Uniform Classification Guidelines. The Horse Racing Safety and Integrity Act body is expected to adhere closely to ARCI guidelines as they promulgate their federal regulations.
Executive Director Scott Chaney described improvements to the CHRB website, including Racing Reforms Recommendations and the posting of Test Sample Positives in advance of the filing of complaints, pursuant to SB 800.
The Board authorized the distribution of $9,157 in statutorily mandated race day charity proceeds by the Del Mar Thoroughbred Club (DMTC) to nine beneficiaries. This amount was substantially less than the previous year's distribution because pandemic restrictions limited the on-track handle on which the program is based. DMTC voluntarily donated $105,058 to bring the total distribution to $114,215.
Public comments made during the meeting can be accessed through the meeting audio archive on the CHRB website.

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Fenton Elected Chairman Of Thoroughbred Owners Of California

The Thoroughbred Owners of California board of directors unanimously elected Gary Fenton to serve as the new chairman of the organization replacing outgoing chairman Nick Alexander, who stepped down after five years in the role. Fenton has been on the TOC board since 2016 and has served as chairman of the TOC Racing Committee since 2018 and TOC vice chairman since 2019.

Fenton is the managing partner of Little Red Feather Racing (LRF), California's largest syndicate with over 85 horses and over 400 owner/partners. LRF has campaigned Breeders' Cup Mile winner Singletary as well as Grade 1 winners Egg Drop, Midnight Storm, Secret Spice, Fault and Mirth. LRF has the fifth most starts of all owners in Southern California since 2010.

Fenton grew up in Beverly Hills, Calif., and caught the horse racing bug at an early age attending races at Hollywood Park, Santa Anita and Del Mar, including the first Breeders' Cup in 1984. He began his career as an entertainment attorney working for the William Morris Agency and media companies including ATG, Carsey-Werner, and AMC before transitioning to LRF full time in 2005. Fenton will be the 11th chairman of TOC following most recently the five-year terms of Nick Alexander (2016 – present) and Mike Pegram (2011-2015).

“Mike Pegram and Nick Alexander are giants in our industry who successfully steered this organization through unprecedented times and left the TOC in a strong operational and financial position,” said Fenton. “It is an honor for me to step into their big shoes at a very exciting time for California Thoroughbred racing. I have great respect for the hard work of TOC staff members and my fellow TOC board members who have each worked tirelessly over the past few years to achieve the TOC's core mission “to maximize purse revenues and preserve the long-term viability of our sport in California.”

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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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