Purse statistics for individual tracks reveal how slots and simulcasting have transformed racing

Only seven years ago, Thoroughbred racing was a very different sport from today's game. As illustrated by purse statistics for individual tracks across the continent-a new annual feature of Thoroughbred Times-two events have altered the economic fabric of the sport in that relatively short period of time.

One development is full-card simulcasting, whose effects have spread throughout the sport and provided the financial engine for creation of the National Thoroughbred Racing Association. Also playing a big role in individual track's growth were slot machines, which have in some cases brought tracks back from the dead.

The raw statistics also reveal states, circuits, and individual tracks that are in trouble, either in danger of imminent collapse (New Jersey's Garden State Park is a prime example) or not keeping pace with inflation and thus falling behind other tracks in the competition for horses. Two examples of underperforming racetracks are Oaklawn Park and Remington Park.

As expected, the richest circuits are New York and California, but the numbers imply that the Golden State purses may be slightly restrained by its limit of 20 out-of-state simulcast races per day. Assisted by full-card simulcasting and disarray in Illinois, Kentucky has become the third-leading circuit in average purses distributed.

The current statistics, based on Jockey Club Information Systems data and extracted by Thoroughbred Times information-technology specialist Alan Johnson, also reveal some interesting facts about purses at tracks across the United States and Canada. (Detailed purse distribution by track by state begins with the West Coast in this week's issue, page 82, and continues for the next five weeks.)

The best money for an individual meeting was found at Keeneland's spring 2000 meet, which had an average purse of $68,378 over 136 races. Those purses reflect the enormous benefit of year-round simulcasting, especially for a track with a short meeting. Not-for-profit Keeneland is able to funnel all of the money it generates for purses from simulcasting into its 15-day spring meeting and 16-day fall meeting.

Second-best this year was Saratoga Race Course, which averaged $63,531 over 342 races, while the early weeks of the Belmont Park fall meeting ranked third. Del Mar, which offers a premier summer meeting, was fourth with average purses of $53,711 over 374 races.

Defining circuit

Purses in many ways define the racing circuits and the horses competing in their races. In addition, horse racing is often economics in its purest form, with the best horses and the best stables flowing to the richest purses.

All About Purses, Thoroughbred Times's annual review of race purses (March 11 issue), provides a macroeconomic look at what is occurring in the industry, highlighting trends such as the positive effects of full-card simulcasting in the last half of the 1990s and real, inflation-adjusted gains in racehorse earnings.

This article presents a microeconomic look at individual states and the tracks within them. Those numbers indicate that the beneficial effects have not been uniform. The biggest gains have been for circuits that have tapped into nonpari-mutuel revenues, although the advances for many tracks and circuits with full-card simulcasting have been substantial. Other circuits, however, present cases of mature or limited markets.

Few tracks have undergone a turnaround as dramatic as Delaware Park. Shut down in 1982 after a steep drop in business when Maryland went to year-round racing, the historic track was reopened by William Rickman Sr. in 1984 and persevered into the 1990s with a committed staff that was unwilling to let the track go under again.

Still, the numbers were minimal. As reported in the 1994 American Racing Manual, Delaware Park had an average race purse of $5,230 in 1993. Purses in neighboring Maryland were nearly three times as large, and prime competitor Philadelphia Park had an average purse exceeding $9,000.

Then in 1994, Delaware authorized slot machines at the state's racetracks to save the racing industry and to generate income for a state that has no sales tax. The effect was dramatic and continues today. Through October 1, Delaware Park's purses averaged $27,826. Even allowing for inflation-a $5,230 purse in 1993 has the same buying power as a $5,554 purse today, based on changes in the consumer price index-Delaware Park has more than quintupled its purses.

Maryland's average purse is $23,073 per race, while Philadelphia Park's average purse, currently $13,117, is less than half of Delaware Park's average.

Benefit from slots

Similar changes and well-documented turnarounds have been occurring in Iowa, where Prairie Meadows racetrack came back from the dead; in West Virginia, where coin-drop slot machines are fueling substantial increases in purses this year; and in New Mexico, which installed slot machines last year. Louisiana soon will be reaping the benefits of slots as well.

Slots' effect on racing purses is made amply clear in West Virginia. Mountaineer Park, West Virginia's former leaky-roof Waterford Park in the state's western reaches, now has an average purse of more than $10,000, up 20% from a year earlier, and Charles Town Races purses are up 10% from a year ago to a $9,797 average. In 1993, Mountaineer had an average purse of less than $2,000, and Charles Town's average purse was less than $4,000.

This year's spectacular success story is Woodbine racetrack, where slot machines arrived in the spring with dramatic results. To be sure, Ontario Jockey Club officials primed the pump by raising purses before its new slots casino put money in the bank, but slots piled up the reserves very quickly.

Through October 1, the Toronto-area track was paying out $50,479 per race in Canadian funds, which was up 48% from a year earlier. By contrast, the Ontario track had an average purse of $23,266 in 1993.

Money into claimers

Maryland, with a well-established colony of horsemen, caters to the claiming trainer. Laurel Park's winter meeting offered 71.5% claiming races, with 52.2% of all money going to claimers. In the summer meeting, with a larger proportion of maiden races, claimers accounted for two-thirds of all races and 49.4% of purses.

Still, the Free State has trouble competing with Delaware, which put 50.5% into claimers and had an average claiming purse more than $1,000 above that of Maryland.

Maryland's hopes for replicating Delaware's success with slot machines are virtually nonexistent. The state's governor, Parris Glendening, has said no to slots, and in other states the devices will never be approved by either the legislature or the citizenry. For those states, full-card simulcasting has been an economic lifeline, although growth in full-card wagering has slowed in such states as Maryland and New Jersey that instituted whole-card betting early in the 1990s.

Growth continues in states such as Kentucky, which has ridden the full-card revolution to year-round prominence. One of the chief beneficiaries has been Churchill Downs, which with Frank Stronach-controlled Magna Entertainment Corp. has gone on an acquisition binge over the past two years. Churchill's flagship spring meeting had an average purse of $44,078 this year, up 63.9% from 1993.

Ellis Park, now owned by Churchill, had a similar increase, growing 58% to an $18,477 average this year. Turfway Park in Northern Kentucky, however, had a modest increase from a $13,909 average purse to $16,694 at its spring meeting, which barely beat the 18.55% inflation rate between 1993 and 2000.

Owned by a partnership that includes Keeneland, Turfway represents a special case. With full-card simulcasting in 1994 and '95, Turfway's business boomed for two years-until Ohio authorized whole-card betting in 1996. Then, as River Downs and Standardbred track Lebanon Raceway attracted simulcast patrons in the Cincinnati region, Turfway's gains evaporated.

Top markets

Although performing much better than seven years ago, Kentucky and its racetracks pose no threat to the bicoastal big two, New York and California.

Their adherents argue endlessly over which circuit is the better, but the fact remains that both New York and California have done well in the simulcasting era. Although California Governor Gray Davis on September 30 vetoed any hope of expanding California incoming simulcasting this year, the state's tracks are doing very well in the new electronic era.

As expected, the biggest California gain was posted by Del Mar, which had an average purse of $53,711 this year, up 58.1% from 1993. Substantial increases also were posted by Santa Anita Park's winter-spring meeting, up 43.1% from seven years ago, and Hollywood Park's spring-summer meeting, up 44.3%. Santa Anita is owned by Magna, Churchill Downs owns Hollywood, and Del Mar is operated by a nonprofit corporation.

New York, the sport's sometimes-somnolent giant, posted even larger gains. Saratoga tacked on 63.3% to a $63,531 average purse in seven years, and Belmont Park's spring-meeting average pot grew by 62.3% to $51,538.

Declining markets

Still, not all regions shared in the benefits of growing markets. Clearly, the biggest loser was Garden State Park, the New Jersey track that may have conducted its last meeting. Garden State, located in Philadelphia's suburbs, was in trouble almost from the time the rebuilt track opened in 1985, and by 1993 its average race purse was down to $9,041. Its 2000 meeting had a slightly higher average purse, $9,741, barely keeping pace with inflation. The 1993 purse is worth $9,602 in current dollars.

Garden State also is losing the battle with its principal competitor, Philadelphia Park, against which it competed head-to-head in the winter and spring. Not only does the Pennsylvania track have a higher average purse, $13,117 through October 1 this year, but it also manages a $1,000-per-race advantage over Garden State in each claiming category-into which the Jersey track puts 70% of its purse money.

If Garden State's numbers foretell imminent collapse, then numbers at Oaklawn Park and Remington Park should raise red flags for their owners and regulators. Oaklawn is located in a mature winter-resort area and derives small benefit from full-card simulcasting. Its average purse in 1993 was $19,917, which translates into a $21,152 purse in current dollars. This year, Oaklawn paid an average purse of $21,497, which means that in real, inflation-adjusted dollars Oaklawn's purses have tread water for seven years.

Also encountering problems in the Southwest region is Remington Park in suburban Oklahoma City. With its average spring-meeting purse exceeding $10,000 in 1993, Remington experienced a decline to $8,495 per race this year.

Unexpected patterns

The purse statistics also turned up some interesting patterns. NYRA tracks certainly are known for their stakes races, but maidens make up a substantial portion of programs.

At Saratoga this year, more than one of every four races (26.3%) featured maiden allowance (special weights) contests, and they accounted for 17.1% of all purses. Why? Quality maidens-or maidens thought to have quality-are in good supply in New York, and the 90 maiden races attracted an average field of 9.2 starters. The only larger grouping was 9.3 starters for four maiden races for horses with claiming prices between $75,000 and $99,999.

Keeneland's reputation for quality racing clearly is based on a premise that good races mean no claimers. Among its 136 races in the spring meeting, only 19 (14%) were claiming contests. Keeneland also had more than a quarter of its races for maidens (they received 18.3% of all purses). Those races were all maiden allowances; Keeneland offered no maiden-claiming races.

A detailed analysis of purses by track by state begins in this week's issue on page 82. Distribution of purses by track by state will appear for all other regions in the next five weeks.