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Friday, February 17, 2012

How History Has Recorded The Events of the 1990s-2000s

Imagine we were able to go in the future and searching the archives, you came upon an entry regarding the history of business of harness racing in the 1990s through the 2000s and you came upon the following entry:

Since the first racino opened at Mountaineer Park in 1990; the racing industry sold its soul to the devil for slot money. Instead of investing in its business, the racing industry, excluding most track owners who due to the large capital investment required thanks to state licensing fees had no choice but to sell out or partner with those casino operators whose only concern was keep racing going along as required to keep those slots, and in some states, table games going.

Of those harness tracks that had slot machines, perhaps the only ones that seemed to be run by owners who cared for harness racing were Tioga Downs, Vernon Downs, and Yonkers Raceway. If Plainridge Racecourse was lucky enough to win their bid for a slot parlor, they may have been added to this list as well. As for the New Meadowlands, if the Governor had woken up and allowed slots at the Meadowlands, they would have be added to this select list too.  However, at virtually every other harness racino in the United States, those track operators who loved the sport had long left the scene to be taken over by casino gaming companies. This became obvious when virtually every harness racino gussied up their gaming area and left their racing areas looking like they did back ten or 20 years in time.

Perhaps if horsemen looked at those dilapidated grandstands and wagering areas, the lights may have gone off in their heads. Some horsemen may have noted it and said something when those areas never got upgraded, but they were racing for great money, so who cared? After some lean years, the gravy train has arrived. When horsemen looked over to the grandstand and the apron and saw fewer and fewer people, they should have been concerned. Were they?   It didn't appear so.  When track handle declined to the point where 95% of the purse account came from slots, were they concerned (It should be noted the SOANY gets credit here because they worked with Yonkers Raceway to get handle increased)? Not likely; after all why should they? Life had never been better.

Of course, horsemen and their associations noticed racetracks were putting the bare minimum into maintaining racing to keep the slots going. No advertisements for horse racing, only for the casino. It became clear that the track operators were not interested in racing anymore; slots were their gravy train. If horsemen were concerned enough, they would have realized the days of racetracks promoting racing and the horsemen providing the horses were over. Thoe tracks were not going to spend a dime on racing that they didn't have to.

Clearly, if racing was going to thrive, changes were going to have to been made and it was in the horsemen's interest to do the marketing, lower takeouts, and make changes to the business model to keep racing going. However horsemen kept saying, it was up to the tracks to make the changes and the horsemen to provide the horses. The horsemen didn't realize for all practical purposes, 'the industry' no longer included racino operators. The industry for all practical purposes consisted of non-racino track operators, horsemen, breeders, and owners.

But, why should horsemen have changed things? Horsemen were rolling in the green while racing in front of no crowds. Things were good. Thanks to slots, the state or racino operators became like Atlantic City Casinos, paying horsemen and breeders money to just be quiet and race. Perhaps the only thing that ever got horsemen upset at racino operators was when tracks charged rent for stalls on the backstretch and/or just closed them.

So the spiral downward continued; fewer and fewer fans, lower handle, and so on but the horsemen really didn't care at racino tracks and they devastated the non-racino tracks, but those were horsemen in other states, so the attitude was why should we care?  
Then the signs started to show up. It may have been a perfect financial storm to cause it, but some states started to whittle away at the amount of money the horsemen got. First a one-time reduction, but then they became permanent. The occasional legislator would question why they were propping up an industry that won't help themselves? Horsemen grumbled, but things were still relatively good.

Then the provincial government in Quebec finally said 'enough'; the sport was not getting better and they cut the tracks and horsemen off. They realized the industry wasn't doing anything to improve their lot. In one single move harness racing in the province collapsed overnight. The result was racing in Quebec became a short season event racing for much smaller purses. Did any other horsemen think that could have been them? Apparently not, as the sport could not get together to make the changes necessary to revive the actual betting business.

Then cuts continued in certain states, always 'temporary' but temporary seems to never end. Horsemen were not happy and fought to minimize the cuts and were somewhat successful. Yet, horsemen were resistant to change. "At a minimum, the tracks should contribute" was the complaint, but the tracks wouldn't care or gave a little so nothing really changed. The state or racino operator kept handing over the money and the racino operators were just biding their time.


Let's now return to present times and see what is going on....

The standardbreds were kicked out of Prairie Meadows due to no interest in the product.  In Iowa, casinos are willing to pay the state $70 million to get rid of the requirement of racing greyhounds and even are willing to pay to help the greyhound breeders transition to another job. A legislator in Florida is proposing legislation to allow poker rooms and racinos to remain open without racing. Pennsylvania is now facing a potential 30% cut in purses which, in the ultimate irony, may have some horses racing in racino-less New Jersey. The trial balloon in Ontario to get rid of racing subsidies in one swoop has been proposed. The breeders and the horsemen are arguing about the jobs that would be lost in Pennsylvania and Ontario, but does this argument win with the general public? No, no one wants to see someone out of work, but if it comes to a teachers losing their jobs or breeding farm workers and horsemen losing their jobs, who do you think John Q Public will decide has to lose their jobs?

Some amount of money will come out of the Pennsylvania horsemen's pockets and perhaps in Ontario this trial balloon is blown up, but will the industry make changes? Racinos for the most part have no problem writing the check to the horsemen or the state treasury but sooner or later the state governments will be forced to say 'teachers' or 'horsemen'. Guess who they are going to decide in favor of?

Remember Quebec! should be the battle cry in the industry. No, in the United States it won't be an exact replication, the racino operators will be alright. What will happen is the sport will either be evicted from the track or they will be forced to race for what they earn in the purse account. It is the action of the industry in the next few years which will decide if that will be $800 or $8,000 a race.

Yes, the SOANY is working with Yonkers to improve handle, the Tioga horsemen agreed to lower their takeout rate as did Plainridge.  The USTA has kicked in with the Strategic Wagering Initiative which has helped, but the fact remains the product we offer is still in the 1950s.  While ADWs continue to take business away from the tracks, only The Red Mile has formed their own ADW.  You would think the industry would attempt to form a non-profit ADW consortium in an attempt to recoup some of the business lost to the ADWs by taking only a cut for marketing (rebates, etc.); talk of reducing the takeout rate to stimulate wagering; the debate over whips complete with the cry of "This is the way we always did it" despite the fact it turns off potential future gamblers; the need to shorten meets and have fewer tracks racing at a given time to concentrate the gambling dollars which remain in the sport and raise the purses; the need to have states give up control of the sport to a regional entity under a national 'league'; take control of sports' future away from the casino operators; make the sport appeal to the masses.

Is the industry willing and able to make the changes necessary or will we see one by one each state with gaming at tracks become Quebeced?  Quite honestly, I am not sure they are.  Sadly, I believe there are those horsemen who feel the death of the sport is unavoidable and rather than invest in the business, they are grabbing all the money they can with the time remaining.  Then there are those horsemen in denial who sincerely think their state governments will never kill their industry off; that subsidies are a divine right.  Hopefully the news from Pennsylvania and Ontario, whether implemented or fought off this time, hits home and sounds a clarion call to wake the industry up.  If not, we may be approaching the point of no return.

I wonder in the future, how history will record the history of harness racing from the 2010s on?

1 comment:

Anonymous said...

Where is the horsemans assosiations. Why aren't they the ones promoting these young drivers. Horses that have won many in a row, horses that are breaking some sort of records, and the list can go on and on.
Billboards articles in the papers. Promote these things publicly not just on blog sites. I see no reason why horse racing can't be promoted for the wonderful sport it is.