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Horse Racing Industry Faces Uncertain Future Amid Downturn
Published June 4, 2010
Saturday's Belmont Stakes "will remind fans how badly broken the business model is as the sport lurches toward an uncertain future after a sharp two-year downturn," according to a sports-section cover story by Tom Pedulla of USA TODAY. Global economic woes, "intense competition for gambling dollars created by the rise of casinos and state lotteries and the absence of lasting star power since Affirmed won the last Triple Crown in 1978 have combined to batter a sport that already was hurting." Pedulla notes NYRA "had warned employees it would begin to cease operations four days after the Belmont Stakes before it received a $25 million loan from the financially strapped state May 24." In California, Hollywood Park "received so few entries for an eight-race card May 26 that it canceled its live action that day." Hollywood Park President Jack Liebau: "The business model is really broken in California." Meanwhile, NTRA President & CEO Alex Waldrop said, "The down economy has led to a general decline in discretionary spending, including on racehorses." Waldrop: "The result is fewer owners, fewer horses in training, fewer starters per race and ultimately lower handle. ... Lower handle leads to lower purses, depressed owner return on investment and, finally, fewer owners. It's a vicious cycle that can best be reversed by higher purses, which is why racino purse subsidies are so desirable." Pedulla notes 12 of the 32 states that "offer Thoroughbred racing have racinos or purse enhancements from casinos." Penn National Gaming Senior VP/Regional Operations John Finamore, whose company owns Charles Town Races & Slots in West Virginia, said, "If it wasn't for slots, what we know today as Charles Town Races would be a strip mall or a housing development" (USA TODAY, 6/4).