Why We Are Where We Are, Part I: How We Got Here

[Wandering Eyes]

My first trip to a Thoroughbred racetrack came in the summer of 1961 at Ellis Park. At the time, I was 16, closing in on 17, and Kelso was four, closing in on the second of five consecutive Horse of the Year titles.

Kelso never raced anywhere near Ellis, but his enduring class was such that he ranked among the sporting world's most recognizable heroes of the day. The New York Yankees' pinstriped pair of Roger Maris and Mickey Mantle, in their pursuit of Babe Ruth's single-season home run record, may have been the only sports stars of 1961 to capture more headlines and enthusiastic fans than Kelso.

Those were the days. These are not the days. Between then and now, Thoroughbred racing in the United States has experienced a wild ride of seemingly boundless expansion, followed by a mid-numbing and continuing contraction.

What follows here is an effort by this now-80-year-old to understand what in the world happened. The short answer is that horse racing's popularity has been decimated by withering competition for fans, broadcast and streaming revenue, and betting dollars in the sports, entertainment, and gambling markets.

This has sent the Thoroughbred sport into a prolonged, painful process of right-sizing, in search of a point where the supply of racing product on the market finds some equilibrium with the demand for it.

Amid this contraction, horse racing has become more dependent than ever on favorable treatment by state governments. In states where racing has found favor, the sport stands good chances of doing well. In other states, it does not.

The following observations are heavily influenced by events during the 1980s and '90s, when I served 20 years' time endeavoring to make sense of the economics of racing and breeding. I labored through those two decades in various writing and editing tasks at The Blood-Horse, Thoroughbred Record, and Thoroughbred Times. Only one of those three publications survives today, which is about par for the Thoroughbred industry as a whole.

Any quest to understand the larger picture must acknowledge the raw numbers of racing's great rise and fall. In Kelso's second championship season, a total of 40,744 individual Thoroughbred races were contested at racetracks across the U,S. Over the next 26 years, the annual total of races nearly doubled, reaching 80,382 in 1987. Then began a 37-year descent of more than 60 percent from the peak, down to 30,852 races in 2024.

The decline in horse racing's share of the sports gambling market has been just as striking. In 1961, racing, with its government-granted monopoly,  commanded substantially all of legal betting in the U.S. outside of Nevada. Sixty-three years later, 2024's total of pari-mutuel wagering on horse racing in the U.S. was $11.3 billion. That amounts to less  than eight percent of the year's all-sports handle of $150 billion.

In today's vastly-changed competitive environment, sports stars like LeBron and Caitlin need only first names to gather nationwide recognition. Taylor Swift's football-playing boyfriend generates more screen time, clicks, and searches than Thorpedo Anna, Thoroughbred racing's esteemed 4-year-old queen.

Paths to the present have been many and varied, but here are six Defining Developments at the top of the list. Some recount past steps to the industry's current state. Others offer glimmers of hope that dawn is not far away.

Defining Development #1: Sports Gone Wild

In 1961, the National Football League included 14 teams, and the upstart American Football League fielded eight in its second season. The two leagues were six years away from the first Super Bowl. Now the long-merged NFL has 32 teams, many competing in fan-friendly indoor and outdoor stadiums in cities from sea to shining sea. The Super Bowl has become the biggest sporting event on the continent, far surpassing all other contenders in ratings, revenue, and public interest.

Major League Baseball, the National Basketball Association, and the National Hockey League all have grown along similar lines. MLB expanded from 18 teams in 1961 to 32 today; the NBA from nine to 30; and the NHL from the Original Six to 32.

The NBA experience is particularly instructive. In the spring of 1961, the Boston Celtics wrapped up their third of eight straight championships. The Celtic dynasty played out in gritty, old Boston Garden, which seldom sold out during the regular season, and where, it was said, fans in upper-level seats wore boots and brought cudgels to slug rats marauding underfoot.

The NBA now welcomes fans into flashy arenas everywhere. The league also has built an international following that is a marketer's dream. Further, the WNBA, after years of base-building, is riding a wave of expansion in girls' and women's sports. The women's pro league is poised to expand from 12 teams in 2024 to 13 in 2025, 15 in 2026, and an intended 16 by 2028

Elsewhere on the current scene, old-line professional golf and tennis maintain considerable fan bases and television contracts. Forever-aspiring soccer is edging closer to major North American numbers. Then there are NASCAR, IndyCar, Formula One, Rodeo, PBR, MMA, UFC, WWE, Monster Trucks,  and Marathons, all carving out their own niche.

Boxing is alone among the major sports of the mid-20th century to have declined as much, or even more, than horse racing.

This avalanche of competition from pro leagues does not account for college sports, where teams engender passionate state and local followings. And where NCAA football and basketball command billion-dollar contracts from broadcast and streaming networks.

Overall, there is this inescapable fact. Fans, who might once have favored horse racing, now given such an enormous volume of choices, have elected to attend, support, bet on, cheer, jeer, and live and die with competitors in many other sports.

Defining Development #2–Gambling:  Everything, Everywhere, All at Once

Horse racing's monopoly on legal gambling was initially broken by a trickle of state lotteries, followed by a flotilla of riverboats, and a flood of full-fledged casinos. More recently, with gambling legalized on games in nearly every team and individual sport, bettors can seek payoffs either on-line or in a wide variety of gambling emporia, which are often newer and brighter than aging racetracks.

First nose under racing's monopolistic tent was the New Hampshire state lottery, established in 1964. The lottery's founders initially sought to mollify wary horse racing interests by basing winning tickets on the outcome of a rich new race at Rockingham Park. That became  the New Hampshire Sweepstakes Classic, a 1 ¼-mile race for three-year-olds. The Hall of Fame trifecta of Dr. Fager, John Nerud, and Braulio Baeza captured the 1967 N.H Classic, which carried a total purse of $265,900, higher than any of the year's Triple Crown races.

The N.H. Sweepstakes Classic was abandoned long before Rockingham Park closed permanently in 2011. Over the decades, state-sponsored lotteries have proliferated,  and are now joined by multi-state options Powerball and Mega Millions, with potential for life-altering payoffs. Few have any connection to horse racing.

Other milestones in the expansion of legal gambling included casinos at Atlantic City, which opened in 1978; Native American tribal casinos, which began to gain serious traction in the 1980s; and riverboats, which debuted in Iowa waters in 1991.

Riverboats have come ashore as land-based casinos. Native American gambling facilities have spread to 29 states and range from bingo halls to casinos, even including outlets in travel plazas and convenience stores. A total of 48 states (excepting only Hawaii and Utah) now have some form of legal gambling.

Along the way, it was hoped that, at racinos, simulcast parlors, and sports books, horse racing would convert casino players and all-sports bettors into dedicated racing punters. In fact, the greater movement has been in the opposite direction. More players have chosen to try their luck in gambling enterprises apart from horse racing.

Horsephotos

Defining Development #3–Bad Seeds

The early years of horse racing's great expansion contained seeds of its later contraction. The expansion was spurred not as much by a populace clamoring for more of the sport, as it was by states needing more tax revenue and horsemen wanting year-round, local circuits.

Prior to the expansion, much of the country's best racing was conducted in the South in winter months and in the North in warmer seasons. The move to year-round racing has left tracks to contend with the elements when it is too cold for comfort in the North and too hot in the South. That is not a formula for success in a hyper-competitive sports market.

All too often, winter racing at northern tracks bears a greater resemblance to government-sponsored jobs programs than to venues where fans enjoy themselves and make a bet. You know it is not good when you hear track managers talk, in frank honesty, about the pressure to  “grind it out” on a never-ending local racing circuit

Year-round racing at a single racetrack also fosters sometimes insurmountable challenges, even for the best track superintendents, in maintaining consistent surfaces and meeting safety standards. It imposes severe limits on any long-hoped-for expansion of grass-course racing.

In these circumstances, it is nearly impossible to name a racetrack prospering in a major city that has a full menu of other professional sports. By contrast, four upper-level tracks that have done well in recent years–Saratoga, Keeneland, Oaklawn, and Del Mar–share different characteristics.

They are all located in markets with limited competition from other professional sports. Each has a defined racing season, with an enthusiastic beginning and an end that leaves fans wanting more. All, except Del Mar, have generous purse structures supported by other forms of wagering.

Keeneland competes for three weeks when the forsythia is blooming in the spring, and another three when leaves are turning red, yellow, and orange in the fall. Its two racing seasons, thankfully so, are boxed in by well-established dates at other tracks on the Kentucky circuit.

By contrast, Saratoga, Oaklawn, and Del Mar all must deal with pressures to extend their seasons. Creeping expansionism at successful tracks can generate needed revenue for desperate industry stakeholders, but it also raises a now-familiar question: How much racing is too much for an individual market? Hard experience at over-extended tracks around the country should strike warning gongs, even for the most successful ventures in the current market.

Saratoga | Sarah Andrew

Defining Development #4–Mistakes Were Made

It is not difficult to conclude that many of racing's leaders failed to recognize that the competitive environment was changing and would never be the same, and to understand that the quantity of the racing product was outrunning quality.

Through it all, too many racing officials, breeders' associations, and their publications appeared to believe that the sport could still prosper by rekindling past glories, ignoring unfavorable trends, and unfailingly emphasizing the positive. In so doing, they missed an important difference between marketing and public relations. The former is about designing a product that meets public interest. The latter, absent fundamental change, traffics in porcine lipstick.

Of course, these conclusions are easy to reach now, and come with the benefit of hindsight. In truth, it was always going to be difficult for racing to compete with waves of expansion by competitors in other sports with stronger connections to contemporary culture.

Still, there were decisions that could have been made differently. One early mistake that played out over the decades was a reluctance to push racing onto television screens, thus missing a chance to build new fans and deepen the support of existing patrons.

Another mistake was the New York Racing Association's unsuccessful effort to scuttle off-track betting in the 1970s, thus ceding control of a new way of selling pari-mutuel tickets to an outside organization that had little allegiance to live racing.

Then came a pair of dumb and dumber mistakes in the 1990s.

One was opposition by the Thoroughbred Owners and Breeders Association to legislation that would have permitted casinos in Illinois. Instead of advocating for control of casinos by racing interests, TOBA aimed to defeat casino proposals outright in this one state and establish a pattern for defeating them everywhere.

The effort to bat down casinos in Illinois was successful in the short term, but a moment in history was lost. Eventually, the state approved free-standing casinos, setting off a series of twists and turns that ultimately contributed to the loss of Arlington Park.

Something similar happened in California, also in the 1990s, when horsemen's organizations in the state battled a proposal by Hollywood Park co-owner and CEO R.D. Hubbard to establish a card club on racetrack property. The free-wheeling Dee Hubbard, who could have prospered in the Wild West of old, offered to dedicate a slice of card club revenue to racing purses. Horsemen were bent on defeating his entire plan.

Eventually, Hubbard managed to open the club without horsemen's approval, and with scant contribution to racing. The card club then evolved into a casino. At the same time, Native American tribes were building connections in the state Capitol and gaining approval to expand their own casinos. Again, as in Illinois, an opportunity for racetracks to control their own destiny was lost. Downstream were the closures of Hollywood Park, Bay Meadows, Golden Gate Fields, and maybe Santa Anita.

Overall, events such as these offer evidence that horse racing's leaders too often missed one of the clearest lessons from the history of life on Earth. Which is:  Adapt or Die.

Tomorrow: Real Estate Realities

David L. Heckerman was born and raised in the rural Southwestern Indiana town of Cynthiana (population 500) and graduated from DePauw University in 1966. He now lives in retirement in Evansville, near his hometown. He occasionally ventures to the Ellis Park simulcast center, where, at 80, he may have recently passed the average age of  fellow improvers of the breed there. He may be reached at davidheckerman@twc.com.

The post Why We Are Where We Are, Part I: How We Got Here appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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