Coordinating Supply and Demand - Ray on Racing from 148.ca

Coordinating Supply and Demand

Ray Cotolo
July 3, 2015

The negative trend in standardbred foal crops over the last decade has been a central issue for the industry, at least for the most part. The last notable report on the issue was in the April 17 edition of Harness Racing Update, which addressed the drop in foal numbers and claimed it a result of a decline in the interest towards racing, citing a 30.5 percent drop in membership with the United States Trotting Association (USTA). The correlation makes sense between the two, as owners must register with the USTA in order to own, breed, train, groom, etc.

This issue is not exclusive to harness racing. Thoroughbred foal numbers have also declined in the last decade, dropping 35 percent since 2005. Of course, the concern with fewer foals is with the quality in racing, since less horses usually leads to smaller fields.

The deeper problem with this trend is that it is showing no signs of reversing, which will result in a future with fewer horses to race. This causes issues for both gamblers and horsemen. For gamblers, it will lead, at least with the rate we race, to small fields, which usually yield smaller payouts on average due to the decrease in competition. For horsemen, fewer horses may mean less opportunity. The loss in opportunity to obtain horses in a stable would likely lead to the monopolization of certain stables, as well as the shrunken probability in mom and pop stables to acquire horses. Contrarily, horses are racing for more money nowadays than in years past, with announcements such as purse increases at Yonkers coming annually nowadays.

So, with the future of standardbred crops appearing dim, we, as an industry, will likely have to take some course of action. Which, judging from how our industry works, likely would mean more race dates!

Seriously though, I kid.

Something's got to give one of these days. Of course, one solution is to try and generate interest in racing. That's kind of working, but there may be a solution that could roll into effect fairly easily, a universal solution, which can be applied to any type of racing.

This solution may lay in cutbacks on race dates. Less race dates, in theory, sums to more horses, which would race at different tracks and consequently raise field sizes. In thoroughbred racing, regional competition is what causes smaller field sizes, exemplified in a tweet from Daily Racing Form's Marcus Hersh, who tweeted the average field sizes this year at the tracks Canterbury Park (Minnesota), Indiana Downs (Indiana), Praire Meadows (Iowa), Churchill Downs (Kentucky), Belterra Park (Ohio) and Arlington Park (Illinois) were between 6.3 and 8 horses per race. If these tracks were to divvy up racing dates, then each may benefit from larger fields.

The division of race dates may be most successful through the development of a circuit, not one of weekly, but seasonally. This is a familiar strategy intrastate, such as the circuit between Miami Valley, Scioto Downs, and Dayton Raceway in Ohio. But, maybe tracks like Churchill and Arlington could race one part in the summer, and the other track takes the other, or one takes the whole summer and the other takes fall. Circuits allow for the recycling of racing stock, so that individual tracks do not compete with one another, but instead coexist. This is more attainable in today's world, since tracks can run in off seasons on casino revenues.

The one issue with less racing, aside from impressions on locals, is the benefit of more racing for these tracks. Even if field sizes average around six or seven horses per race, most tracks make more money on more races because of more betting, profiting on quantity versus trying to with quality. This is not the only way to profit, however, as Kentucky Downs races five days a year, less than they did in years past, but, through lowering takeout and the brevity of their race meetings, have seen an increase in handle over the last two years, and have an average field size of around 10 horses per race according to the Horseplayers Association of North America.

Kentucky Downs also, in 2015, is offering $1.5-million in purses a day, since they, again, race five days this year. This introduces another benefit of less race dates, with Suffolk Downs doing the exact same thing. Since Suffolk Downs held what was thought to be the race of its life, the track has been seeking to revive this year for a three-day meeting since they got their racing license renewed, which allocates $500,000 in purses for each race day. This creates a lucrative meeting, especially considering the average purse when they were racing more was around $8,000 and will be closer to $40,000 during this meet.

Larger purses and fewer race dates would create its own incentive for horsemen and bettors. Larger purses would attract more horses since they have fewer options to race so, in theory, more horses would compete with each other. If field sizes increased because of this, then bettors may show their appreciation through the medium of their disposable incomes. This would only be achievable through discretion, meaning tracks would have to allow for commodities like the second tier to be used, which brings back the issue I addressed in The Horsemen Versus the Betting Public. Unless the horsemen and track management would agree to less racing and larger fields, it is only a pipe dream.

It seems, in theory, that less racing and more coordination between tracks would create enough incentive to both make racing more affluent across the board, as well as more interesting as a betting product. We will be coming to a point, whether it be later in my lifetime or towards the end of the generation of Baby Boomers, where racing stock will forcibly make our industry adapt, that is if it is capable of evolving. So, while the industry tries to generate more interest in the product, and is doing an okay job of it, we may want to begin adapting towards the grim future that our industry seems to keep in the back of their heads.

Ray Cotolo, long time follower of the harness racing industry, is a presenter on North American Harness Update.

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