Trends of Racing and Horse Inventories
Martin Panza
Martin Panza - Senior Vice President of Racing Operations, New York Racing Association

Ogden Mills Phipps:
The dramatic drop in foal production over the past several years continues to have a damaging impact on field size and our horse inventory at racetracks. Martin Panza has a wealth of experience in the racing department, and has brought some creative ideas here to NYRA. Today he’s going to talk about the challenges he faces, and all of his compatriots across the country have the same ones. Martin, thank you very much for coming...

Martin Panza:
Good morning. Thank you, Mr. Phipps, for that welcome. This morning I’m going to briefly share some thoughts on how the declining foal crop affects horse inventory at racetracks, how racing offices and racing secretaries are dealing with the issue, and how the New York Racing Association is trying some new strategies moving forward. In a thoughtful essay entitled, “Confessions of a Racing Secretary,” that appeared in the Daily News in April, Sal Sinatra, the veteran racing secretary at PARX, said, “the biggest challenge now [for any racing secretary] is dealing with a declining population of racehorses as the size of the foal crop has fallen.”

I concur whole heartedly.

We have certainly seen both an increase in race card cancellations due to lack of entries and decreased field sizes on a more regular basis. While some tracks have been able to buck the current trend, that seems to be a regional occurrence or result of running lower‑level races.

Those races are short‑term answers, but it is difficult to maintain a quality racing program for the long‑term by running lower level races as the economics of ownership is not really sustainable with the lower‑level purses.

All of us realize as declining foal crops affect field size, decreasing field size in turn negatively impacts handle. Racing secretaries strive to achieve maximum field size in every race they card. They want to offer “playable” races. Small fields are unattractive to horse players. Every day racing secretaries walk that fine line of field size versus the need to run certain races that may always produce small fields, but are required to sustain the racing program.

With the help of The Jockey Club and Equibase, here are a few statistical points of reference.

  • In 2013 we saw an average of 7.8 starters per race. While this is a 5% decrease over the past decade, it is important to note that half of that decrease has occurred in the last two years.
  • Further, while 52% of the races in 2013 had eight or more runners, more than one in four races, 27%, had six or fewer starters. A race with six or fewer starters is obviously less attractive to a better.
  • The average exacta payoff in 2013 for races with field sizes of eight or more was $104; with races with six or fewer starters, the average payoff was $34.

A 2012 study at Woodbine Racecourse found an increase from six to seven runners resulted in a 9.9% increase in handle. One increase from six to eight runners resulted in an increase of 19.1% in handle.

Reversing decreasing field size will be difficult when you consider recent foal crop trends and expected impact on a number of horses racing of racing age over the coming few years.

Since 1986 when we had an all‑time high of 51,296 registered foals, crop sizes have trended downward. In 2008, as the U.S. economy struggled, we saw just 35,000 horses registered. The foal crop projection for 2015, as you heard earlier, is 22,000.

In 2013, just over 59,000 horses started in at least one Thoroughbred flat race in North America. If we take the same ratio of starters from 2013 and apply those numbers to horses racing in 2015, we estimate there could be almost 10,000 fewer starters.

By 2017, if we follow this model, we’ll lose almost 15,000 starters.

Race day schedules have to be reduced. Our fans deserve and demand better wagering opportunities. If there is not a reduction in race days, then at the very least there must be a reduction in the number of races offered. The game is undoubtedly going through a transitional period, and it seems to me with thought and proper planning, we may have an opportunity to reinvent ourselves.

The days of carding 11, 12 or 13 races may be over. They should be. It’s just not working. As our economic environment has changed, we need to reevaluate our circumstances and our strategies. Instead of scheduling cards with 11, 12 or 13 races, because that’s what we did last year, maybe it is time to look at the equation from the other side. How many races can we run on a given day and average eight, nine or 10 horses per race? Set the standard from a requirement of what we want the product to look like, and then determine the amount of races that can be offered to meet that standard.

Horsemen by their nature want to see as many racing date races as possible. That is understandable. For racing to survive, horsemen must be able to earn a living, but short fields will not allow racetracks to survive.

Having spent most of my career in California, we enjoyed a certain amount of isolation from other racing circuits. Now working on the East Coast, I am amazed at the amount of racetracks trying to compete with each other in such close proximity. With the foal crop situation, horsemen, owners, and racetrack operators may fare better with coordinated 60‑day meets shared amongst three states rather than the current schedules being offered. Perhaps breeding programs could expand to tri‑state or multi‑state opportunities rather than remaining unique to each individual state.

That essay by Sal Sinatra also referred to instances where racing secretaries, himself and all of us included, have “succumbed to the temptation of playing with the race conditions to get that extra horse or two into the race.”

Sal was referring to the proliferation of amalgamated racing conditions, the mixing of allowance races with claiming. He concluded correctly, I believe, that “complex conditions serve no one. They confuse trainers and confound horseplayers. When trainers are confused and horseplayers are confounded, bad things happen.”

We need to reduce options, much like Detroit eliminated models and options when the auto industry was struggling with inventory.

The Jockey Club’s InCompass systems has developed a number of tools to help racing secretaries deal with these current trends. But the best tool a racing secretary has is his or her communication with the trainers, where he sets expectations for participation in the racing program. A reduction in races offered, combined with the racing secretary’s knowledge of his inventory, should result in fuller fields and a better racing product for our fans.

Personally, I think big event days are the way to go. American racing needs more large-scale national events if possible. We have the Triple Crown races and the Breeders’ Cup event, but after those four events, racing seems to become very much a regional game. We must find ways to further grow these regional event days into much larger national days. I’ve always believed in the big day theory, and Belmont Stakes day confirmed it for me this year when we shattered wagering records for Belmont Stakes day and even Breeders’ Cup day. Total handle was $153.4 million, surpassing the old Belmont Stakes record of $110 million, and Breeders’ Cup single day record of $124 million.

We had 20 million viewers watching the NBC telecast, and it was the top‑rated telecast of the week, an amazing feat for a racing broadcast.

We know California Chrome had a lot to do with it, but I also believe race fans responded to the prominent Stakes races we bundled on that card. I believe we created a day that people will want to attend each year, and not just when a Triple Crown is on the line.

Large event days attract our hardcore fans, the casual race goer, and I believe many first‑time attendees as well. This is how we can grow our sport through the difficult times.

The “big day” philosophy also paid dividends with our initial Stars and Stripes Festival on the 4th of July weekend, a day to attract international runners to Belmont Park. The American racing industry and New York racing need to be part of the international racing scene. With the exception of the Breeders’ Cup and the Arlington Million, I don’t believe we have been doing so in a meaningful way.

The Stars and Stripes Festival is designed to change that.

The addition of foreign runners in itself helps build the event and pique interest. I’ve been fortunate to attend racetracks in Australia, Japan, Hong Kong, Dubai, France, and the United Kingdom. The rest of the world plans these big events and shares horses while we are being left behind. We need more races that attract horses from other countries, and that’s what we have done at Belmont Park and plan to do so at Saratoga.

Saratoga is a unique and immensely powerful race meet. The New York Racing Association can envision a Breeders’ Cup‑like day right here, maybe as soon as next year. Whether it’s built around the Travers or the Whitney, we believe there is tremendous potential to help not only racing in the state of New York, but also American racing in general. We’ll continue to grow our Stars and Stripes event on the 4th of July weekend. We’ll also continue to enhance our Whitney day and our Travers day race cards moving forward. It is our goal to make these national days in the next three to five years.

In creating these big events, we are tweaking the business model, allowing for new avenues of revenue flow through sponsorship, increased admission prices, food and beverage opportunities, and such. It is time we stopped relying solely on handle as a revenue source. I thank you for your time and attention this morning, and I hope to see you all at the races very soon. Thank you.

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