Friday, July 02, 2010

Quality Equals Quantity

SARATOGA SPRINGS, NY, July 1, 2010--For skeptics requiring more proof that good racing is good business, two tracks have shown that not every venue need follow the national trend of double-digit declines so prevalent throughout most of this year.

On Wednesday night--yes, Wednesday night--Indiana Downs hosted its richest race of the meet, the $200,000 Oliver Stakes. The result was handle records for a single race and a single card; $379,220 and $2,140,490, respectively, gains of $75,000 and $304.000 per category.

Located at 4200 N. Michigan Blvd. in Shelbyville, it probably doesn’t hurt that Indiana Live!, “the closest casino to Indianapolis,” stands at 4300 N. Michigan. Although called a casino, slots are the only action available for bettors preferring not to allow thinking to interfere with their gambling.

Said Indiana Downs general manager Jon Schuster: “This is exactly how it’s supposed to work on the racing side. Higher purses bring higher quality racing...” For the record, Indiana downs does not make attendance figures available.

Still, handle of $2.1 million on a Wednesday night in a small town in Indiana is impressive no matter how many people were in the building: No wonder neighboring Kentucky is concerned about its own economic future in the gambling business. Indiana slots are killing them.

In New Jersey, meanwhile, Monmouth Park keeps rolling right along. Judging the ultimate success of the “50-day for 50 million” session won‘t be known for months, but the numbers continue to be other worldly. Over 14 days of racing, total handle is up almost 130 percent.

Handle on track has more than doubled, based on attendance gains of 24 percent. Cynics point to the low per capita figures, significantly below triple digits, but Monmouth officials say it’s to be expected when trying to introduce a new audience to the racetrack. Makes sense.

This week, a team appointed by New Jersey Gov. Chris Christie to analyze the synergistic components of racing, gaming, and entertainment in the state was to have its results ready for review. Instead, it was granted a 30-day extension. The new deadline is August 1, Haskell Day, featuring Monmouth’s signature event.

Monmouth Park’s aggressive profile is being matched by the state itself. Two pieces of legislation were recently introduced in the legislature, one allowing online sports wagering, the other permitting betting exchanges, popular and very successful in Great Britain.

Leading betting exchange company Betfair, trying to make inroads inn this country, purchased the racing network/advance deposit wagering platform TVG last year. The tandem is co-sponsoring Monmouth’s second biggest event, Saturday’s prestigious United Nations Handicap for older horses on turf.

Legislation allowing betting exchanges passed this state Assembly unanimously this week. Exchanges have been viewed as too controversial here because in this form of head-to-head wagering, money can be made when horses lose. That has the industry scared to death.

What is not known is whether they fear possible collusion or whether they’re afraid they wouldn’t be able to recognize it when they see it. The system has been abused occasionally in Britain, but the perpetrators were dealt with severely and quickly.

The popularity and success of betting exchanges is based on its low commissions. Two bettors agree to play, or lay, a certain horse in a particular race after one has set the win odds to win. The loser pays nothing; the winner as much as 5 percent, or lower based on high volume.

Supporters believe that the exchanges could benefit racing by expanding the menu of available bets that attract new players to the sport. On its face, a horse-vs.-horse wager is easier for new bettors to understand while savvy players appreciate the lower takeout rate.

Whether it goes the exchange route and/or gets permission to conduct online sports betting, it is clear that New Jersey has bought into the model that tracks market the sport and gambling while the money comes from a distribution network that includes phone betting, state sanctioned simulcast venues and Internet wagering. Those monies will allow the state to fund the racetracks.

In the main, quality has not been as good as was originally projected. Despite huge purses being offered in the allowance ranks and racing dates that were halved, the horse shortage created by the downturn in the yearling market the past two years has hurt the sport’s higher classes nationwide.

Monmouth and Belmont Park have struggled to put on a top class show on a consistent basis. What’s in store at the upcoming prestige meets of Saratoga and Del Mar at this juncture is anyone’s guess.

Early July marks the beginning of racing’s busiest period. Controlling the supply side has helped Monmouth thus far and they are about to get into the prime portion of their meet.

The money they’ve saved on high class allowance races now can be used to lure better horses, such as Horse of the Year Rachel Alexandra who will race at Monmouth next Saturday instead of the Grade 1 Ruffian in Saratoga the following weekend.

Monmouth jacked up the purse of the ungraded Lady’s Secret by $250,000 and lengthened the distance to nine furlongs. Unlike Indiana Downs, you can bet you’ll find out just how many more people a Horse of the Year champion is worth.

Written by John Pricci

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Friday, June 25, 2010

Albany Foot Dragging Could Render Gaming in New York Irrelevant

SARATOGA SPRINGS, NY, June 24, 2010--This community dodged a bullet recently when the New York Racing Association was extended a state loan against future VLT revenue, the absence of which would have resulted in shuttering the tracks for lack of funds.

Of course, it was not a bailout, but money they had coming from New York State in the exchange for turning over the deeds to their three racetrack properties, the terms for which spelled out clearly in the franchise agreement of 2008.

Meanwhile, Saratoga Gaming & Raceway, a.k.a. “the harness track,” a highly successful venue since VLTs transformed the property into a regional and destination attraction, is facing a threat from without, the construction of a full-scale casino in the Berkshires of Western Massachusetts.

Saratoga Springs is located about 40 minutes to the north by car via Northway Route 87 from the state capital; the Berkshires are a little farther in another direction but is easily accessible via I-90 East from Albany.

The larger issue is that while Saratoga has close to 1,800 VLTs, Massachusetts would offer a full complement of table games.

"I'll see your big apple and raise you two oranges."

The highly successful Connecticut-based Mohegan Sun is mindful of a threat to its own operations, electing to get into Massachusetts gaming on the ground floor by building a casino near Springfield, one of three slated for the Bay State.

While there was some discussion at to when New York State might establish full-scale casino operations, there wasn’t a lot of confidence expressed at this week’s New York Gaming Summit that it would happen anytime soon.

New York legislators have not even written statutes permitting electronic table games, saying that since existing laws do not expressly forbid it, operators could proceed as they wish. However, gaming operators have been reticent to invest in any project on the basis of tacit approval.

An expansion of full scale gaming can’t happen until an amendment is written into the state constitution, a long, arduous and multi-layered process. So, until a Constitutional Convention is called, that won’t happen anytime soon, either.

At present, Senator Charles Schumer and State Attorney General Andrew Cuomo, the odds-on favorite to be New York’s next Governor, seem to favor expanded gaming.

Schumer has publicly made comments in support of casinos for the Catskills region while Cuomo, in a 237-page position paper, stated that he wants a comprehensive review of how all gaming in the state is conducted.

While New York needs to collect vast revenue to close its enormous budget gap by any means necessary, the audience at the recent New York Gaming Summit were told not to have confidence that expanded gaming would happen in the near future.

While full scale casino operations are perceived to be a relatively harmless way to collect badly needed revenue without burdening all of the state’s citizenry, Gaming Summit attendees were warned that economics wasn’t the only consideration with respect to expansion.

James Featherstonhaugh, a high powered, corporate litigator and partner in the Albany Law firm of Featherstonhaugh, Wiley and Clyne, LLP, was instrumental in the adoption of the state’s racino legislation and is part owner of Saratoga Gaming & Raceway.

At Tuesday’s conference, Featherstonhaugh counseled that competition among gaming operators was fierce, and that policy issues and morality were also considerations. In other words, politics would decide whether or not expanded gaming would happen in New York.

“I think there are going to be some major changes in the way gaming is looked at,” Featherstonhaugh said during the Politics and the Law segment. "The next governor wants to make a comprehensive review of gaming as a whole, including possibly a constitutional convention that could lead to full-scale casinos.”

While New York dithers about what it wants to do, Pennsylvania will introduce full table games next month and voters in Maine will decide on casinos via referendum this November.

But for New York, and especially Saratoga Gaming & Raceway, the threat is more menacing. When Massachusetts comes on line, it will be able to offer not only a full compliment of gaming but can spend more on its customers via player rewards programs.

Why? Because the tax rate in Massachusetts for a full-scale casino is 25 percent compared to New York’s 50 percent rate on video lottery terminals. In the long run, which state would be in the best position to succeed?

Written by John Pricci

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Friday, June 18, 2010

What’s Working, What’s Not, and What Will New York Choose?

SARATOGA SPRINGS, NY, June 17, 2010--As of 10:26 AM this morning, as I clicked on the Equidaily web-site, three of the top-section story-links posted focused on the recent news out of Southern California and South Jersey.

And the differences between them were as wide as the distance between the East and West coasts of this great natural resource called America…before one of the multi-nationals began befouling it, that is.

The experiment at Monmouth Park this summer was the clearest example of how less can mean more, how the absence of something makes the heart and, by extension, the wallet, long for it even more.

However, the less-is-more concept at Hollywood Park and Buellton, California were, unfortunately, examples of how less should be taken quite literally, and where, for the moment anyway, bad news is the only thing that California racing has in abundance, the big mare notwithstanding.

Live racing was canceled at the Inglewood track for the second time this year due to insufficient entries. According to a Daily Racing Form story, officials were “guardedly optimistic” that they can complete the spring-summer meet that ends July 18 without losing another day of live sport.

Meanwhile, 125 miles to the north and west, up the majestic California coast line from Hollywood Park, Marty and Pam Wygod decided to shut down their River Edge Farm and move their entire breeding operation to Kentucky. Resultantly, 110 head, including 50 broodmares, will be sold at auction later this year.

What does that say about the present and future state of the game in the Golden State when California’s leading breeders for three straight years, 2006 through 2008, decide to take up stakes and get out of Dodge?

Wygod was one of the first computer whiz kids in the early 1970s who took an interest in racing while living in the New York metropolitan area. He developed a friendship with noted handicapper Mannie Kalish of the New York Post who introduced him to trainer Victor ‘Lefty’ Nickerson.

Nickerson, who mentored two California-based Hall of Fame horsemen, Ron McAnally and Richard Mandella, began training horses for the Wygods. Later, Wygod would start a new life in California, where he devoted his attention to racing and breeding full time.

Nickerson died six years ago and is best remembered, of course, as the developer of the great John Henry, whose reputation turned to legend soon after owner Sam Rubin moved the remarkable gelding to the Southern California circuit from New York.

Nickerson recommended to Rubin that McAnally should be ‘John‘s’ new full time trainer. Nickerson remained the trainer of record whenever the gelding would ship back to New York for occasional stakes foray.

Explaining his decision, Wygod told the DRF that “we’re going to focus on breeding in Kentucky. That’s where the top end of our stallions and broodmares [including 2009 Broodmare of the Year Sweet Life] are. We just reached a point after 35 years that it made sense to focus our interests there.”

Three of River Edge Farm’s four stallions, Bertrando, Benchmark, and Tribal Rule presently rank among California’s top seven sires. A fourth, Dixie Chatter, stood his first season this year.

As California breeders, the Wygods bred stakes winner Pirate's Bounty, later the state’s leading sire three times, producing 63 stakes winners, 44 of them born at the Wygod’s nursery.

Replicating a scenario that’s currently being played out in New York because of bureaucratic bungling in the Empire State, California is about to lose a breeding operation it can ill afford, such is the state of California racing.

At Hollywood Park, temporarily granted a reprieve from the shopping mall developers because of the current deep recession, the bad beats continue. Lopping off a handful of days at the beginning and end of the current race meet hasn’t worked because of a circuit-wide horse shortage.

“We thought we cut enough but maybe we didn’t,” Eual Wyatt Jr., vice president and general manager of Hollywood Park, explained this week. Despite the loss of two live racing days, two race-weeks shortened to four days, and eight-race programs, field sized has dropped, albeit marginally, to 7.86 runners per race.

A total of 49 horses raced on Wednesday’s eight-race program, attracting handle of $4,623,846 from all sources which, in better times, is the equivalent of a three-day Pick 6 carryover pool. Tonight’s popular evening program has drawn only 69 horses into the body of eight races.

This current reality is playing out against a backdrop of financial catastrophe in the state and the uncertainty of what will happen to date as a result of landlord Santa Anita kicking the Oak Tree Racing Association session out onto W. Huntington Drive.

By severely cutting back dates at Monmouth Park this summer, attendance there has increased nearly 21 percent over comparable 2009 dates through the first 11 days of racing. While it is far too early to tell whether the Monmouth’s success will extend through the balance of 2010, trends clearly are headed in the right direction.

Of greater import perhaps is the notion that the current perception of New Jersey racing is positive, not the doom and gloom being played out virtually everywhere else.

Whether or not perception is reality in this scenario, the shift of focus has created buzz. And if the current scene in New Jersey ever becomes reality nationwide, the mainstream might change its perception that racing is a dead sport.

Even with nationwide handle off 10 percent this year, the bottom line is that $12 billion will be pushed through the parimutuel pools by New Year‘s Day. That’s a number that cannot be ignored in today's economy.

The only way to change negative perception is to create a new one. Next week in Tarrytown, New York, a Gaming Summit will host industry leaders from throughout the state.

The keynote speaker will be Jeff Gural, prominent realtor, owner of Vernon Downs and Tioga racetracks, and part of a group with SL Green Realty Trust and Hardrock Entertainment bidding for the VLT franchise at Aqueduct.

Gural’s philosophy is that there’s too much racing, that other sports have seasonality, and that tracks like Saratoga work because it’s fun to go racing there. Among the topics on the agenda is “The Troubled State of Horse Racing and Off-track Betting in New York.” Good or bad, there will be no shortage of examples.

Written by John Pricci

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