Archive for the ‘Purses’ Category

By Ray Paulick
One or two million dollars just doesn’t get you what it used to.

Was it that long ago that felonious financier Robert Brennan shook up racing’s Triple Crown with a $2-million bonus linking victories in three stakes at the now-defunct Garden State Park in New Jersey with a win in the Kentucky Derby? Spend a Buck went after and won that bonus following his runaway victory in the 1985 Kentucky Derby, leaving  officials at the three Triple Crown tracks apoplectic when he skipped the Preakness and Belmont Stakes. They were so worried they went out and did the unthinkable: working together to create their own bonus scheme (which has now lapsed after Visa dropped its Triple Crown sponsorship).

The original Triple Crown Challenge bonus would pay a total of $5 million in purses and bonus money to any horse that won the Triple Crown (it was upped to a $5-million bonus plus purse money in 1997), and a $1-million bonus to the horse accumulating the most points from top three finishes in all three races. The latter bonus was dropped after the 1993 Triple Crown.

The absence of a bonus hasn’t hurt the Triple Crown, although without a participation bonus there have been fewer 3-year-olds running in all three races. I guess the feeling is that the owner of a horse that wins the Triple Crown will get his bonus when he retires him to stud (assuming he’s not a gelding or filly).

This past year, several entities clamored to get 3-year-old filly superstar Rachel Alexandra and older female champ Zenyatta in the same race. Jim McIngvale, the Houston furniture store owner better known as Mattress Mac, made the first run by offering to put up $2-million for a match race at Sam Houston Race Park in his home town. That gave McIngvale 15 minutes or so of free publicity, but it was a match race that was never going to happen. (McIngvale’s Gallery Furniture recently announced it is sponsoring a new $100,000 race on the Texas Day Champions program Dec. 5 at Sam Houston, proving he’s more than a publicity seeker. McIngvale and the Houston track haven’t given up on a race involving the two fillies, either, and offered $1.5 million if they showed up to face one another during the track’s winter meeting.)

TVG then teamed up with the New York Racing Association in an effort to get Rachel Alexandra and Zenyatta to both contest the Oct. 3 Beldame at Belmont Park. TVG offered to put up $400,000, which would increase the purse for the Grade 1 race to $1 million. That at least got some consideration from both camps, but it wasn’t in the cards for either Rachel Alexandra or Zenyatta.

Finally, the Breeders’ Cup gave it the old college try, offering to pad the winner’s share of the $5-million Breeders’ Cup Classic if both Rachel Alexandra and Zenyatta were in the starting gate. That would have resulted in a $3.7-million winner’s share of the Classic. But Rachel’s majority owner, Jess Jackson, had already made it clear he wouldn’t run his filly on the synthetic track at Santa Anita which he disparagingly calls “plastic.”

It’s no wonder, then, that the Japan Racing Association is having a hard time getting much buzz over its Autumn International series of four Grade 1 races on consecutive Sundays, beginning Nov. 15 with the Queen Elizabeth II Commemorative Cup, and continuing with the Nov. 22 Mile Championship, the Nov. 29 Japan Cup and Dec. 6 Japan Cup Dirt. The four races offer about $13 million in total purses, plus lucrative bonuses for horses that have won or finished second in major stakes in North America, Europe, Australia or Dubai.

For example, if Kentucky Derby winner Mine That Bird won the Japan Cup Dirt, a 1 1/8-mile race run clockwise at Hanshin racecourse in Osaka, he would receive $1.37 million of the $2.9-million purse but also get a bonus of $1.37 million for his Derby win, making the victory worth a total $2.7 million. That’s about the same as the Breeders’ Cup Classic’s winner’s  share of its $5-million purse. I’d venture to say Mine That Bird would face a much softer field in Japan than he’ll see on the Pro-Ride track at Santa Anita. Of course, he could run in both races.

The Derby is but one of 12 American races whose winners would qualify for a bonus ranging from $525,000 to $1.37 million for winning the Japan Cup Dirt. Even a second-place finish for those horses in Japan would pay them a bonus between $210,000 and $550,000. Click here to see the bonus scheme for the Japan Cup Dirt.

The Japan Cup on turf has similar bonuses. That race winner could take home more than $4 million in purse money and bonuses and the second-place finisher could win as much as $1.6 million in purse and bonus money. Click here for complete information on the Japan Cup’s purse and bonus details.

Nevertheless, based on recent interest in the Japanese races from American horsemen, it’s doubtful many serious contenders will be shipped to Tokyo or Osaka to contest these rich races, bonuses or not. No American horse has won the Japan Cup since 1991, when the late Charlie Whittingham sent Golden Pheasant postward for a victory. Golden Pheasant was the fourth American horse to win the Japan Cup in the race’s first 11 years.

In recent years, the Japanese have dominated the race with horses they bred or bought in the West as yearlings, winning nine of the last 11 runnings. The quality of Japanese-bred horses has improved, largely through the importation of stallions and broodmares from Europe and the United States in the 1980s and ‘90s. I think Americans have gotten tired of sending their horses over to Japan and getting their butts kicked.

The Japan Cup dirt, inaugurated in 2000, has had just nine runnings, with eight going to Japanese-trained horses. The lone exception was in 2003 when the Doug O’Neill-trained Fleetstreet Dancer, a previously unheralded runner in California, posted a huge upset.

American horsemen have been leery of sending good horses to the Japan Cup dirt, in part over legitimate concerns that the dirt tracks in Japan are deep and sandy. In fact, when Fleetstreet Dancer won, it may have been due in part to the fact rain tightened up the racetrack.

There’s a lot of money at stake in the Japan Racing Association’s Autumn International races, but purse money apparently doesn’t carry as much weight as it used to for some horse owners. Either that, or American horses ain’t what they used to be.

Copyright © 2009, The Paulick Report

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By Ray Paulick
With the mounting economic crisis leading to layoffs of public safety, education and hospital employees, among many others, it’s becoming increasingly foolhardyfor horse owners who race at tracks with purses enhanced by slot machine or casino revenue to expect that gravy train of subsidies to last forever.

Roy Arnold, the president of Arlington Park near Chicago, touched on this issue in comments at a recent gathering of the Thoroughbred Racing Associations and Harness Tracks of America. Arnold pointed out the casino at Prairie Meadows in Iowa earned in excess of $150 million last year while the racing operation lost $30 million.

“People are out of work and the state needs money to keep teachers, policemen and firemen employed,” Arnold was quoted as saying, “and you’re a politician who just heard that the racing operation loses $30 million but the casino makes nine figures. You owe it to the people you represent to ask the public policy question, why should racing get that money?”

Perhaps Arnold saw this letter to the editor of the Des Moines Register under the headline “Horse Racing Subsidy Has Proven Losing Bet.” In it, the writer asks, “Why are horses still racing at Prairie Meadows? That venture has not been profitable since it started. Polk County was on the hook for the Prairie Meadows bonds until the rules were changed to allow casino gambling. Now the casino money is coming in, and everyone ignores the losses.”

Prairie Meadows isn’t the only struggling racing operation under scrutiny by people who would much rather see those slot machine subsidies go directly into their community. Canada’s Fort Erie racetrack, which survived for more than 100 years without slot machines, may shut down its racing operation 10 years after getting slots (only the racing would end; the slots, obviously, would continue). Bill Finley wrote an excellent Op/Ed piece in TDN, providing the background on the Fort Erie situation.

The tourism board in the Fort Erie area may attempt to buy the racetrack from the casino company that now owns it. But that move, while applauded by the racing industry, isn’t universally supported in the Fort Erie community.

“Forget the Racetrack, Save the Hospital,” a headline for a letter to the editor of the Niagara Falls Review reads. “How could (the Fort Erie Economic Development and Tourism Corporation) even think of spending $35 million on a racetrack that has been going downhill for the past several years and losing money? … We could definitely find something better to spend that money on and let me make a suggestion. It is an old building as well, full of history, very needed in our community and would boost our economy. By the way, it also saves lives. It’s called the Douglas Memorial Hospital.”

Make no mistake. These are just the early days for public and political scrutiny of purse subsidies racing gets from slot machines or casino revenue. And wasn’t this everybody’s fear when racetrack operators started getting approval to open slots parlors at their tracks. When gambling businesses look at revenue per square foot, there is no bigger loser than a racetrack and no bigger winner than a slots parlor. It won’t be long before the various government agencies that approved the purse subsidies start having second thoughts.

And those subsidies are considerable. Keeneland president Nick Nicholson, in a report to the Kentucky Governor’s Task Force on the Future of Horse Racing, details the growth of purses in states with slot machines or casino revenue. Page 26 of the report shows what slots have done to purses in Pennsylvania, which added the machines in late 2006. That year, purses throughout Pennsylvania totaled less than $41 million. In 2009, they will have quadrupled to more than $160 million.

Leading the way is Philadelphia Park, projected to offer $83 million in purses this year. Yesterday, on a run-of-the-mill Tuesday program, Philadelphia Park (its new name if Philadelphia Casino and Racetrack, but old habits die hard) paid out $228,000 in purses on a 10-race program. Owners who never dreamed of racing at the former Keystone Park, a bottom-rung track with mostly low-level claimers, are now sending runners there from all over the East and Midwest. They’re not going there for the ambiance.

Philadelphia Park is one of the most profitable slot machine operations on the East Coast. According to Michael Pollock’s Gaming Industry Observer, the 2,832 slot machines at Philadelphia Park each won a staggering $386 per day for total annual revenue of $400.6 million. That’s more than double the average win per machine at Florida’s new slots parlors, and well above its competition in New York, Delaware and West Virginia. Philadelphia Park has transformed itself into a very successful casino that also has a racetrack.

No one I’ve talked to since Philadelphia Park brought in slot machines says they’ve had a great experience there. Many of the track’s regulars have said they feel like they are being treated like second-class citizens because they are there for horse racing and not slots.

And not to pick on Philadelphia Park, but that’s becoming a familiar refrain among horseplayers at these so-called racinos. Purses are great, and higher purses generally are going to attract better and fuller fields, making for more interesting and potentially lucrative wagering. But more and more tracks are looking at their racing product as a necessary evil to operate slots parlors, and they are treating it as such. Nearly as many tracks are now owned by casino companies as by racetrack companies, and even traditional racing companies like Churchill Downs are putting casino executives in charge of their tracks.

As Bill Finley wrote in the TDN Op/Ed on Fort Erie, “With few exceptions, the owners of virtually every racino in the country would probably love to get rid of horseracing. It’s costly to run, it doesn’t make anyone any serious money and it’s a business that few believe will ever again be on the upswing. These people want to be in the slots business, not in the racing business.”

So keep pushing for those racetrack slots in Kentucky and Illinois, and go ahead and look forward to the day when Aqueduct will be alive again with people (just not horseplayers), and when Maryland racetracks can compete with West Virginia, Delaware and Pennsylvania racetracks because they, too, have slots.

But just be careful what you wish for. Those riches from slot machines or casinos may look good now, but they might just be fool’s gold in the long run.

Copyright © 2009, The Paulick Report

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