UPDATED: Breeders’ Cup Losing Betting Race to Kentucky Derby

by | 11.10.2014 | 2:47pm

With $7.3 million in non-commingled international wagers added to previously reported pari-mutuel handle figures on the Oct. 31-Nov. 1 Breeders Cup, a total of $135,542,834 was wagered on the 13 championship day races from Santa Anita Park. That's down from the $139,418,666 wagered on 14 races in 2013 and ranks this year's Breeders' Cup handle fifth in the eight years since the championships were expanded to two days in 2007.

(Note: As the original version of this article stated, the $128,213,400 reported immediately after this year's event did not include non-common pool wagers.)

This year's totals reflect a gain of 16 percent in total handle from 2005, when a one-day Breeders' Cup at Belmont Park handled $116,434,571 on eight races but is 14 percent lower than the all-time record of $158,396,798 bet on 14 races at Churchill Downs in 2010. (Note: The original version of this article incorrectly said reported handle was the lowest since 2005.)

By contrast, annual U.S. wagering on all Thoroughbred racing has fallen by 25 percent over the last decade, from $14.6 billion in 2005 to $10.9 billion in 2013. At least Breeders' Cup is doing better than the national trend.

However, the sport's biggest one-day event, the Kentucky Derby, has shown significant growth in 10 years. The 2014 Derby Day handle of $186.6 million is 20 percent higher than in 2005, when Churchill Downs reported $155.8 million in wagers on the card (wagering on the Derby itself grew from $104 million to $129.2 million).

For most of the 1990s, more money was wagered on the Breeders' Cup than on the Kentucky Derby day card. Both programs hit $100 million in total handle for the first time in 2000 ($101,455,291 for the Derby and $101,283,427 for Breeders' Cup), but since then the springtime classic has steadily pulled ahead of the autumn championship.

Handle is important to the Breeders' Cup. Here's why.

According to the latest Breeders' Cup IRS Form 990 for 2012, $15.3 million of the organization's annual revenue of $40.9 million came from “simulcast fees and host track contributions.” That's more than the $14.3 million in revenue from stallion and foal nominations, and the $8.3 million in entry fees.

It's hard to make the case that stallion and foal nominations are going to grow, and the only way to increase entry fee revenue is to charge more to owners to run their horses.

This year's Breeders' Cup had the largest average field size (12.2 starters per race for 13 races) since 2006, when the average field size for eight races was 13 starters. Weather in Southern California on Oct. 31-Nov. 1 was perfect, there was no storm to blame on the East Coast as there was in 2012, when Hurricane Sandy devastated several states and heavily impacted all kinds of commerce, including pari-mutuel wagering.

This year's Breeders' Cup Classic was a very compelling race with the unbeaten Shared Belief taking on Kentucky Derby and Preakness winner California Chrome for the first time.

Everything seemed to be in alignment for a huge day.

Yet total wagering (with one less Breeders' Cup race than in 2013) declined, as did the average number of dollars in bets generated by each of the 159 starters. With one fewer race, the average wagered per race rose.

Breeders' Cup Handle_The event itself is becoming more attractive to patrons who desire an upscale experience. Food, fashion and entertainment play a bigger role at the Breeders' Cup than ever before. Ticket prices have gone up to reflect that.

Still, pari-mutuel handle on a two-day, 13-race Breeders' Cup is less than one percent higher than it was in 2006 on a one-day, eight-race event. Something about that doesn't seem right. If the Kentucky Derby can grow by 20 percent over the same time frame, shouldn't we expect the Breeders' Cup to keep pace?

CLARIFICATION: The accompanying table has been updated with figures for 2014 to include international wagers that were not commingled with U.S. pools. The totals rank the 2014 Breeders' Cup the fifth-highest since the event was expanded to two days in 2007. Average amount wagered per Breeders' Cup race increased from 2013. Wagering on the 2014 event was higher by  $1,184,554 than the $134,357,846 wagered in 2006, an increase of less than one percent, not lower, as originally reported.

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