Tuesday, January 6, 2009

The Future of Racing?

That's Sportsman's Park in Chicago, where demolition started yesterday, but it could be a number of other tracks in the not too distant future.  Racing needs to shrink, concentrate, and develop a focus. And that means that there won't be much of a justification for keeping a lot of tracks alive, as ever more betting shifts online.  This year's significant decline in handle, concentrated in the last few months of the year, will accelerate the process, inter alia by forcing Frank Stronach's Magna to sell of its tracks.  A year from now we may be looking at a very different industry.


Amateurcapper said...

Sadly, the same thing will occur at Hollywood Park as well. Thanks a lot, Churchill Downs, Inc., for selling the track to the highest bidder (real estate developer) and not having the foresight to keep the property in the horse racing "family".

A.Juell said...

Magna currently holds title to 9 tracks including Pimlico & Santa Anita. They also had the corpse known as Bay Meadows and hold title to the troubled Golden Gate Fields. Currently bleeding a lot of red -- $116.1 million since Sept. 30th '08. Been threatened with de-listing by NASDAQ twice. They've already put four other bodies in the trunk though one was a Greyhound track.
For some tracks it is simply a matter of the property exceeding the value of the business. In other cases, track purchases were pursued under the assumption of changing legislation in some states, notably Maryland. (Slots) Magna purchased the majority of their holdings between '99-01. That's a lot of dirt in a short period of time. At this point, whatever motivation that existed seems to be mute as the bone hunters are already scouring the company for trinkets.
Aside from that, tracks have to accept that the gate is gone and survival is going to be dependent upon relationships with ADW's and very shortly, betting exchanges. Virtually all the economic issues racing has faced since 1975 have involved changing technology. The industry has always needed to be a lot more pro-active nationally instead of the state by state pettiness that dominates the sport.
A. Juell