Saturday, July 17, 2010

Monmouth vs. Belmont: the Numbers

Much has been made of this year's big increases in attendance, handle, field size and purses registered by Monmouth Park in its innovative three-day-a-week race meet. Halfway through the summer meet, attendance is up 13% over last year, at 10,500 a day; all-sources handle has more than doubled, from $3.5 million a day last year to $7.7 million; and on-track handle is up 43%, much more than the corresponding increase in on-track attendance. So, it seems, Monmouth's ballyhooed "million dollars a day" in purses for a shorter meet appears to be the wave of the future.

Meanwhile, the New York Racing Association's Belmont spring-summer meet seems to have been lost in the financial mess that is New York racing, with the performance of the horses and the track buried by news of the state government's continuing ineptitude over putting slot machines at Aqueduct, a mere nine years after they were authorized, and of the continuing failure of New York City Off-Track Betting Corp. to pay the race tracks and horse owners what it owes.

But a comparison of the data for the two meets, Monmouth and Belmont, reveals that there still may be some life in New York racing -- enough life so that, with a modicum of responsibility from Albany and a little innovation in trhe racing office and in marketing, NYRA might well have some hope for the future.

To compare the two race meetings, I looked at the data for the past four weekends, from June 18th through July 11th -- including the July 4th holiday -- for the two tracks. That's 13 racing days at each track. The comparison showed some interesting numbers:

Handle: Monmouth had total all-sources handle of $98.2 million for the 13 race days, an average of $7.6 million daily, or $629,000 for each of the 156 races run during the four weeks. Belmont, on the same 13 days, had a total handle of $112 million, or $8.6 million and $882,000 per race. Belmont ran a total of 127 races on the 13 days -- mostly 9- and 10-race cards, compared to the 12 races daily at Monmouth.

Field Size: The edge in handle for Belmont is even more impressive when one takes into account that Monmouth averaged 9.0 starters per race during the period, while Belmont barely managed 7.0 starters. Since handle generally increases in an almost linear relationship with field size, it's clear that Belmont would have done even better had it managed to come closer to its long-term target of eight starters per race.

Some of the difference in field size was unquestionably accounted for by the high purses offered at Monmouth, as well as the guarantee of a $1,500 payout for every starter at Monmouth. When you can pick up a $1,500 check for finishing 8th in a $5,000 claimer, the Monmouth entry box looks pretty attractive.

Purses: Monmouth had been touting "a million a day" in purses, and it's true that the condition book did add up to $1 million each day -- but only if you considered not only the 12 races that were actually run, but also the races in the book that weren't used and the extras put up by the racing secretary. In fact, for the 13 days in question, actual purses awarded topped $1 million on only two days, and the average was $807,000 a day, or $67,300 per race. True, that was a lot more than was paid out at Belmont, where purses averaged $452,000 a day, or $46,300 per race. But with higher purses on offer by NYRA at the upcoming Saratoga meet, the per-race difference may not be as big as some New York-based owners and trainers feared.

Quality of Races: There were some striking differences between the two tracks in the type and quality of the races offered. In the 13 days, Monmouth offered 17 stakes races, compared to only 7 at Belmont. Monmouth had 36 allowances (23% of all races), of which 11 were for the limited pool of New Jersey-breds. Belmont, in the same period, ran 31 allowances (24% of the total), of which 12 were for its much larger pool of state-breds. Monmouth had 20 maiden special weights, nine of them for state-breds.a, while Belmont had 26, 15 of which were for NY-breds. Belmont had 20 maiden claimers (16% of its total), compared to only 18 at Monmouth (11.5%).

The big difference was in the nature and quality of the claiming races. Apart from the maiden claimers, Monmouth ran 63 claiming races (40% of its total), while Belmont ran 35 (28%). But Monmouth's races were almost entirely open claimers, spread reasonably equally over the price spectrum: 15 at claiming prices above $25,000, 22 at $10,000-$25,000, and 25 below $10,000. In New York, by contrast, racing secretary P J Campo continues his infatuation with conditioned claimers -- races for non-winners of two or three lifetime, for horses that haven't won in six months, etc. Of the 35 claiming races at Belmont, 27 -- nearly 80% -- were conditioned claimers. A few years ago, New York didn't run any of these races. Now it runs nothing but. I don't know whether P J could fill a racing card without resorting to the conditioned claimers, but the anemic 7.0 starters per race average over my study period suggests he might not have done any worse had he stuck to the traditional open claiming structure. And he would have had the added excitement of lots more claiming activity. At Monmouth, in the 13 racing days from June 18th through July 11th, 109 horses were claimed -- more than 8 per day. At Belmont, total claims for the same 13 racing days were 14, barely one per day. There just aren't the races at Belmont with attractive claim prospects, and the trainer making a claim doesn't have the options for future races that would be available with a more traditional claiming structure.

No wonder I've been having a hard time finding a suitable claim for my claiming partnership. If it weren't that we all want to race in New York, I'd be looking at Monmouth. And most people who want to make new claims are already there. I don't know if Charlie Hayward and P J Campo consciously set out to destroy the claiming game in New York, but, whether intentional or not, that's what they're doing.

As the figures above show, NYRA and the Belmont meet held up pretty well against Monmouth's challenge. But claiming is an important part of a race meeting, and by stifling claiming activity through a surfeit of conditioned claimers, NYRA is endangering the longer-term health of an important segment of the industry.

6 comments:

Steve Zorn said...

Good question, to which I don't know the answer. I don't have as good a handle on Monmouth's finances as I do on NYRA's.

This year, Monmouth is getting a big cash infusion from the casinos. That won't go on forever, so the question at the end of their summer meet will be: can it be sustained without a subsidy (doubtful) or can it continue with a lower level of subsidy that the casinos will be willing to pay to keep slots out of the race track?

I'll try to figure out a methodology for answering that question by the time the meet ends, as well as comparing Monmouth's record over the next six weeks with that of Saratoga.

The_Knight_Sky said...

I think we should all be reminded of the fact that Monmouth Park's goal at the outset was to produce proof that Live Thoroughbred Racing was worth saving in the state of New Jersey.

Apparently a mountain of evidence is growing that it is.

The early comparisons between Monmouth Park figures versus Belmont Park is akin to comparing a phenom to an aging veteran. A rookie Dwight Gooden to an enshrined Bob Gibson.

We haven't yet reached the All-Star Game but comparisons to Bob Gibson has to be major flattery to the NJSEA and the NJTHA at this point.

Carlo Zuccoli said...

Good article, but one very important point is missed: what about the takeout fot the various bets at Monmouth and at Belmont?
How much do they ask for the simulcasting, I mean for the TV and betting rights from the various hubs?Sincerely

Carlo Zuccoli
czuccol@tin.it

Pacingguy said...

Actually, there is no wonder tht Belmont still does well against Monmouth. Belmont still draws from a larger population center than Monmouth so you would expect them to do better.

Can Monmouth substain these purses next year without the subsidy? Probably not, but the purses will still be higher than they were last year. More importantly, think how poor purses will be next year if they ran as many races as they did in 2009.

pjleftg said...

Steve;
great atricle. Most info about handle is never reported in any context. Everyone is rejoicing about Monmouth but nobody seems to know what the numbers. I understand the basic equation is that handle pay purses. What's Monmouth's real takeout? 7%? So, 50 days x 8,000,000 per day = 400,000,000 x 7% = 24,000,000 for purses or about 560,000 per day. To get 50mm, they need a net takeout of 13%. Any idea what their real takeout is? I used 7% because I saw it in a 10k report for Churchill several years ago.

Steve Zorn said...

I just wrote the following to the Derby list online:


I recently looked at the Monmouth numbers in my Business of Racing blog (http://businessofracing.blogspot.com). Over a four-week period, Monmouth's average all-sources handle was $679,000 per race. The average purse for those races was $67,300. Putting those two numbers together implies a takeout rate of 10.7% just to cover the purse cost, not to mention Monmouth's own operating cost. Few tracks in the US dedicate more than 7-8% of on-track handle to purses, and the percentage for off-treack sources is, of course, much less.

In Monmouth's case, about 90% of all-sources handle is off-track. Since the NJSEA does not have its own OTB or ADW network, it's hard to see how they can be getting more that 7%, at most, from those off-track bets. Assuming a takeout rate of 20% on-track and 7% off-track, that results in an all-sources blended return to the track of 8,3%, far below the 10.7% that Monmouth is paying out in purses. Not sustainable without subsidies or slots.