Sunday, January 20, 2013

Time to Think Big in New York

By some measures, New York racing is enjoying great success. According to a press release this week from the New York Racing Association, betting handle in 2012 increased significantly, far outpacing the nationwide trend. In fact, but for the increase in betting at NYRA, nationwide handle would have declined in 2012 compared to the previous year. When NYRA's double digit increases were added in, nationwide handle actually rose 1%.

According to NYRA, all-sources handle, including simulcasting and export handle, was up 11.8 percent to $2.5 billion in 2012 compared to $2.2 billion in 2011. Total handle on NYRA races alone climbed 12.4 percent to $2.2 billion last year over $2.0 billion in 2011.

According to Equibase, handle on all races in the United States rose 1 percent to $10.9 billion in 2012 from $10.8 billion in 2011. 
That means NYRA's racing product accounted for more than 20% of all betting in the country, by far the largest share of any racing operator, and up from 18.5% the previous year.

The $232 million handle increase on NYRA’s races was more than double the $103 million industry-wide handle increase reported by Equibase. In other words, without NYRA's increase, total US handle would have declined by more than $100 million.

At the same time, the usual complaints about winter racing have resurfaced, as they do every January. Five fatal breakdowns on the Aqueduct inner track (through January 19th) are again raising the hackles of animal-rights crusaders, though the breakdown rate this year is well below last winter's alarming 4.2 deaths per 1,000 starts. But any breakdown immediately brings out the possibility of over-reaction. According to someone who should know, NYRA interim chief Ellen McClain told racing officials that, if there were one more fatality, she'd shut down racing. And the sudden burst of breakdowns last week is undoubtedly a reason that the January 25 meeting of the new, state-controlled NYRA Board will be talking about the possibility of installing a synthetic surface at Aqueduct in place of the inner dirt track that has been used for winter racing for many years. While a study of the synthetic option was recommended by last year's Task Force report on Aqueduct fatalities, that same report found no evidence that the inner track's dirt surface had in fact contributed to the rash of breakdowns. One thing is certain, though, installation of a synthetic surface would decrease betting handle on Aqueduct races; many bettors, unable to predict results on plastic/rubber race tracks, simply move their action elsewhere.

The other perennial winter complaint is short fields and bad horses. While, according to NYRA Racing Secretary P. J. Campo, there are some 1,700 horses in residence at Aqueduct and Belmont, hardly any horses are shipping in from elsewhere since New York adopted the toughest drug rules in the country, especially a two-week ban on use of the bronchial dilator Clenbuterol prior to a race. Those tough new drug rules are a good thing, but they'll hurt field size in New York until other states adopt the same rules.

Perhaps in response to the field-size issue, the upcoming NYRA Board meeting will also feature a discussion of reducing the number of race days and the number of races per day. Last year, NYRA ran a total of 245 racing days, and the year before that, 240. State law mandates certain minimums, including 36 days at Saratoga and 95 days during the winter Aqueduct season, so the NYRA Board alone can't make big changes on its own. But raising the issue is a good first step.

But perhaps, instead of applying a (synthetic) band-aid here, and a quick field-size fix (say, going to eight races a day) there, the new Board, charged with converting NYRA into an entity that';s prepared to move forward into at least the 21st century, should take a step back and think big. If the Board were to develop a 10-year plan for New York racing, what would it look like?

I was once involved in the drafting of a five-year plan, back when such things were popular in developing countries, and I once had a horse finish 2nd in something called the Big Dream Stakes at Atlantic City, so, based on those extensive qualifications, and the freedom to dream, here goes:

Where and When to Race? NYRA operates two of the best race tracks in the country, Saratoga and Belmont. It also operates one of the least fan-friendly and most depressing plants, Aqueduct. From the leaks in the press box to the foul smells in the bathrooms, Aqueduct  repels rather than attracts racing fans. Why not abandon Aqueduct to the slot-machine crowd, who don't cross over and bet on the races anyway, and focus on the two places where racing is fun?

Here's a hypothetical schedule, to be phased in over the 10-year period: 

March and November-December  on the Belmont training track, a one-mile oval that could easily manage 10-horse fields. Build a small grandstand where the clockers' stand now sits by the training track, to accommodate the predictably small live crowds in the colder months. Alternatively, winterize a portion of the existing Belmont plant (which has no central heating) and leave the training track as is.

April-June and mid-September through October on the existing Belmont dirt and turf courses. You could even run turf races in November and March on the existing turf courses, with fans in the training-track facility watching on big screens.

July 4th through Labor Day at Saratoga, with solid week or 10-day breaks between both ends of the Saratoga schedule and the adjacent Belmont meets.

Take a two-month break between New Year's day and the re-opening of Belmont in March. 

All that would probably require a reduction in the number of annual racing days, to somewhere around 200, so the New York State Legislature would have to come on board, but it's doable. And, while the elimination of winter racing would be a real hardship to those of us (myself included) who have predominantly claiming horses and who make a significant share of our annual purse money on the Aqueduct inner track, the goal of improving the quality of New York racing requires shared sacrifice. One way to spread the pain, and ease the burden on the non-marquee trainers, would be to impose some limits so that a few trainers couldn't have 100-plus horses each at NYRA facilities while less visible horsemen are just barely eking out a living. But, just as the reduction in foal crops sent some breeders out of the business, the necessary reduction in racing days and the number of races will put some owners and trainers out of business. That's called, I guess, capitalism.

What to do about the horse shortage? According to the Jockey Club, the production of thoroughbred foals in the US has dropped to levels not seen since at least the 1970s. Compared to foal crops of 40,000 in 1990, and 35,000 as recently as 2005 and 2006, the breeding industry has already gone through a massive correction, with foal production dropping to 23,500 in 2011. That's a one-third decline in just a five-year period, a remarkable example of market-driven reality. Recent stabilization of prices at the auction sales suggests that this is the new normal.

At the same time, according to the Jockey Club, the number of US racing days has also declined, but by a far smaller percentage, a drop of 20% from 2006 to 2011. That inevitably means more races chasing fewer horses. Either field size will decline, or the number of races will drop, to match the drop in the foal crop. It may take a while for the numbers to work their way through the system, but something has to give.

So if NYRA can get out ahead of the curve, reducing its number of racing days and perhaps limiting the number of races (say, eight in the colder months, nine at Belmont and, please, no more than 10 at Saratoga), then it can position itself to continue to offer the best racing in the country, and to maintain its position as the supplier of the most desirable simulcast signal.

The Quality of Racing: As always, the January and February condition books at Aqueduct represent the nadir of racing quality in the NYRA calendar. Lots of bottom-level claimers and maiden claimers, few allowances (and most of those require an optional claiming condition in order to fill), Few stakes races (though the four-stakes Saturday on February 2nd, featuring the graded Withers and Toboggan, is an exception), short fields, especially after the now-normal five vet scratches per day, and few new faces among the entrants. While some yearn for the good old days when, supposedly, there were nothing but allowances filled with horses owned by the aristocracy, the reality is that most horses, even in New York, belong in claiming races. But the overall perception of racing quality would certainly improve with the elimination of the worst months and the reduction in the number of races. Even if the same number of races were carded, the percentage of maiden special and allowance heats would rise, and that's a good thing. And it would be nice to see a return to the days when $25,000 was the bottom claiming level at Saratoga.

The quality of the physical plant: Aqueduct is beyond redemption. Despite the so-far-unfulfilled promises of casino operator Genting to refurbish the racing side, this winter is worse than ever. The white tablecloths at the Equestris restaurant are a nice touch, for the few hundred folks who eat there, but not everyone wants a $30 lunch while they make their $2 bets. (Of course, the $8 hot dogs at the snack bar are no bargain either.) It's simply not worth the money it would take to restore the place to even a semblance of a fan-friendly venue. Better to face up to the reality and start drawing up moving plans.

Instead, take the money that would have been thrown into Aqueduct and use it at Belmont, in creating a winter venue at the training track, improving simulcast facilities, sprucing up the family-friendly garden area, etc.

Racing after dark: And what about night racing? Yes, state law now says that thoroughbreds can't run once the trotters start their evening programs, but state law, as we've seen, can be changed. Every other sport basically restricts daytime events to weekends and holidays and runs the rest of the time at night. That's when the fan base is available, especially the younger demographic that race-track executives say they want to attract, but that few have been successful in actually attracting. How about rush-hour trains from Penn Station to Belmont for evening racing on weekdays, with quick shuttles back to Jamaica so folks could get home easily? Take some of that money that could have been thrown away and put it into lights at Belmont. Might do a lot more to attract new fans than, say, pony rides for the kids.

What next? Equally important, who would implement the plan? NYRA really, really needs to fill out its executive suite, installing a new CEO and getting a couple of people at senior management levels who know something about racing. Whatever criticisms one might have had about departed NYRA CEO Charlie Hayward, and there was plenty to criticize, Charlie was a race track guy and knew and loved the game. NYRA sorely needs a few of those folks, instead of, or at least in addition to, the bean counters that it's advertising for.

So, in the unlikely event that the NYRA Board takes my advice, here's what you should do: (1) hire some folks who know a bit about racing and who aren't afraid to think big; (2) let those folks develop a plan to improve the quality of NYRA's racing and facilities; and (3) give them the support and freedom they need to make the plan a reality.