Monday, September 14, 2020

Saratoga and Del Mar Meets: What the Numbers Tell Us

(published on, September 14, 2020)

         The Saratoga and Del Mar summer meets traditionally mark a bright spot on racing’s long annual calendar. The summer boutique meets have for decades attracted horses and fans from around the country, drawn by high purses, good racing and the vacation atmosphere. So, in this year’s virus-challenged sports environment, the question was whether those race meets, taking place in front of empty grandstands, could once again generate their typical excitement and carry the game for a while.

         The results are decidedly mixed. NYRA’s Saratoga meet recorded better-than-anticipated handle, though the return to the track and to the purse account were substantially below what would have been achieved with a grandstand and back yard full of racegoers. Del Mar, on the other hand, cut its number of racing days by a quarter and suffered some falloff in handle and purses. Here are the details.

         At Saratoga, total betting handle for the 40-day meet was $702.5 million, a decline of only 0.4% from last year’s record total of $705.3 million. Daily handle this year averaged $17,563,387, a drop of 2.9% from last year; the 2019 meet had only 39 race days because of a rain-out. At first glance, not too bad considering the circumstances.

         But the absence of on-track race fans had a bigger impact on NYRA’s bottom line. The track keeps the whole of the (average) 20% takeout on bets made at the race track and through NYRA’s own online betting platform, NYRABets, but, for all those bets made through other outlets, NYRA and its horsemen keep only 6-8%, leaving the rest for the bet processors and for rebates to big bettors. This year. NYRABets handled $64,384,833 (including over $600,000 from a smart promotion that sold betting cards through the local Stewart’s convenience shops). But in 2019, NYRABets and on-track handle totaled $146,618,750. That shift of $80 million-plus to non-NYRA betting outlets this year meant a decline of some $5-6 million in NYRA’s bottom line and the horsemen’s purse account, the latter already under pressure from the virus-driven closure of the Resorts World casino at Aqueduct, which typically generates some 38% of the purse money.

         There were a few negative signs. Field size at Saratoga declined by 6.4%, from 7.9 last year to 7.4 in 2020. And the number of claims dropped substantially. Saratoga is usually a claiming frenzy, as new horses arrive from around the country and owners and trainers drop their horses so they can get a win at the Spa. But this year, hardly any out-of-town horses showed up, except for stakes races. The numbers tell the story: in 2019, 524 claim slips were dropped, resulting in 231 claims. (There are fewer claims than claim slips, because many of the slips are for the same horse, resulting in “shakes” of the dice to determine which of the claimants gets the horse.) This year, only 368 claim slips dropped, and 179 claims were made, a decline of more than 20% in each category.

But still, Saratoga did at least as well as any informed observers could have predicted and, most importantly, did it without recording a single positive virus test among employees, trainers, owners or, to the best of our knowledge, anyone else who managed to get to the track. The casino has now re-opened, albeit at only 25% capacity, and the Belmont fall meet has cut race days and lowered stakes purses, so NYRA and the horsemen will be able to carry on at least a bit longer.

         The Del Mar meet tells a different story, despite an unexpected increase in field size from 8.0 last year to 8.4 in 2020. Immediately after the meet closed, the track sent out press releases reporting a “handle” increase to some $466.7 million, up some 8% from 2019, despite nine fewer race days this year. But “handle” means something different in California. In most of the world, it means the amount bet on that track’s own races; any amount the track receives from bets that patrons make on other tracks is reported as a separate item. But in California, any bets made by California residents on any track are counted as part of the California handle. Bets placed in California on a race at Saratoga, then, will show up in the Saratoga handle, legitimately, as a bet made on a Saratoga race, and then will be counted again, perhaps not quite so legitimately, in the Del Mar handle. This year, because the Kentucky Derby occurred during the Del Mar meet, the $24-million-plus that was bet by Californians on the Derby through the Del Mar wagering hub all showed up as additional Del Mar handle. If the Derby had been run in May as usual, Del Mar would have lost out on that sizeable “handle” increase.

         Backing out that double counting, some $319.6 million was bet this year on the 282 races actually run on the Del Mar track, compared to $33.8 million on 297 races last year; that’s a handle decline of about 4.2%. Looking at the Del Mar figures in historical perspective, total handle 20 years ago was $394.2 million. Adjusting for inflation, which would make that 20-year-old number $595 million in today’s dollars, there’s been a drop of almost 50% over the past 20 years. And with no casino subsidy to keep purses up and the lights turned on, it’s getting harder to see how Del Mar remains, in the long run, a going concern.

         And now, into the fall. We’ll have the highlights of the Preakness and the Breeders Cup, and undoubtedly some memorable races at Belmont, but this year’s impact on racing isn’t over yet. Some 20 tracks that usually host race meets haven’t even run this year, and others, including such onetime jewels as Arlington Park, are on the chopping block. Hard to see at this point how 2021 will be better than this year.

         Note: Like everyone else who reports on racing handle, I owe an enormous debt of gratitude to the Twitter source “@o_crunk,” whose numbers continually pierce the veil of corporate press releases.