Trends Affecting Owners of Thoroughbred Racehorses
My wife and I have been involved in the Thoroughbred breeding industry for almost 20 years. I thought readers would be interested in some of my observations.
Shrinking Base of Racing Fans and the Erosion of Purse Money
The fan base for racing is shrinking, as gamblers generally are being lured into other forms of gaming that promote themselves more effectively. Although this is a clear trend overall, there is an interesting set of sub-dynamics at work. Racing continues to attract a subset of gamblers that feel they can use their handicapping skills to beat the odds, and thus racing will likely maintain some base of loyal fans as long as there are races on which to bet. One notes that poker (another form of gambling based at least partially on skill) enjoyed a meteoric rise in popularity recently, and one hopes that something similar could happen for horse racing, though it’s hard to envision anything like this.
My personal theory here is that there is nothing that can be done to re-establish the level of enthusiasm for horseracing that existed in the 20th century. An obvious part of the modern cultural zeitgeist is the demand for instant gratification; people can no longer be expected to pore over past performance charts and pedigrees in order to make educated bets on 60 second-long races that occur with 30-minute breaks between the action.
The issue for owners, of course, is that this erosion of handle will eventually cause a reduction in the total amount of purse money, unless the industry is effective in developing creative ways to inject additional funds into the system. The best candidate for such an injection is the broadening of the racing experience to include other forms of gaming as well, e.g., slot machines, and, most notably, video racing machines. Such devices instantly reversed the sinking fortunes of tracks in Delaware, West Virginia, and Louisiana.
Extending this to other states where racing is declining, however, seems unlikely, since Thoroughbred owners are not well represented in state legislatures. Generally, owners are an almost completely powerless group that seems to make its situation even worse by failing to organize properly, and by splintering off into factions that fight among themselves, rather than unifying themselves against the challenges they face.
Disappearance of the Race Tracks Themselves
Exacerbating the effects of the eroding fan base is off-track betting and online gambling that has further reduced revenues for tracks in terms of admissions, parking, and food/ beverage. Racetracks are gradually disappearing as real estate management companies see less restrictive and risky uses for their assets and better overall ROI elsewhere.
Dishonest Trainers
Probably the most powerful force working against owners today is the rampant criminality among trainers. I happen to know a few old-time trainers personally who, under the condition of anonymity, have told me dozens of stories, each of which points to one conclusion: the illegal drugging of race horses is the rule, not the exception. The process of testing for illegal drugs is very easy to beat, and is becoming more so each year, as the number of drugs proliferates and new substances are developed that mask the traces of drugs in horses’ systems.
In addition, the penalties for those trainers and track veterinarians who are stupid or clumsy enough to get caught administering the drugs are so minor that they present essentially no deterrent. Put another say, this climate provides huge incentive to cheat, as it’s extremely difficult to win without doing so. As a result, honest trainers are rare, and, because of the huge disadvantage they face, generally have dismal winning percentages.
Understandably, the industry wishes to avoid bad press, and so, even when it finds abuses, tends to keep them quiet. Consequently, I don’t think you should expect to see too much media coverage of this phenomenon.
Those who acknowledge that illegal drugs are ubiquitous in the racing industry normally say that the betting public is the victim, and I suppose it’s hard to dispute that. But clearly the owners lose even more, as their equine assets are systematically broken down, by being forced to run at top speed even when they are severely injured or badly sore. This, of course, makes it less likely than ever that the owners will recoup their costs with purse money.
Breeding for Speed
A few decades ago, it was not uncommon for horses to have 50-or even 75 starts in their careers. Today, a horse with 10 starts is rare. What changed? Yes, illegal drugs have harmed the breed greatly, but drugs have been with us at some level for a long while. However, there have been two major changes that have occurred very recently.
First is the demand for precocity, intended to produce short-term financial returns for owners and trainers. Currently, industry norms dictate that almost every horse entering its racing life is put under intense pressure to run at blistering rates of speed very early in its two year-old year. One-furlong racing previews at the March two year-old in training sales are impressive only if they are accomplished in close to 10 seconds-and often under that mark. Two-furlong previews need to be in the range of 21 seconds.
Many people believe that this super-tough training of young horses is simple abuse, and you won’t find me arguing against that opinion. What isn’t an opinion at all, however, is this: placing two year-olds under this incredible pressure represents an enormous change from the industry norms of a few decades ago. It was only a short while ago that we gave most young horses time to grow up, and allowed their anatomy to form fully before subjecting them to this level of stress.
This demand for speed has broken down a great number of excellent horses who otherwise would likely have gone on to fine careers. But worse yet is the breeding for speed. Until recently, precocity was a lucky accident. Man o’War had 10 starts as a two year-old (in 1919), but this was an extreme rarity. Now precocity is the order of the day. There is no market for horses that are bred for stamina, or for long careers that span four or five years. Today’s market-where it exists at all-is for horses that are bred to run a few lightening-fast races-and then disintegrate. We’ve deliberately-and quite effectively-bred soundness out of the Thoroughbred.
Inbreeding
The other major change also relates to breeding. Over the last decade or so, broodmare owners have focused on a very limited range of fashionable sires. As a result, a huge percentage of the horses racing today are inbred to a very few stallions-almost exclusively from the Northern Dancer and Mr. Prospector lines. The DNA in the breed today is far narrower than it has ever been in history. Anyone with even a basic understanding of high-school biology can see that this fanatical level of inbreeding has resulted in catastrophic damage to the Thoroughbred gene pool.
The Basic Economics of the Industry
Increased costs of labor and materials for breeders, coupled with falling sales prices for mares and babies have results in fewer horses being bred and thus shorter fields (which serves to drive even more racing fans away). I.e., we currently have fewer horses that are competing for purses that, to date, have remained fairly constant. Normally, of course, market conditions like these would produce a demand for more horses to replace those that are breaking down or were not bred in the first place. After all, someone wins the purse of every race that is run.
But the industry is crashing. The Barrett’s January mixed sales and the March two year-old sale were down dramatically from past years. Onlookers stood in shock as many horses whose owners had invested tens or hundreds of thousands of dollars did not get a single starting bid of $900. We’ve build a breeding industry in which a purebred Siamese cat is worth more than many of these two year-old horses that blaze a furlong in 10 seconds flat.
So let us ask ourselves this: Why are sale prices plummeting in a market that is experiencing a diminishing supply in the face of constant demand? The answer, I believe, is contained in the analysis above. The failings of the industry overall have resulted in a hugely negative average return on investment at the typical auction over the last few years. Most of these horses entered to be sold as weanlings, yearling, and two year-olds in training do not survive the brutal training and the abuse of drugs that are injected into them-and only a very small minority generates a substantially positive return for their owners.
Interestingly, the sales companies don’t even try to argue this point. The Barrett’s March sale offered a few hundred two year-olds, and its catalog advertised four or five horses from its previous sales that succeeded on the track. This forces the reader to wonder: Gosh, what happened to the other 99%? The answer, of course, is that they’re standing around somewhere trying to recover from cracked sesamoids, bowed tendons, ruined suspensories-or worse.
Even if owners can somehow avoid being outright cheated, they still have experienced a sharp increase in the costs of training. Together, these issues have formed a market condition that can be summed up as follows: Thoroughbreds are truly terrible investments. Only hobbyists spend money they know they’ll never get back, and, as the economy has tightened, fewer people can afford to participate in this expensive hobby. One can only look at the dismal sales results, the closing of breeding farms, and people leaving the business to acknowledge that the “chickens have come home to roost.”
What We Must Do
Only a complete change in industry practices—whether they come from within or they are forced upon the industry by legislative bodies—can prevent Thoroughbred racing as we know it from becoming a thing of the past. Here are five quick suggestions to consider:
1) Create a Strong National Organization. Form a strong, unified, national organization that works hard with legislators to level the playing field of gambling. Horseracing faces costs that state lotteries and owners of slot machines do not, and legislators need to enact laws that result in the fair and equal treatment of all forms of gambling.
If such an organization were to exist, it would also have the size and scale to perform national advertising campaigns aimed at stemming the erosion of the fan base. In fact, it would be a fairly straightforward task to make “racinos,” if they could be legislated into existence, into extremely popular as nightspots for huge numbers of people.
The NTRA was an attempt to create such an organization. However, it is roundly jeered as a complete catastrophe and rip-off, run by ineffectual fat-cats in posh mahogany offices who have done very little to fight for the rightful position of horse racing. I have no doubt that many people still are feeling the sting of disappointment as the NTRA failed to deliver on even the most basic promises it made when it was established, and I would be understand if these people were skeptical of a new attempt to create an ethical, effective organization. Yet without an organization that is national in scope, it seems impossible for the racing industry to create the level of focused energy and clout necessary to make any real changes in the destiny of Thoroughbred racing.
2) Make a Real Effort to Clean Up the Industry. Enact zero tolerance and hand down tough penalties for trainers and vets who break the very clear rules surrounding fraud and the illicit use of drugs. If you suspend lawbreakers for a few years (rather than a few days) you’ll soon have a climate where trainers think hard before cheating.
3) Don’t Train Babies. Simply do not write races for horses before October 1st of their two year-old seasons. Such a prohibition is the only way to prevent the wanton abuse of young horses that has resulted in the incredible carnage the industry has seen in recent years, and the deterioration in the soundness of the entire breed.
4) Get Our Act Together with Respect to Synthetic Surfaces. It seems that a new report is published every week that goes against the prevailing belief on the efficacy of synthetic surfaces. Clearly, mistakes have been made, and we can’t change the past. But we can simply stop rushing to a quick fix based on a few people’s opinions, in the absence of true science.
In any case, we can certainly stop looking for a one-size-fits-all solution. There are hundreds of different combinations of possible surfaces, average rainfalls, drainage systems, and high and low temperature ranges that exist at the tracks around the country. Somewhere, there must be an optimum choice for each individual track. Perhaps we need a moratorium on change while we study these issues and derive some real science to guide our future decision-making.
As suggested above, however, my personal theory is that, given all the damage we’ve done to the breed, a new surface will not represent a meaningful remedy to issue of soundness.
5) Create Sales Events for “Horses of Racing Age.” Again, we need to acknowledge and deal effectively with the inexorable cultural trend towards instant gratification. The public wants horses ready to go to the track right now. Why not give them what they want? We need to organize yearly sales of horses that have raced, or that are race-ready right now.
Keeping it Real
I’m not cynical by nature, but I do try to be realistic. I know that, for change to occur, there needs to be incentive on the part of those making the change; the sad truth is that things generally do not happen just because they’re “right” or “fair.” Here, we have an entrenched system built around a combination of apathy, ignorance, greed, dishonesty, and special interests. Does the horse racing industry have the guts required to enforce honest, decent behavior? Will it generate the political muscle to deal effectively with the interests that work hard to promote Indian gaming, state lotteries, and other forms of gambling? Again, I don’t wish to appear cynical, but I would say that both are heavy long shots.
Thoroughbred Racing’s Likely Destiny
There will likely always be a top echelon in racing for those who legitimately aspire to win graded stakes races. There is no pressure whatsoever on the sheiks of the UAE and the old money in Kentucky to give up their quests for the Triple Crown, the Breeders Cup Classic and the Dubai Cup. But currently, there is no incentive for anyone to play at any other level—except the desperately poor or self-delusional, hoping for a lucky break, or the few people who do not see these trends and get out while they still can.
Of course, even the big, moneyed players want venues to race their less talented stock. But I’m afraid the days are numbered for full cards at dozens of tracks open simultaneously around the country. If I were to guess, I would say that the ultimate destiny of racing is fewer tracks, a handful of jet-setter owner-hobbyists, with horses that train for a few top events.
