Why California horse racing is struggling to safe its future

Because the wildfires devastated components of the San Gabriel Valley, Santa Anita Park did what locals all the time have counted on the 80-year-old observe to do. It stepped up and fulfilled its position as a group citizen.

It canceled racing the primary week after the fires in order that the observe’s expansive area may very well be used as a middle for donation assortment and distribution, staging utility autos that had been serving to struggle the fires and housing giant animals that would not be accommodated at animal shelters. The observe was unaffected by the fires and the air high quality was nicely inside the vary for secure racing.

Santa Anita did what was finest for Arcadia, Altadena, Pasadena and different areas that had been affected by the worst hearth catastrophe in L.A. historical past.

It’s not the primary time Santa Anita has stepped up. It donated the land on the nook of Huntington and Baldwin for a fireplace station. It additionally gave away the land close to the observe that homes the Arcadia Metropolis Corridor and police division.

However these charitable gestures are getting tougher to tug off. The game is a long time previous the times when vehicles would again up onto Baldwin Avenue after leaving the 210 freeway, spectators simply attempting to get into the Santa Anita parking zone. The Santa Anita Handicap is now not a must-attend occasion for horsemen nationally. Gone are aggressive purses due to the shortage of a secondary supply of earnings comparable to on line casino playing. Discipline sizes are so small that it cripples wagering. And attendance is a fraction of what it was years in the past.

The unfathomable concept that the observe could quickly shut or be bought is nearer to actuality than ever.

The Stronach Group, proprietor of Santa Anita and Gulfstream Park in Florida, has employed Keith Brackpool, a former TSG govt and chairman of the California Horse Racing Board, to kick the tires on a potential sale of the corporate’s 1/ST Racing division and the tracks, in keeping with two individuals with data of the state of affairs not approved to talk publicly.

Whereas they publicly are saying Santa Anita isn’t on the market, Brackpool met with at the very least one investor concerning the sale, in keeping with the 2 individuals with data of the state of affairs not approved to debate it publicly. The understanding is that if the observe had been bought, whoever buys it will proceed racing at the very least within the quick time period.

The worth tag of $2 billion was regarded as too excessive for at the very least one potential purchaser who was extra within the look-and-see mode, the individuals mentioned. The land the 2 properties sit on is well price greater than $2 billion, however as race tracks, not a lot.

TSG denied a Instances request for an interview with Brackpool and he didn’t return a telephone message.

Whereas neither confirming nor denying the small print, TSG issued an announcement that learn: “Racing in California is going through difficult financial circumstances. This isn’t a simple downside to resolve. We’re repeatedly eager about options and in discussions with varied stakeholders about one of the best ways ahead. These discussions stay ongoing.”

The menace to racing in California is existential. And if racing within the state had been to go away, it isn’t only a California downside. The branches of the game are intertwined nationally regardless of the territoriality that exists between racing organizations. Racing is a four-legged stool, with one of many legs being Kentucky; one other New York; tracks that maintain boutique meets comparable to Keeneland in Kentucky, Oaklawn in Arkansas and the winter meets at Gulfstream and Tampa Bay in Florida; and eventually there’s California.

If racing turns into a three-legged stool, the probabilities of collapse are main.

Santa Anita has been there when the group wanted assist. However now, it’s the observe that wants assist. And by extension, so does horse racing in the USA.

The larger query: Is anyone prepared to assist them?

As a way to discover out what racing executives take into consideration the way forward for racing in California and the U.S., The Instances spent a number of days on the fiftieth International Symposium on Racing in Tucson in December.

About two dozen business individuals painted an image laced with shreds of optimism, however provided that California can get Historic Horse Racing (HHR), an digital gaming product, to complement purses. With out it, few see hope of survival. The tracks say they’re working towards an answer however supply little public proof of success because it doubtless would take an settlement with Native American tribes, which management non-pari-mutuel playing in California.

The issues with racing didn’t simply crop up. The decline has been occurring for fairly a while.

Sal Sinatra, 60, has been round horses since he was 12 years outdated. He grew up within the enterprise and was the vp of racing at Parx Racing in Pennsylvania, president and basic supervisor of the Maryland Jockey Membership and chief govt of Equibase, an organization that provides racing statistics.

He’s presently a advisor for the Horseracing Integrity and Security Authority.

“I play fantasy sports activities,” Sinatra mentioned, talking as a horse proprietor, not as a HISA advisor. “Final evening I used to be up all evening as a result of I performed in a awful $10 event and I received $10,000. I’ve extra enjoyment doing that. I stay in Lexington [Ky.] and each bar has [FanDuel] on, I’ve a [betting] account. I don’t even search for on the observe or guess something.”

Now, don’t mistake Sinatra as somebody who has deserted the game. He had simply completed a workshop with most of the nation’s racing secretaries, providing concepts on the right way to make the game extra engaging to prospects. He actually desires horse racing to thrive, he’s simply unsure how.

“I’ve two mares at dwelling, and I’m unsure what I’m doing as a result of I don’t know what it’s going to be like in three or 4 years,” Sinatra mentioned. “We transfer like snails on this business. If we don’t shield the small outfits [trainers and owners], whether or not it’s by rankings classifications quite than claiming [races], the game is proscribed.

“It’s the individuals who used to breed and race for pleasure, the individuals who protected horse racing now see it as time to retire, they’re out of the sport. I feel it’s essential to have a look at that sector. I actually consider there’s numerous purse cash on the market that’s not being paid correctly to maintain the financial engine flowing.”

Sinatra was fast to recall tales of his time on the entrance line of racing, particularly operating the Maryland Jockey Membership, whose marquee race is the Preakness Stakes.

He painted an image of dysfunction that included exaggerated attendance numbers, a former boss’ obsession with mutuel deal with (going as far as to present Sinatra wads of cash to guess to present the mutuel pool head begin), and deficits in his racing finances due to having to maneuver cash from racing to help big-name musical expertise on the Preakness.

He instructed the roots of the issues prolong past Maryland and have been round racing for many years.

“Simulcasting has destroyed us,” he mentioned, referring to the apply of broadcasting races on TV or at different tracks the place betting can happen. “All of us thought we had discovered cash after which the simulcasters had been in our personal state and our personal yard. We simply poached our personal bettors away. That’s all we did, for much less cash. It’s simply insane.”

Sinatra additionally believes the inflow of cash by means of on line casino playing has been an issue for the business.

“The casinos do higher after we race as if we’re a sideshow for them,” Sinatra mentioned. “So, they need us to run and don’t care if you happen to run five-horse fields and make no deal with. When my finances comes out, I’ve misplaced $3 million and I need to lower days however I can’t.

“When the subsidies got here in, we did the fallacious factor. We simply mentioned, ‘OK, right here’s your hundreds of thousands of {dollars}, horsemen, enhance purses.’ And numerous issues had been fallacious.”

Sinatra thinks there must be coordination between observe organizations, which traditionally has been as achievable as detente between the Hatfields and McCoys. A really outdated analogy for entrenched rivalries in a sport that’s growing old not so gracefully.

“Once I was first at Parx and it went from $125,000 [in purses] a day to $250,000 a day, and I had all this extra cash for stakes,” Sinatra mentioned, “I known as The Jockey Membership, and I mentioned, ‘Earlier than I do that, I ought to contact the graded stakes committee and recommend what races I’m going so as to add cash to’ and the group says ‘No, there are already three in that class.’

“You need to both enhance distances or put them on totally different surfaces. That’s what they need to must do. However they are saying they’ll’t try this. I’m like, nicely, in any other case, everyone’s going to have million-dollar races in all places and there’s no planning, there’s nothing.

“That is madness, what we do.”

So, does Sinatra have any hope for California?

“Beneath the present area, I’d say no,” he mentioned. “Horses aren’t coming to California. In my estimation as an East Coaster, they killed off the north, which is the place most of your farms are. So now, what are you going to do? Provide California with horses purchased from Kentucky? It doesn’t appear proper.”

California didn’t get to this place in a single day. A few of the wounds are self-inflicted. Different issues, and essentially the most tough to resolve, cope with the altering sports activities panorama and the gulf between individuals who view horses as pets and those that view them as livestock.

TSG, pushed by racing pursuits in Southern California, performed a recreation of Sophie’s Selection, deciding it wanted to kill racing in Northern California to avoid wasting racing to the south.

TSG clumsily introduced the deliberate closure of its Northern California mainstay, Golden Gate Fields, on the finish of 2023 with out consulting its stakeholders. It agreed — some may say was compelled — to maintain the observe open one other six months if there was no protest a few deliberate legislative modification that the simulcast cash usually focused for the north would go to the south if there isn’t any racing within the north.

The north capitulated and even deliberate its personal circuit, calling it Golden State Racing. It ran for 25 days, failed to satisfy any of its monetary objectives and pulled its license software for this yr.

TSG could have been the architect of the closure of Northern California racing, however the Thoroughbred House owners of California was driving the getaway automobile, primarily supporting racing solely in Southern California. It drew up benchmarks for achievement within the north that even Santa Anita would have had problem executing. A number of Northern California board members stop in protest.

At one level in coping with the California Horse Racing Board, Craig Fravel, the previous chief govt of 1/ST Racing, despatched a letter threatening the board with closing Santa Anita if it didn’t get its method.

TSG lately went to the identical playbook in regard to Gulfstream Park. The observe’s operators are pushing for one thing known as “decoupling,” which might imply it might function its slot-based on line casino with out having to run horse racing. The identical decoupling occurred to canine racing, harness racing, quarter-horse racing and jai alai a couple of years in the past. Canine racing was killed by poll initiative in Florida and the opposite sports activities are, for all intents and functions, nonexistent.

At a latest assembly with Florida horsemen, Brackpool and TSG govt Stephen Screnci mentioned if horsemen don’t oppose decoupling, they’ll promise racing for at the very least three extra years. In the event that they oppose it, the observe might shut sooner.

The horsemen took it as a menace as one may anticipate, resulting in a fistfight after the assembly.

TSG chief govt Belinda Stronach poured gasoline on the state of affairs in an interview on NBC throughout protection of the Pegasus World Championship final week when she mentioned: “The actual fact is that Gulfstream Park is now in a really dense, city setting, and that’s not nice for horses, in the end.”

Not talked about is that each one three Triple Crown races — the Kentucky Derby (Louisville, Ky.), the Preakness (Baltimore) and the Belmont Stakes (quickly to be again in Lengthy Island after a rebuild) — are in city areas.

Jerry Bailey, a Corridor of Fame jockey and NBC commentator, said after the section that Gulfstream Park could be gone in 10 years.

Any method you have a look at it, the decoupling transfer makes a possible sale of the observe rather a lot simpler.

Blackpool, a controversial determine in California who has settled lawsuits he filed in opposition to Stronach, is taking part in a big position main discussions about the way forward for racing. Lacking from the Florida assembly with horsemen was Aidan Butler, the present chief govt of 1/ST Racing. Butler, when reached by The Instances, declined to debate any side of firm enterprise, as an alternative referring to the assertion issued by TSG.

The one factor that almost all agree on is that there’s an excessive amount of racing. The issue is that contraction is nice so long as it’s not your enterprise that’s contracting. And therein lies one other downside racing hasn’t fastened.

“I suppose there’s a distinction between contraction and a sport dying,” mentioned Robert Hartman, chair of the celebrated Race Observe Trade Program on the College of Arizona and host of the annual world symposium.

“Let’s say that wholesome contraction may very well be good for an business. You see what’s occurring in California. Some decided that one racing circuit might make racing wholesome and bolster that circuit. The worry is 2 unhealthy racing circuits could result in them each dying.

“That kind of contraction may very well be useful to the business. It’s not simply racing, it occurs in meals merchandise or car manufacturing or different industries [where contraction] makes that business more healthy.”

Craig Dado, who was a Del Mar advertising govt for twenty years and is presently the president of Sports activities Harm Central, attracts an analogy to skilled sports activities.

“We’ve all the time argued [there is too much racing] from a advertising perspective,” Dado mentioned. “You’ve bought 18 NFL video games a yr per workforce. You’ve bought 162 baseball video games. If you happen to run 4 days every week, 52 weeks a yr, my goodness, that is likely to be an excessive amount of.

“Perhaps the market is telling you there’s an excessive amount of. Perhaps we want breaks. Each thought like that comes with an entire set of negatives as to why it doesn’t work. So, there’s no straightforward reply in California, however I’m praying that they determine it out, as a result of I’m a horse proprietor and I nonetheless love going to the gate, going to the tracks, so I hope it really works out.”

The racing panorama in California modified in 2013 when Hollywood Park closed and ultimately turned SoFi Stadium. The game believed it wanted year-round racing. Santa Anita elevated its signature meet to about six months, not together with its fall assembly. Del Mar added a monthlong fall assembly to its summer time meet. And Los Alamitos, a quarter-horse observe, was the true hero, reconfiguring its observe to a mile and including about six weeks of daytime thoroughbred racing to fill the gaps.

However was that the proper transfer?

“There’s no query that the much less you run, the extra demand there’s on your product,” Dado mentioned. “It’s old-school Economics 101, provide and demand. The extra you run, the much less demand there’s going to be. Nevertheless, while you add in all these further dates, though you’re not as massive per day, it nonetheless could make a greater enterprise platform. Particularly when your state is mainly saying, ‘If you happen to don’t do it, we’re not going to make it.’ Then they compelled Del Mar’s arms.

“Did we need to add the autumn dates? There was numerous consternation over that, however one of many causes we actually agreed to do it’s as a result of we thought we’d get the Breeders’ Cup by doing it. That was the feather within the cap of that dialogue.”

This yr Del Mar will host the Breeders’ Cup for the third time and second yr in a row.

“Let’s say Del Mar provides three extra weeks [if Santa Anita were to stop racing],” Dado mentioned. “Would Del Mar need to do it? In all probability not as a result of it’s going to make these days that they have already got much less particular. But when the business is saying they should do it, then Del Mar’s going to must step up.”

Joe Morris, the previous head of West Coast racing for TSG and presently the senior vice-president of racing for Caesars Leisure, factors to a specific downside.

“The system to constructing deal with and having a profitable meet is you want the inventory,” Morris mentioned. “I don’t suppose they’ll repair the issue. Thirty years in the past, there have been 20 to 25 main farms in California. Now there are only a handful. So, the place are you going to get the product? The price of residing is such that it’s arduous to go on the market if you’re a coach and put your assist up and issues like that.”

When Santa Anita’s house owners closed Golden Gate, considered one of their plans was to begin rebuilding all of the barns at Santa Anita. Nineteen months after the announcement, there was no considerable development on the barns.

“I don’t see them ever getting the product,” Morris mentioned. “Can Del Mar get sufficient to ship in? I don’t know. If you happen to don’t have product, you don’t have racing. So now you’re racing quick fields and fewer races and the gamblers know that’s not what they want. They need extra races and full fields.”

In 1990, there have been 44,143 horses foaled in North America, which incorporates Canada and Puerto Rico. In 2023, it was right down to an estimated 18,500. The foal crop has declined the final eight years.

Marshall Gramm, 51, is a numbers man. He’s a professor of economics at Rhodes Faculty in Memphis who has revealed a number of papers about playing and horse racing. He teaches a category within the economics of wagering. Gramm is a daily participant within the Nationwide Horseplayers Championship.

It’s an odd spot for somebody who was not uncovered to racing as a toddler. However Gramm, who can be a horse proprietor, is hooked on the info and the handicapping recreation.

“Kentucky and Arkansas look fairly secure, and now we have this new dedication to Maryland and New York, so I feel that there’s in all probability extra optimism now about what the long run might carry general within the panorama than what it was a few years in the past,” Gramm mentioned.

“What occurs in Florida, what occurs in Texas, what occurs with HISA, what occurs in California, these are totally different questions. Everybody I’ve talked to believes that California can be gone in a few years. I’m not as pessimistic, however possibly it’s as a result of I’m naive.”

Gramm ran horses at Golden Gate and acknowledges his coach is fighting the closure. He additionally believes the success of some trainers, whereas creating stars for the game, additionally could also be hurting the business.

“The fact with closing Golden Gate is none of these horses might actually race in Southern California,” Gramm mentioned. “I don’t know what they’ll do to draw horses. They’ve some trainers and house owners who’re actually dedicated to racing there, and I feel that’s good. However the draw back is the product isn’t as robust as a result of as now we have consolidation, you get races being dominated by two or three trainers.

“Each turf race is dominated by [Phil] D’Amato and each filth race is [Bob] Baffert. When you have a child there they usually’re all operating in opposition to three Bafferts, that’s not shopper product, proper? That’s the issue in all places.”

Gramm fears the answer to racing’s issues additionally could also be its eventual downfall.

“I’m not in love with various gaming supporting our business,” Gramm mentioned. “I’m not in love with the truth that to make our business go, now we have to have some form of manufactured monopoly and different playing.

“It turns the racetrack and racetrack operators into individuals who find yourself looking for authorities help. They care much less about their prospects in constructing product than they do concerning the authorities. And in the end the tail wags the canine, the on line casino issues extra after which they don’t even care about racing.”

Gramm additionally notes subsidies solely assist trainers and house owners and never the typical horse participant.

“The slots gamers are Band-Aids as a result of they’re not going to be horse gamers,” Gramm mentioned. “And the times of the numbers gamers coming and taking part in the horses or canine doesn’t exist anymore. Perhaps if it might tip the scales in the proper path and assist flip these subsidies into serving to horse gamers and making a greater product, then I nonetheless suppose it’s a troublesome long-run proposition until you get individuals taking part in the product.”

Gramm understands predicting the long run is a idiot’s recreation.

“5 years is brief, however what is going to the game appear to be in 20 years, 25 years?” he mentioned. “Are we simply racing in Kentucky and Arkansas? Are we simply racing in crimson states? I don’t know, and that’s what worries me with every thing that we need to attempt to do. I don’t know if minds could be modified with the prevailing path that we’re going. A lot about every thing can change, I imply, are individuals going to be consuming meat in 30 years?”

It’s tough to search out somebody truthfully bullish concerning the sport. Even these most constructive concerning the future have some trepidation.

“I can’t think about a racing world with out California,” mentioned Lisa Lazarus, chief govt of HISA, a corporation that’s going through authorized challenges to its constitutionality that additionally might put it out of enterprise in 5 years or much less. Two U.S. appeals courts dominated in a different way on the constitutionality of HISA, leaving its future in a state of flux. The U.S. Supreme Courtroom didn’t embody the difficulty on its docket for the present session.

“All people believes California is essential to the ecosystem,” Lazarus mentioned. “There are some very sensible individuals on the market, so I’ve full confidence that they’re going to discover a method to herald supplemental earnings.”

Lazarus isn’t the primary to supply a suggestion primarily based on cooperation among the many tracks and states, who sometimes have an interest solely in benefiting their very own pursuits. Often they get collectively, comparable to lately when the New York Racing Assn. and Churchill Downs Inc. mixed to sue HISA over the prices it costs states. NYRA lately settled; CDI didn’t.

“Everybody is aware of that issues can’t keep the way in which they’re, simply preventing for survival,” Lazarus mentioned. “I don’t suppose it’s presently potential underneath Kentucky legislation now, however I feel it’s so vital to the ecosystem that you might doubtlessly see another jurisdictions form of stepping in to complement California.

“That is all theoretical as a result of proper now the KTDF [Kentucky Thoroughbred Development Fund] is restricted to Kentucky. But when there was flexibility to ship purse cash elsewhere, then they might think about it as a result of they’ve a lot purse cash in there.”

Donna Barton Brothers, a former jockey and presently an NBC analyst who’s all the time the primary particular person to interview the profitable jockey of the Kentucky Derby from her horse, sees either side to the argument for Kentucky bailing out California purses.

“You’ve bought legislators in Kentucky, like state Sen. Damon Thayer and Home Speaker David Osborne, who’ve fought actually arduous for the place Kentucky is true now,” Brothers mentioned. “After which they have a look at California and go, ‘What are the legislators doing there? What are the lobbyists doing there? What are the racetracks doing to work with the lobbyists to work with the legislators to make that occur in California?’ So why does all of the stuff that we’ve labored for now have for use to subsidize California racing?’

“On the flip aspect, is Keeneland going to have the ability to have a $1.46-billion financial impression if you happen to don’t have individuals in California taken with shopping for horses from the Keeneland gross sales?”

Brothers’ hypothetical concerning the California legislature does bear a re-examination. For essentially the most half, politicians in California have completed little to help the racing business, as an alternative focusing extra on horse security than horse racing.

Gov. Gavin Newsom and the late Sen. Dianne Feinstein each had been outspoken in the course of the 2019 disaster of horse deaths at Santa Anita.

“How are we going to get Sacramento to love horse racing?” coach Bob Baffert requested rhetorically whereas talking on a panel in Tucson with fellow Corridor of Famer Todd Pletcher.

“It’s such an enormous state and that query is one thing I want I had the reply to. Until we will discover another approach to enhance the purses, like Churchill Downs, Oaklawn, New York, [we’ve got difficulties]. What California has to supply is the climate, it’s an important place to get horses prepared and it comes right down to how can we get California to love horse racing?”

So, right here everybody in California horse racing sits. A collection of identifiable issues with some potential options however seemingly not sufficient motion to resolve these issues. Racing executives within the state say they’re engaged on it however decline to talk publicly about it, leaving the horsemen shaking their heads in frustration.

“We want as an business for California to succeed,” mentioned Pletcher, the coach who spoke on a panel alongside Baffert. “It’s nice what’s occurring in Kentucky with the purses but it surely’s having a detrimental impact on the opposite states as a result of the purse construction is so excessive in some locations but in California they don’t have these benefits with a declining horse inhabitants.”

Louis Cella and his household are behind considered one of racing’s most profitable tales. The house owners of Arkansas’ Oaklawn Park had been the primary to place historic horse racing machines at their observe. The ability does an important native enterprise and holds outstanding races. However even Cella sees the chance for achievement in California as restricted.

“You have a look at California and until they arrive with an answer to extend purses, I don’t suppose they survive in 5 years,” Cella mentioned. “I don’t see how that occurs or at the very least on the extent they’re presently operating at. I feel they’ve an incredible headwind in entrance of them.”

Racing leaders in California, underneath the guise of the Horse Energy Coalition, funded a survey concerning the impression of horses on the state financial system. The survey was despatched out shortly after it was introduced that Golden Gate was closing.

It was timed to be a complement to the nationwide American Horse Council Financial Influence Research. A information convention was scheduled within the paddock of Santa Anita to boast concerning the alleged $11.6-billion financial impression, as decided by the self-funded examine.

The information convention was rapidly canceled when no media confirmed as much as cowl the announcement.

Is that occasion emblematic of the state of and curiosity in horse racing in California, or simply unhealthy advertising?