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Horse racing doesn't get betting windfall amid COVID-19 sports shutdowns
26th March, 21:50As legalized ways of gambling have almost come to a stop, horse racing remains the only sport still open for business. Despite that unique position, it hasn't led to a surge in popularity or revenue to the few tracks still operating.
The tracks that are still running -- Santa Anita and Los Alamitos are among the four in California -- are closed to the general public and open only to the most essential people. In fact, conducting a race card requires far fewer people than when horses have to get out of their stalls every morning if to do no more than jog or gallop.
Santa Anita gets about a third of its pari-mutuel business either on-track or through state inter-track wagering, sometimes called OTBs. However, the lack of other tracks running or no team sports to bet has shifted only about 10% to 20% of new revenue back to the mutuel handle.
This past Saturday and Sunday, Santa Anita had $13.2 million bet on its races. In a comparable weekend in February, there was $18 million bet, $6.4 million of that either on-track or through state inter-track wagering.
Other date comparisons this year showed the same trends, although figures vary day to day based on the number of races and horses that are entered. Last year around this time, Santa Anita was closed because of an increase in horse fatalities.
"No one really thought this would be a great windfall," said Craig Fravel, chief executive for racing at the Stronach Group, which owns Santa Anita and Golden Gate Fields. "I think anybody who is looking at it from that standpoint is missing the big picture. What we're trying to do is sustain the ecosystem in a responsible manner. ... We want to make sure people are following all the protocols while giving them an opportunity to pay their bills."
The Stronach Group is donating 100% of its profits during this time to people impacted by COVID-19.
If racing in California were to stop, the owners, trainers and jockeys would have to look to a jurisdiction that is running. Moving between tracks on the East Coast is easier because of geography. If people were to leave California they might never come back and the industry could collapse in the state.
The territories running are getting fewer. Racing is currently halted at Aqueduct in New York, Laurel in Maryland and Fair Grounds in Louisiana. However, racing continues at Gulfstream and Tampa Bay in Florida, Oaklawn in Arkansas and two Northern California tracks, Golden Gate Fields and Cal Expo, the latter of which is only harness racing track running in the country.
"I haven't seen any evidence that there is an amazing explosion of sports betting going to horse racing as of now," said Alex Waldrop, chief executive of the National Thoroughbred Racing Assn. "But if we can continue to be responsible and race, we may start to draw some of those players who had been betting other sports."
As for the sport's economic fuel, wagering, it's estimated that as much as 90% is done online through advance-deposit wagering (ADWs). Money bet through an ADW while at the track counts as on-track handle, which explains why the math doesn't always add up. And with at least 20 states having stay-at-home orders, it's why so much money can still be bet.
"Horse racing is better off than other forms of gaming," said Kip Levin, president of FanDuel and chief executive of TVG, the horse racing television channel. "Our new customers [to TVG's online betting service] are up substantially. I don't know if they are people who were betting retail at the tracks or OTBs or new overall. It's too early to tell."
The same is true at NYRA Bets, the ADW that is run out of the New York Racing Assn.
"We have seen an increase in new bettors, but we're positive they are not big bettors," said Tony Allevato, president of NYRA Bets. "A significant number are $2 bettors."
There is also an increase of horse racing on television. Fox Sports partnered with NYRA to put on 15 hours of live race programming last weekend. NBC has an agreement with TVG to also provide programming. Both of those shows would contain racing from California.
The racing calendar remains a moving target. This is currently the time the last major prep races for the Kentucky Derby would be run. Last Saturday, Fair Grounds ran the Louisiana Derby and then canceled the rest of its meeting.
Saturday will be the Florida Derby at Gulfstream, and the following Saturday the Santa Anita Derby is scheduled to be run. Next Saturday would normally have the Blue Grass Stakes at Keeneland and Wood Memorial at Aqueduct, but both have been postponed.
The Arkansas Derby has moved to the first Saturday in May -- a date reserved for the Kentucky Derby, which had to be moved to the first Saturday in September.