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Sunday, November 25, 2007

I'm Not (Quite) There

- I made a grievous error in my last post, forgetting that Pool Land is trained by Tom Albertrani, and not by Todd Pletcher. That's been the case ever since she returned from her long vacation in September. Well, once a Pletcher, always a Pletcher, I say. I must say I've had a hard time getting too excited about the stakes races this weekend; it's just that time of the year. There's never really too much of a downtime in this sport, unlike most others, and personally, I could use one. If there's anything that constitutes an offseason, maybe it's starting right now, the few weeks before Santa Anita opens on the day after Christmas, Gulfstream a week or so later, plunging us headlong into the run-up to the first Saturday in May, and here we go again.

I did go to the Big A on Thursday, and I had a great time, but found that once was more than enough for this holiday. So I was not there amongst the 4,712 who turned out for what is billed as the biggest day of the Aqueduct fall meeting, as we instead opted to see I'm Not There, Todd Haynes' dreamily beautiful tribute to Bob Dylan (and to, the Head Chef insists, Fellini). And Cate Blanchett is incredible, oh my!!!

This commenter presented a bleak picture of racing as a live spectator sport in this state.

The live product is dead, or at least dying. According to Bennett
Liebman of Albany Law School, since "legislation was passed in 2001 to decrease takeout at NYRA (and hopefully increase handle at NYRA), live handle on NYRA races is down by 22.7%. Taking into account cost of living increases, the "real" decrease in live NYRA handle since 2000 is 34%. Perhaps the decreased takeout reduced the losses of handle at NYRA; it certainly did not grow the handle. See, Liebman, New York
Racing By the Numbers in 2006.
He/she also discusses the numerous tax breaks given to NYRA, the low rates being received for its simulcast signal, and opines that "perhaps" the OTB's are paying too little.

It's true that NYRA should be getting more for its signal, but my understanding is that that's an industry-wide problem and not one specific to New York. But if the difference between what NYRA gets from bets placed at OTB's now and what it would if they were treated the same as bets placed on-track is not enough to put this business into the black, then I don't really know what to say. Otherwise, wouldn't racing jurisdictions all over the country be bleeding money as well? Why only here? If you look at the Fair Grounds, nobody goes to the live races there, though we no longer know the numbers since Churchill doesn't announce attendance; but as I recall, big race days there would draw no more than a few thousand, as in New York. Yet, purse levels are thriving in large part because of big business at the OTB's, which are part of the track operation. And a look at Churchill's financial statement shows that the company's 'Louisiana Operations' made a $230,000 profit in the quarter from January to March this year.

Now, this is admittedly a simplistic comparison; I'm not armed with the facts and figures that the commenter is. But it just doesn't make sense that this sport could be losing $30 million a year unless something is extremely askew. That's just the opinion of an informed fan. Very, very occasionally, I just might possibly maybe come off in a post as if I'm an expert on the economics and machinations of the subject, and I don't mean to, because I'm not. I'm searching for the answers like everyone else. I can't answer the question posed by the commenter as to why it seems as if it's only in the last five years that the losses have been so huge. That's a good question indeed; only a portion can be attributed to bankruptcy costs. Certainly the continued on-track handle decline is a contributing factor.

When I write that the OTB situation needs to change, to a certain extent it's simply because I don't know what else to say at this point. New York is the only state that has competing OTB's that are taking a majority of the handle, and it's the only state I know of in which the track operator is suffering losses anywhere near this magnitude. And besides, if that is not the reason for the situation, then all of us in New York need to find something else to do with ourselves. Like seeing good movies.


Anonymous said...

The fact that NYC OTB actually MADE 7 million last year (when adding back the surcharge) lends a lot of weight to the argument that combing the OTB's with the tracks would make NYRA profitable.

Once you factor in the duplications in their operations and presumably a reduction in patronage the operations would easily show a profit.

It's the NY model that is broken.

The overall industry model contributes to minimizing profits, but the NY model eliminates them.

Anonymous said...

One thing to note in the figures, while the operations make a profit at the SPA, the purse account take a huge loss.

The SPA purses would not be sustainable without the remaining 11 months of operations and without the purses the meet would suffer, so separation of the meets by ownership is not viable.

Anonymous said...

They don't make very good movies any more.
Maybe one a year worth seeing.

ljk said...

"If you look at the Fair Grounds, nobody goes to the live races there..."

The first time I decided to go to Fairgrounds for the LA Derby I worked hard to get reserved seats before I arrived. When I got there I found you could just pay clubhouse admission and sit in air conditioned smoke-free comfort very near the finish line.

I've made a tradition out of going to the LA Derby, a good facility with as Alan points out, no crowds.