COMMENTARY : Breeders’ Cup, New Ways to Bet: the ‘80s Horse Racing Legacy

The history of horse racing in the 1970s has been neatly and elegantly summarized in a single phrase: the decade of champions. It was the era of Secretariat, Seattle Slew, Affirmed, Alydar, Spectacular Bid and Ruffian, horses whose greatness suggested that the thoroughbred species was advancing to a new plateau.

This didn’t happen, of course. Since Spectacular Bid retired in 1980, the subsequent years have not produced a runner who could be described properly as a super-horse. Even so, the decade has left an indelible mark on the sport’s history. The 1980s can’t be summed up in a pat phrase, but we might write a concise history in two sentences and a footnote:

- The proliferation of intertrack and off-track betting changed the whole industry and its economics.

- The creation of the Breeders’ Cup altered the face of racing as a sport.

- The footnote: The thoroughbred-breeding industry boomed, then collapsed.

Ten years ago, people in the racing industry acknowledged the potential of off-track betting, but they feared it, because the first experiment with OTB, in New York, had been botched so badly. Put under control of a separate political organization, it was a competitor with the tracks instead of an arm of them.

“There had been a 10-year stall because of the New York experience,” race track consultant Tom Aronson said. “The first toe in the water was out-of-state simulcasts of big races, like the Kentucky Derby. Next came intertrack betting. After that, OTB was inevitable. This was something that had to happen.”

In virtually every place where intertrack betting was introduced, racing officials were at first wary because they knew that customers would be siphoned away from the live races, then jubilant over the bottom-line results. When Pimlico started beaming its races to Laurel, the boom in business stunned the tracks’ management.

Intertrack betting in California generated $2-million-a-day handles at county fair tracks and gave Del Mar a once-unimaginable $7.3-million daily average handle this year. And if it made sense to beam races from one established track to another, why not beam them to specially built facilities--i.e., OTB parlors? Illinois has launched off-track betting on a significant scale, and so have other states.

It is no coincidence that most race tracks that have found themselves in dire financial trouble in the 1980s--Hialeah Park in Florida, Suffolk Downs in Massachusetts, Birmingham Race Track in Alabama--are in states that have not legalized off-track or intertrack betting. These new forms of wagering are going to be crucial to tracks’ survival, and the trends that started in the 1980s are unstoppable now.

Although these developments might have been anticipated by a prescient student of thoroughbred racing in 1980, nobody could have imagined the impact of the Breeders’ Cup on the sport. The idea of a one-day $10-million extravaganza of championship races was the brainchild of Kentucky breeder John Gaines, and he won the support of an industry that has been slow to embrace radical change.

Skeptics worried that the Breeders’ Cup would upstage some of the sport’s best-established attractions and, to some extent, they were right. The Jockey Club Gold Cup and Champagne Stakes, two of the country’s most important races, were relegated to the role of preps for the Breeders’ Cup. Laurel had to transfer two of its most important stakes, the Laurel Futurity and the Selima, from the dirt to the turf because of the Breeders’ Cup. Virtually every track’s stakes schedule was affected in some way.

But these negative effects were outweighed by the positive results of the Breeders’ Cup, some of which exceeded even Gaines’ wildest dreams.

Gaines had wanted his creation to be racing’s version of the Super Bowl, but although the Super Bowl has often turned into a crashing anticlimax, the Breeders’ Cup has almost always fulfilled its dramatic potential. It not only was a definitive championship event, but it produced some of the greatest duels in the sport’s history--Ferdinand vs. Alysheba in 1987, Personal Ensign vs. Winning Colors in 1988, Sunday Silence vs. Easy Goer in 1989.

The event was called the Breeders’ Cup because breeders were underwriting it by paying fees to make their stallions’ offspring eligible; Gaines argued that they ought to give something back to the sport that was making them rich.

The early 1980s were boom times, fueled by the money of Arab sheiks, when the price of horseflesh was being bid up to once-unimaginable levels. The madness reached its peak in 1985, when a yearling was sold at the Keeneland Sales for $13.1 million, even though no thoroughbred in history ever had earned half that amount on the track.

These prices bore no relationship to reality; this was a classic speculative mania. But when the mania inevitably subsided and prices crashed, many breeders were caught in a trap. They had paid astronomical prices for shares in stallions and for mares, and there was no way they could recoup their investment. Some of the country’s most famous breeders were driven into bankruptcy. But as the 1980s drew to a close, a measure of rationality had returned to the economics of racing and breeding.

The cost of stud fees, mares and yearlings has dropped to reasonable levels. At the same time, purse money at the upper echelon of the game has reached a point at which a horse like Sunday Silence can earn more than $4 million in a single year.

“You still couldn’t call horses a great investment,” said Bill Oppenheim, editor of the newsletter Racing Update, “but you certainly have a better shot.”

Moreover, the changed economics of the game encourage owners to keep good horses in competition, instead of whisking them immediately to stud, as was the practice when the decade began.

Pessimists in the thoroughbred business still can find plenty to worry about; competition from other forms of gambling--lotteries, sports betting, dog racing, casinos--has left horse racing with only a 10% share of the gambling market. Because of this competition, many tracks find themselves in financial trouble and some are going to fail.

But the survivors will be strong because of intertrack and off-track betting; purse money will continue to increase, giving further incentive to people who want to breed and race horses. The thoroughbred industry enters the 1990s with a spirit of cautious optimism.