COMMENTARY / HORSE RACING : California’s Money Still Can’t Stem the Shortage of Horses Tide

When Maryland’s fall racing season begins at Pimlico this week, fans, horsemen and management will be looking ahead to lean times, and they may gaze wistfully at the seemingly robust condition of California racing.

Maryland is being hurt by a dwindling horse population. This shortage may force a reduction in the state’s racing schedule and it already has produced plans to close the Pimlico stable area this winter--causing a bitter clash between management and horsemen. The horse shortage also alienates fans, who tire of noncompetitive fields and small payoffs.

Such problems plague almost all the racing states in the East. Head-on competition between tracks in Pennsylvania and New Jersey has led to small fields and, frequently, dismal-quality racing. West Virginia, Massachusetts and New Hampshire have been afflicted by similar woes.

Among farsighted people in the East, there is a consensus about the cause and the solution for the industry’s problems. Of course, tracks have too many racing dates for too few horses, and they must reduce the number of races. But the shortage of horses is really a shortage of owners and trainers.

Buying a racehorse is a lousy financial proposition--with high expenses, high risks and few tax breaks--and purse money is not nearly good enough to compensate. More than 90% of owners lose money. The sport needs to develop intertrack and off-track betting to generate more wagering, which in turn will produce more money for purses. And realistically those high purses will ultimately yield more owners, more horses and better racing.

Welcome to California, where the racing industry already has thought of these things. Because of the state’s geography, it doesn’t have neighbors erecting tracks on its border and causing the oversaturation of racing that prevails in the Northeast. California has a formidable intertrack betting network that stretches the length of the state and generates levels of wagering that once would have been unimaginable. An average of $7.4 million per day is bet on races at Del Mar, of which $5 million comes from off-track sites. As a result, this track can offer purses that would be the envy of horsemen and track managements anywhere in the country.

On one recent typical day, Del Mar’s card included a maiden race for fillies and mares with a purse of $28,000. The cheapest maiden 2 year olds on the grounds competed for $17,000. A bottom-level allowance race--for fillies that had never won more than one race--was worth $35,000. These are sums that would be worthy of stakes races in many parts of the world. And according to everybody’s economic notions, large numbers of horses should have been thronging to compete for these pots.

But that $28,000 maiden race attracted eight runners. The maiden 2-year-old race drew a field of eight as well. The low-grade $35,000 allowance drew a pitiful, noncompetitive field of six--an even-money favorite, a 6-5 shot and four bums. And this has been typical of California racing for months. Hollywood Park was plagued by five- and six-horse fields throughout its summer meeting. Despite the high class of the horses, the superb jockey colony, the wonderful ambience of Del Mar, bettors here have frequently been bored by the day-to-day quality of the racing.

Why aren’t these huge purses attracting more horses? Racing secretary Tom Knust, who frequently has to struggle to fill the races here, blames a variety of factors. The quality of the competition here is so high that it discourages outsiders from shipping in; marginal horses leave Southern California in great numbers--mostly bound for the San Francisco tracks--but few come in. However, the main problems here are financial. California has been so hard-hit by general economic decline that plenty of owners can no longer afford the luxury of horse ownership.

Knust said: “You might have owners who in the past would have a dozen horses, and now they have one or two--or none at all. This is not a good place to invest your money if you want to make money.”

And the healthy purses are really not as healthy as they look. Bill Oppenheim, editor of the newsletter Racing Update, visited here recently and observed, “It’s almost beside the point that California has purses much better than tracks in the East or in England. You still don’t have a realistic chance to make money if you’re in the horse business. Now if those maiden races had $60,000 purses, then you might see a difference.”

This analysis is all too accurate, and that is the reason I will leave Del Mar feeling very pessimistic about the state of the racing industry. People in Maryland may feel hopeful about the eventual impact of a statewide off-track betting network, but even if purses are improved and maidens are running one day for $20,000, for $25,000, for $30,000, will it really make a difference?

If California’s purse structure is so inadequate that owners are still fleeing the game, how can states such as Maryland ever have a realistic chance to make the game economically viable?