Simulcasting Hits Home in Kentucky

Horseplayers who wager on simulcasts know that thoroughbred racing suffers from one overriding problem: Its basic product is weak. From coast to coast, tracks regularly present small fields and uncompetitive races with a minimum of betting interest.

The shortage of horses affects tracks of every size. Not only do Laurel and Pimlico struggle to put on respectable cards, but even powerhouses such as Santa Anita and Gulfstream Park have disappointed their customers.

Thus do fans look with wonderment at the telecasts emanating from Kentucky. Keeneland’s 16-day spring season, which began Friday, is arguably the classiest race meeting in the country. Churchill Downs will follow with a two-month meet, highlighted by the Kentucky Derby but most remarkable for the number of wide-open 12-horse fields on its programs.

Only a decade ago, Kentucky was considered a mid-level racing circuit, roughly on a par with Maryland. Even though the state is the center of the American horse-breeding industry, and the sport has a broad popular appeal as a result, the tracks there weren’t exceptionally prosperous.

Louisville and Lexington weren’t large enough to generate business that would put Kentucky racing in the same league with New York and California.

But full-card simulcasting has revolutionized the industry by giving every track a potential national audience and making its own geography less important. The Kentucky tracks have exploited the potential of simulcasting more effectively than anybody else.

The principal Kentucky tracks -- Keeneland, Churchill Downs and Turfway Park -- have finite seasons. During the months when they do not conduct live racing, they offer extensive full-card simulcasting from inside and outside the state. Part of the revenue from simulcasting is stockpiled for purse money when live racing resumes. This allows the track to offer healthy purses, which attract more horses and better fields. The quality of the racing gives Kentucky a desirable product in the simulcast marketplace, generating more betting and more revenue.

Keeneland has epitomized Kentucky’s transformation. The pretty track in Lexington used to be best known for its resistance to change: no exactas, no trifectas, no track announcer.

But now it has embraced simulcasting enthusiastically, and it generates some $200,000 a day in betting when there is no live racing. Every available penny of revenue is then plowed back into purses. Keeneland can do this because racing is only a sidelight to its principal business of conducting the nation’s richest and most prestigious horse auctions.

“The best way to promote our sales company is through our racing,” said the track’s media-relations director, Jim Williams. “And the way to promote our racing is through purses.”

The purse money at Keeneland has been the talk of the racing industry this spring. One program includes a pair of maiden races worth $35,000 each; three allowances worth $39,000, $50,000 and $52,000, plus a $100,000 stakes.

While bottom-level allowance horses at Keeneland compete for a $39,000 purse, horses of comparable class at Pimlico race for $17,500. At Aqueduct they run for $33,000. Moreover, the economics of racing in Kentucky are even more attractive than these figures suggest, because training costs are lower there than in most other major racing centers.

The response to these financial incentives has been predictable. Kentucky has lured many of the country’s top stables: trainers Wayne Lukas and Bill Mott have substantial operations there. New York-based riders Jerry Bailey, Mike Smith and Julie Krone all have skipped Aqueduct to compete at Keeneland. And the response from bettors has been enthusiastic, too. Wagering on Friday’s nine-race card totaled $4.79 million, with more than $3 million coming from out of state.

Even though there is nothing secret or magical about the formula of using simulcast revenues to stockpile money for purses, no other state has been able to duplicate Kentucky’s success. Out-of-state simulcasts still are not legal in California and Florida. Year-round racing operations, such as those in New York and Maryland, must spread their available purse money too thinly over too many races.

But racetracks can’t continue with business as usual and hope to prosper in the simulcasting era. They need to run fewer races with larger purses.

In Maryland, the purse issue is becoming even more critical, as Delaware Park -- with the aid of revenue from slot machines -- threatens to lure horses from Pimlico.

But even in the tough economic climate of modern racing, Kentucky’s example has shown that a track can remake itself and prosper if it offers a good enough product.