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Average purse increases but with fewer runners
By Mark Simon
A diminishing pool of runners is a double-edged sword for those involved in racing. Racetracks need runners – lots of them – to fill daily cards and generate the handle needed to be successful. From the standpoint of a racehorse owner, however, fewer runners means less competition and a greater chance to win purse money.
In 2013, racetracks struggled to fill races as the number of starters continued its long, steady decline, while owners reaped the benefits through higher average earnings per runner as total purses year over year remained stable. That, in effect, was the story of 2013 when it comes to purses, the lifeblood of the sport.
For racehorse owners, 2013 was the best year ever in terms of average earnings per runner, the mean of $20,366 up 5.5 percent over 2012 as a result of a large decline in runners coupled with steady total purses.
In 2013, a total of $1.183 billion in purses was distributed in the United States and Canada (including 160 steeplechase and hurdle races) in a total of 46,810 races. Total handle in 2013 was down slightly from the $1.194 billion in 2012, but a steep 5.2 percent decline in the number of races resulted in the average purse in North America climbing to a record $25,293.
Total purses, an amalgam of takeout and purse enhancements from alternative gaming and incentive awards from states, has stayed well above $1 billion despite total handle declining from more than $15 billion early in the 2000s to $11.4 billion in 2013, due in large part to more than $300 million a year – and counting – going to purses from alternative gaming, such as the gaming deal in New York State.
The increase in average earnings per runner was created because fewer starters were running for larger average purses.
The 46,810 races held in 2013 was the fewest in North America since 1963. To put that in perspective, the number of races in North America generally increased every year from 1932 to 1987, declining just 10 times in that period. Total races peaked at 82,705 in 1989, in conjunction with the foal crop peaking in 1986 at 51,296. The Jockey Club estimates that the foal crop in North America in 2013 will be 23,000.
The foal crop is expected to stop its sharp decline in the coming years, and perhaps even tick upward, but that will not do much for the general horse supply at racetracks in North America. The lower number of horses starting today will be the norm for the immediate future.
That can be good news for racehorse owners, who struggle to turn a profit under the best of circumstances, and the consolidation of stable total purses being distributed in fewer races has been a tonic for growing horses’ earnings.
Still, making money with a racehorse is one of the toughest enterprises around, and the rule of thumb that nine out of every 10 owners lose money may be fairly accurate. As seen in Table 1, just 2.6 percent of all runners in 2013 earned $100,000 or more, and another 6.7 percent earned $50,000 to $99,999.
Not all horses are in major markets, but if it costs $100 a day to keep a horse in training at a major track, plus veterinary bills, shipping, and other expenses, it takes at least $50,000 in purses to break even, and that does not include the cost of the horse, whether bought at auction or raised by the owner. Just 5,409 runners, 9.3 percent of the total, earned $50,000 or more in 2013.
A total of 203 runners earned $300,000 or more in 2013, with 0.3 percent of all runners taking home 10.2 percent of total purses.
At the other end of the earnings spectrum, more than half of all runners, 53.2 percent, earned less than $10,000 in 2013. A total of 12,005 runners earned less than $1,000 each.
Those numbers help explain why the median earnings – the amount at which half of all runners earned more and half less – was $8,711. The median rose 7.8 percent, but no one makes money with median earnings.
Stakes winners better than average
Owning a Saturday horse, especially one who competes in stakes, is a goal of most owners. And the data in Table 2 explain why there is a lot of reward in owning a stakes horse aside from the trophy: Stakes winners earn a whole lot more on average.
In 2013, there were 1,585 stakes winners (stakes winners are horses who won an added-money or recognized stakes event, regardless of value). That segment represented 2.7 percent of all runners last year, and they won 22.9 percent of all purse money.
Table 2 illustrates that the best way to profitability is to campaign a stakes winner. In 2013, there were 896 stakes winners who earned $100,000 or more. Those 896 horses earned total purses of $232.6 million, or 19.6 percent of total purses for the year.
Data in Table 1 and Table 2 show that just 10 runners earned $300,000 or more in 2013 without winning a stakes, as 203 horses earned $300,000 or more, and there were 193 stakes winners who earned $300,000 or more.
But stakes winners were far from equal, as 128 stakes winners earned less than $25,000 each.
That the best opportunities for earnings are in stakes is reinforced by the data in Table 3, which shows distribution of purses by class of race. Table 3 indicates that stakes races accounted for just 4.6 percent of all races but distributed 24.2 percent of all purses. The 2,158 stakes races offered an average purse of $133,023, which was 426 percent greater than the average purse of $25,293. Generally speaking, racing has long distributed about 25 percent of all purse money through stakes races.
So, besides stakes, where are the best opportunities? Maiden races and allowance races offer some of the best purses. The category of “All Others” in Table 3 is largely made up of optional-claiming races, which accounted for 9 percent of all races and offered an average purse of $35,988. Straight maiden races offered an average purse of $35,299, and allowance races offered an average purse of $31,899.
As most bettors can attest, claiming races are the main staple of fare, particularly on weekdays. Claiming races – when including maiden-claiming races – comprised 65.2 percent of all races in 2013, and they offered below-average purses. The 30,501 claiming races featured an average purse of $13,885, which was 45.1 percent lower than the overall average purse. Maiden-claiming races accounted for 17.7 percent of all races and distributed 10.7 percent of the purses.
Go long, young man
Table 4 presents distribution of purses by distance of race and explains why it is far more rewarding to have a horse who can successfully negotiate a route of ground than one who can only sprint. Races at less than a mile offered an average purse of $21,092, while races at more than a mile offered an average purse of almost twice that, $41,405.
Races at a flat mile were the tipping point, as the average purse of $24,984 for the 8,042 races at that distance was close to the overall average of $25,293.
Unfortunately for owners, there are not nearly as many opportunities to run long as short. The 8,073 races at more than a mile was just 17.3 percent of all races (the data exclude 160 steeplechase and hurdle races).
Sprints dominate everyday cards, and 65.5 percent of all races were at less than a mile.
The most common distance of races in North America is six furlongs, with 25.9 percent of all races run at that distance, and those 12,074 races distributed 22.8 percent of the purses.
The highest average purse, $267,537, was offered at the North American classic distance of 1 1/4 miles, though just 95 races, 0.2 percent of the total, were held at 10 furlongs. The Breeders’ Cup Classic, worth $4.6 million, distributed 18.1 percent of the $25,416,027 awarded in 1 1/4-mile races.
Opportunity historically has been better for males than females, and that was again the case in 2013, though the earnings differences between the sexes were not great.
As shown in Table 5, purses for races restricted to females were almost always lower on average per age group than those for only males or for both sexes, though when races are written for either sex, it means the fillies are running against males. In the high-profile 3-year-old division, races restricted to fillies offered an average purse of $41,209, while open races offered an average purse 21.8 percent higher, $50,200.
Overall, the average purse in 2013 for females was $24,977, compared with $25,307 for either sex.
As shown in Table 6, this purse disparity shows up in earnings, with fillies and mares earning an average of $19,391 and males earning 9.2 percent more at $21,184. While females accounted for 45.6 percent of all runners, they earned 43.4 percent of all purses.
Three-year-olds earned more on average than any other age group, followed by 4-year-olds. Three-year-olds enjoyed the highest aggregate purse distribution, nearly $395 million, or 33.4 percent of the total, and accounted for 27.6 percent of the runners.
Two-year-olds generally ran for lower purses, as juveniles comprised 14 percent of all runners but won 11.1 percent of all purses.
Winning is everything
Racing is a game where winners are rewarded at a far greater percentage than those who do not win. This is done to ensure the integrity of the wager. The importance of having a horse who can win a race is illustrated in Table 7.
If a horse is unable to win, he earns relatively nothing. In fact, in 2013, 51.4 percent of all starters failed to win a race. The importance of winning is reflected by the meager $4,836 average earnings per runner for nonwinners.
Conversely, a horse who was able to win just one race earned on average $23,678. And earnings escalated dramatically with each win. Runners able to win two races earned an average of $43,611, three an average of $61,456, and five races an average of $112,906.
One horse was able to win 10 races in 2013, and two runners won nine each.
The distribution of purses is outlined in Table 8. At the top end of the scale, there were 1,002 races in North America in 2013 that offered a six-figure purse. Those 2.1 percent of all races distributed 19 percent of all purse money, again emphasizing to owners the importance of getting a top runner – the ones who can compete in stakes races.
At the other end of the purse spectrum, there were 12,444 races that offered purses less than $10,000, and those 26.6 percent of the total races distributed just 7.4 percent of the purses.
Most wonderful time of year?
Table 9 provides a look at the racing calendar by month. The peak month for racing is August, which has the most races and the most purses. The highest average purse is distributed in November, but that figure is skewed by several rich racing days and weekends, notably the Breeders’ Cup early in the month and big stakes weekends in New York, Kentucky, and California around Thanksgiving.
Just 11 percent of all races are held in January and February.
Two-year-old races are nonexistent today in the first two months of the year, a far cry from the olden days, such as when Seabiscuit started twice in January of his juvenile year and once in February while making 35 starts as a 2-year-old.
After very few races for juveniles through May, the activity picks up through the summer and into the fall, with the highest aggregate purse distribution for the age being in November, when the rich Breeders’ Cup races are held.
The average purse for juveniles is much higher than the average purse for all ages, but as shown in Table 5, juvenile races comprise only 6.6 percent of the annual purse total, so opportunities are not abundant for the age group.
First off, "thoroughbred racing"....everytime I read this nonsense I start to laugh. We do not breed "thoroughbreds" anymore, these are nothing more than extended sprinters. Racing? really? not even close....this is nothing more than a breeding industry breeding extended sprinters..... Problem in takeouts, drugs, lack of popularity, etc etc is the result of what we breed today.
The earnings distribution sounds eererly like the American wealth distribution.
I have a novel idea.....let's cut back the number of racing days to 2 or 3 days a week at all tracks and schedule the races on Friday, Saturday and Sunday.....you know, kind of like they do in Europe, where they typically have 15 or 20 horses in a race? On track attendance would increase, field size would increase, operating expenses for racetracks would DECREASE since they wouldn't have to operate 5 to 7 days a week and the whole industry would be better off. If that doesn't increase the number of starters then the industry is a lost cause!
The takeout rises as the attendance falls. How else are all the employees at the tracks are going to get paid and the utilities paid? The backbone of horse racing is the two dollar bettor and many of them dont have two dollars left after ther get through the gate.
once these ultra-bankrupt state governments pull the plug on the slots subsidies, 90% of the tracks will shut down.
Take ANY product or ANY Business,have POOR ( out of touch) Management,and the product and Business suffer.The vast MAJORITY in race-track management simply DON'T UNDERSTAND THEIR CUSTOMERS. it's that simple.....
thank you, mr simon. interesting stats. the peak number of starts in 1989, was when lasix was being introduced. this is when racing jumped the shark.
I have said for many years that slots does nothing for horse racing. Giving big purses to slow horses does nothing. Having super purses on one day does nothing for the everyday horsemen either. It's lower takeout that will help this sport. Horse racing is fueled by the betting dollar, and the betting dollars will increase with a lower takeout. If tracks are too greedy to see this, then count your remaining days and RIP in the near future.
The fields are small in the non stet bred stakes races at tracks with casino, slot or as Evangeline Downs is, a racino. The money raised through slots or in the case of Oaklawn Park, video racing, goes mostly towards star bred purses. Some of it goes into the general purse fund with bulk towards state bred. You see it in Louisiana often where you have 5K, 7.5K and other claimers with purses close to double the claiming price and mdn special weight races with purses at or above 50k often. Louisiana also gets money from video poker in truck stops and the casinos now have race books with money going into the racing fund. Small fields will continue to be the norm at California tracks as the cost of ownership is much greater. California was the first state and may still be the only to require horsemen to pay workers comp. They also have a higher tax base on earnings from horses to owners and I think they are also required to give employees insurance.
"That, in effect, was the story of 2013 when it comes to purses, the lifeblood of the sport." Bettors are the lifeblood of the sport... Or should I say "were" the lifeblood of the sport until slots came along.
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