01/12/2007 12:00AM

Gambling revenue not the only source for purses

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NEW YORK - Congratulations over the record $135 million wagered nationwide on the 2006 Breeders' Cup had hardly died down when Racing Victoria announced that its Victoria Derby Day card at Flemington Racecourse in Australia, held like the Breeders' Cup on Nov. 4, had generated $34 million in total nationwide handle.

Like Churchill Downs's Breeders' Cup card, the Victoria Derby card was an all-stakes affair. There were nine contests at the Australian track, all group races, and 10 on the Breeders' Cup card. The difference between the handle at the two tracks, however, is not the apparent $101 million figure, but that Australia is a nation of just 18.5 million inhabitants, whereas the United States has a population of 300 million. That means that the Aussies were betting on the Flemington card to the tune of $1.83 per person, while Americans were chancing just 45 cents each at Churchill Downs.

The difference between national per-capita handle is even greater when compared to Japan. On Dec. 24, the day that Deep Impact won the Arima Kinen at Nakayama, 54 billion yen, or $459 million, was wagered nationwide on the 10-race card. That comes to an astounding average of $3.67 for each of Japan's 125 million residents. Merry Christmas, Japan Racing Association.

Look at it this way. If Americans bet on big race days the way the Japanese did at Nakayama on Arima Kinen Day, Breeders' Cup handle would have totaled $1.1 billion. Even if we bet like the Australians on Victoria Derby Day, Breeders' Cup handle would have reached $549 million.

Either total would have been enough to fund not three, but six new Breeders' Cup races at $1 million each while doubling the value of the eight other Cup races. The point is that the potential for growth in American racing is phenomenal. We are the richest nation in the world. Our economy has been booming for all but two of the last 15 years. Yet, outside of the Breeders' Cup, purses have been largely static for nearly a decade.

Breeders' Cup Ltd. is to be congratulated for the creative manner by which it funds races. Theirs is a perfect example that racing does not necessarily live by the fruits of wagering alone. A large portion of Breeders' Cup purses comes from fees paid by breeders to get their foals into the Breeders' Cup program as well as from corporate sponsorship.

But even with the Breeders' Cup as a prime example, American racing has continued to rely almost exclusively on parimutuel wagering as its source of prize money. In this respect we operate along the same lines as the two countries with the highest purse structures, Japan, where maidens go for $82,000, and Hong Kong, where even the cheapest handicaps are worth $73,000. Their parimutuel systems, however, are highly efficient machines that cater fully to the needs of a populace nurtured by racing administrations that market their sport properly, unlike these United States, where the game is on the brink of leaving the public consciousness.

Examples abound round the world of countries that fund racing from sources other than wagering.

In Britain and Ireland, where the racing and betting industries have always been separate, races are funded with the help of corporate sponsorship, owners' entry fees, the European Breeders Fund, and a levy on off-course bookmakers that falls far short of the takeout that tracks receive under the parimutuel system. Irish purses are aided by a healthy cut from a government friendly to racing's needs. In Britain, prize money is propped up by exorbitant, one might say extortionist, admission fees that can reach $100 on select days.

New Zealand's new $1.4 million Kelt Capital Stakes, set for Oct. 7 at Hastings, will be funded without a single penny generated by either betting handle or admission fees, the entire package to be funded by corporate incentives of the race sponsor, Kelt Capital, and the Hawkes Bay Racing Club, one of the entities that conducts race meetings at Hastings.

Dubai, where betting is illegal, is another, albeit exceptional, case, employing as it does the "Sport of Kings" method developed in England centuries ago. The $31 million on offer at Nad Al Sheba's 11-card Dubai International Racing Carnival beginning on Thursday, a meeting that includes Dubai World Cup night, is funded almost entirely through the largesse of Dubai's ruling Maktoum family with help from corporate sponsors and international simulcasting.

Lacking the efficiency of Japan or Hong Kong's parimutuel systems, and given the waning influence of the American bettor, it is time for the American racing industry to seek new means of funding itself.