Updated on 09/16/2011 7:47AM

Handle's growth rate slows


NEW YORK - Parimutuel wagering on U.S. Thoroughbred races increased 1.6 percent in 2001, well short of the 6.4 percent annualized returns the industry has grown accustomed to in the simulcast era, according to figures compiled by The Jockey Club.

Although flat, handle was still a record, climbing to $14.55 billion last year from $14.32 billion in 2000, The Jockey Club said Tuesday as part of the release of its annual Fact Book. Handle has increased every year in the U.S. since 1993, sometimes by as much as 11.5 percent; overall, handle has increased 51.5 percent in that same time period, easily outpacing inflation.

Purses, which have closely followed the handle surge, also went up in 2001 by 3.6 percent, to a record $1.07 billion. Like handle, the rate of purse growth was well below the annualized rate of 6.8 percent since 1993.

A number of other trends in racing persisted in 2001, according to The Jockey Club's data. Average starts per horse and total number of races continued their decades-long slide. Average field size, a figure that has hovered near 8.20 over the past five years, increased slightly compared to 2000.

The purse growth was somewhat deceptive. Nearly all the purse gains came from New Jersey racetracks, which received state-legislated purse subsidies, or from West Virginia racetracks whose purse accounts were inflated by new video gambling-machine revenues, according to Jockey Club spokesman John Cooney.

Although some racetracks in Louisiana expect large revenue gains from new machines in 2002, betting at many racetracks on slot machines has stagnated or declined in the past several years, including at Prairie Meadows in Iowa. On the flip side, purse accounts at New York racetracks may begin to benefit from video gambling machine revenues as soon as November.

A number of factors contributed to the decline in the growth rate of handle, including fallout from the Sept. 11 attacks and the economic impact of the recession, which is now in its eighth month. Ken Kirchner, the director of simulcasting for Breeders' Cup, said on Tuesday that the recession and canceled dates caused by the terrorist attacks could easily account for "2 to 3 percent" of annual growth. In 2000, handle rose 4.4 percent.

Many industry officials have also been predicting stagnant growth for handle because simulcasting has gained a firm hold in nearly every market. As a result, the typical racing gambler has a way to bet on nearly all the product he can afford to play.

Future growth areas for handle could include account wagering, which is being aggressively marketed by a number of companies in 2002. That growth can only occur if account handle does not cannibalize existing ontrack or offtrack handle. Familiarity with account wagering could also lead to more racetrack bettors taking their accounts offshore, where many heavy gamblers receive sizable rebates on their wagers, sometimes as much as 10 percent of handle.

While financial indicators rose, the general sturdiness of the Thoroughbred - as reflected in number of starts per year - continued to fall. For the first time, the average starts per horse per year fell below seven, to 6.97. The average has declined by a full start in the last 10 years; it has declined by four starts since 1950, when the figure was 10.91. Despite the decrease in starts, average field size increased slightly to 8.18. In 2000, field size was 8.11. Average field size has stabilized in the past five years, as racing secretaries and track management focus on the statistic to gain simulcasting market share.

Year Purses* Avg. Field Size Avg. Starts Races Handle* %change in handle

2001 1,067.5 8.18 6.97 60,738 14,550 +1.6

2000 1,030.0 8.11 7.10 60,872 14,321 +4.4

1999 962.9 8.21 7.19 60,182 13,724 +4.7

1998 904.0 8.17 7.29 61,293 13,115 +4.6

1997 851.5 8.20 7.54 63,487 12,542 +7.9

1996 792.7 8.31 7.59 64,388 11,627 +11.5

1995 761.6 8.20 7.73 68,245 10,429 +5.4

1994 718.4 8.31 7.84 70,669 9,897 +3.1

1993 692.1 8.56 7.86 72,342 9,600 -0.4

1992 709.6 8.62 8.03 77,712 9,639 +2.6

*in millions