10/28/2010 11:44AM

Light at end of tunnel for New York breeders


It has been a long decade for New York’s Thoroughbred breeders and stallion farms. But when shovels finally break earth for Genting New York’s casino at Aqueduct racetrack, Empire State horsemen say, the Thoroughbred breeding environment will change dramatically for the better.

Thanks to revenue from each of the casino’s video lottery terminals, purses and breeder awards will be boosted.

“New York has been so badly hurt with the New York City OTB bankruptcy and lack of revenues, we’ve been in a pinch financially,” said Jeffrey Cannizzo, executive director of the New York Thoroughbred Breeders. “Once the VLT’s are in place, there’s going to be a lot of revenue to do more. I’m looking forward to next year, when we all have a stake in the revenue that’s going to come out of the VLT’s.”

Already, Cannizzo said, he’s busy with inquiries as potential new breeders and investors try to size up the benefits that an Aqueduct racino, located within 10 miles of more than 5.6 million people, might bring.

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Cannizzo’s pitch is studded with the eye-popping numbers New York horsemen have been longing to see: a rough estimate of $570 million in overall annual revenue from the eventual 4,500 VLT’s, or slot machines, at Aqueduct, of which 6.5 percent will go to purses and 1 percent will go to the state breeding fund. Those percentages rise to 7.5 percent for purses and 1.5 percent to the breeding fund in the slots’ third year of operation.

If those revenue figures hold up, that could mean about $40 million more in purses and an additional $6 million in breeders’ funds in 2011.

Cannizzo is unfazed by the notion that video slots might fare less well in an entrenched recession. “The VLT’s haven’t really taken a hit in the recession if you look at gaming statistics,” he said. Cannizzo added that Genting – which also developed the new and successful Sentosa complex in Singapore – proposes a full-blown tourist destination, not just “slots in a box,” that can help it thrive as a larger, multifaceted entertainment venue.

The Jockey Club’s Reports of Mares Bred statistics released last week show the toll the recession and a long wait for slots have taken on New York’s Thoroughbred breeding. In 2010 alone, according to Jockey Club statistics, New York’s active stallion population declined by 24 percent, and mares bred fell 17 percent. With just 1,207 broodmares reported bred this year, the state could be looking at a 2011 foal crop of fewer than 1,000 horses.

“We’ve bottomed out in 2010 in terms of mares bred, and I think our foal crop size next year will be the smallest it’s ever been,” Cannizzo said. “And I’m 100 percent confident that it will grow into something substantially larger from there. Hopefully, the people that are already in New York and are getting involved in New York want to emphasize quality, improving the broodmare base and the stallion roster we have in the state.”

Cannizzo and others expect both numbers and quality of horses to increase as slots-enriched purses, breeders’ awards, and stallion awards draw in professional horsemen and investors from other areas. One early sign: Frank Stronach’s announcement this month that he would send five of his Adena Springs stallions, including Kentucky sires Tiago and Touch Gold, to New York’s McMahon of Saratoga Thoroughbreds for 2011. Adena Springs’ sales director, Dermot Carty, called the New York breeding program’s projected improvements “a strong motivation” for Adena Spring to relocate the stallions.

Jamie LaMonica, president and co-owner of Empire Stud in Hudson, N.Y., also sees opportunity, nine years after making his first New York Thoroughbred stallion investment in City Zip.

“We thought then that slots might take a couple of years,” LaMonica said. “We did think politically they’d see the importance of the revenue stream and get it done more quickly.”
The intervening years have been frustrating, and LaMonica said he sometimes was tempted to pull out. “We’ve seen a lot of people, strong people, fold,” he said. “But, right or wrong, I’ve got a little Jack Russell in me. I made an investment, and I didn’t believe racing would let New York fail. Ninety percent of the best bloodstock on the planet lives there 10 months of the year. I felt when they got it right, it would be significant. I felt if we could just hold on, we could be one of the top dogs, and we’re doing very well.

“Right now, it’s amazing. Now I know what the pretty girl feels like right before prom. New York is going to see an influx of mares and stallions of significant quality. A $50,000 mare in Kentucky is a valuable commodity in New York, where she might be a liability in Kentucky. Now people can take that mare to New York and make her an asset. And the stallion market is so tough in Kentucky. In New York, on top of stud fees they’ll be getting 7.5 percent stallion awards and the opportunity to breed 100 mares.”

LaMonica is fielding calls from mare owners and stallion owners, and he also hopes to capitalize on the newfound enthusiasm and revenue by launching a racing partnership.
Cannizzo of New York Thoroughbred Breeders says he doesn’t expect New York-breds’ sale prices to increase overnight. But there already have been some slight positive trends that Cannizzo’s organization has trumpeted, including a number of six-figure New York-bred yearlings at the Keeneland September and Fasig-Tipton Eastern fall auctions.

“In theory, the smaller number of foals racing for higher-value purses makes them more valuable on the track,” Cannizzo said. “I’d like to believe those foals on the ground that actually make it to the racetrack and are running are going to be more valuable immediately than in the past.

“But the commercial marketplace is structured now so that wherever the horse was bred, you’ve got to have the right horse. It’s not just based on where it’s bred, but on hitting all the marks of what’s commercially viable. But in terms of the enhancements to the New York breeding and racing program, it’s going to be something that happens over time. I would imagine throughout next year’s sales you’ll see somewhat of a premium placed on New York-breds.

“I think the biggest change is that the money is going to be on the table here in New York, and the opportunity to race your foals here is going to vastly improve with that.”