08/23/2010 3:12PM

Racing officials stress the positive at Round Table Conference


SARATOGA SPRINGS, N.Y. – When officials from four racetracks wrapped up their presentations on Sunday at the Jockey Club’s annual Round Table Conference, it may have seemed that the racing industry was in fine fettle. Aside from a few oblique references to the unprecedented slides in handle and auction receipts that have struck the racing industry over the past few years, the executives generally painted a rosy picture about the future of a sport whose economic foundation appears to be crumbling.

Stephen Duncker, the chairman of the New York Racing Association, pointed to the expected arrival of slot machines next year at the association’s Aqueduct racetrack when he said that he has “never been more optimistic than I am right now.” Nick Eaves, the chief executive of Woodbine, closed his presentation with an animation about a proposed high-end retail development at the Canadian track. And Dennis Robinson, the chief executive of the New Jersey Sports and Exposition Authority, gushed over the gaudy increases in handle and attendance at Monmouth Park this year.

Although it appeared as if the speakers were willfully ignoring the collapse of the industry’s core economic indicators and the regional stresses on their circuits, the optimism underlying their remarks arose from several factors. The first is that the only valid response to an economic transition like the one currently upsetting racing is to search for the silver linings that typically form the building blocks on which imperiled industries rebuild. Any other focus leads to more failures.

The second factor merely reflected the structure of the organizations the speakers represented. The four racetrack officials that spoke on Sunday work for non-profit or not-for-profit organizations, or, in the case of the NJSEA, a state agency that has no specific profit motive. As a result, all four represent organizations that operate under a mandate to promote horse racing, not to maximize profits, giving them the ability to disregard anti-racing strategies that executives of publicly traded companies cannot ignore if they want to remain employed and well-compensated. If the Round Table lineup had included representatives of Churchill Downs Inc. or MI Developments Inc., the tone of the remarks would have almost certainly been much different.

Of all the speakers, the reason for Duncker’s optimism was most obvious. It now appears almost certain that a casino will open at Aqueduct racetrack in Queens by late next spring, nine problematic years after the devices were first legalized at the track. The casino is expected to generate at least $65 million annually in subsidies to NYRA and its horsemen, Duncker said, an amount that will keep NYRA’s purses well above those of racetrack-casinos in neighboring states and lift the association out of a stubborn financial hole.

The positive theme of Robinson’s presentation – that racing can resurrect its fortunes if its constituents work together – was also understandable considering the context in which Robinson was delivering it. Monmouth’s handle and attendance figures have soared this year during an experimental 50-day meet that required horsemen to accept the loss of approximately half of the state’s live racing days, but the meet also would not have been possible without a $17 million subsidy from Atlantic City casinos and the willingness of the state to absorb millions of dollars in potential losses.

Robinson now needs to demonstrate to the state’s legislators that racing is worth saving – and worth subsidizing – so his presentation focused on the cooperative strategies employed by the industry to get its way this year, even if that meant ignoring the fact that the track would be hemorrhaging tens of millions of dollars this year without the subsidy. That’s not ignoring the obvious; that’s just good politics.

Perhaps the most incongruous presentation came from Nick Nicholson, the president of Keeneland Association. In addition to two three-week race meets each year that are among the most popular in the country, Keeneland runs the largest auction house in the world, and the collapse of the bloodstock market has hit the association especially hard over the past two years. But instead of focusing on what the association needs to do to remain financially viable in a post-bubble world, Nicholson used his allotted time to discuss how Keeneland has attempted to stay at the leading edge of technology and entertainment so that the track can ensure that its ontrack and offtrack patrons enjoy the same amenities as other, more popular sports.

But Nicholson’s presentation also contained a subtle point. In multiple images from videos accompanying the speech, crowds surged on Keeneland’s apron and around the track’s walking ring and paddock. Keeneland must be doing something right, Nicholson appeared to be saying, because how else would such a small track routinely jam 30,000 people into its grandstand, and continually score so well on polls measuring customer satisfaction?

In fact, the sport appears, at least on the surface, to be thriving in other spots. Del Mar in Southern California drew 45,000 patrons on its opening-day this year, and though attendance is down at Saratoga, it’s still impossible to ignore the hustle and bustle of its grandstand on any sun-splashed afternoon. All three tracks are non-profits and receive no subsidies from slot machines, yet they still offer some of the highest daily purses in the country, as Duncker has pointed out for years. That seems to offer some hope for the racing industry, but it’s a hope that increasingly looks tied to non-profits.

“Let’s not downplay our problems,” Nicholson said at one point, “but at the same time let us not lose sight of what is great about our sport.”