Horse racing is on the skids.
Greater choice among gambling venues, increased popularity of other sports and a decline in the number of horses bred for racing have created a trifecta for declining attendance and profits.
Though overall betting is up, 85 percent of revenues at racetracks nationwide are generated off site. The result is an often lackluster atmosphere at the track and a decline in overall profits.
“Increased competition from other forms of gaming and entertainment is the most important single factor in the decline in attendance at race tracks throughout the United States,” said Mike Martin, spokesman for the California Horse Racing Board, the state’s regulatory authority. “At the same time, you have a declining number of horses racing. As any bettor will tell you, the smaller the field, the less attractive the race is for wagering.”
Hollywood Park is a good example.
Off-site gambling was the major reason why the Inglewood track’s pari-mutuel betting revenues jumped to an average of $10.4 million per day in 2004, up from $6.9 million in 1991. But the park must share the revenue with the entity that generated it, and it also loses out on ancillary sales such as hot dogs and beer that come with live attendance.
As a result, Hollywood Park’s earnings before interest, taxes, depreciation and amortization dropped to $7.3 million last year, from $18.9 million in 2000, according to Securities and Exchange Commission filings by Louisville, Ky.-based Churchill Downs Inc., which owns the facility.
A three-decade peak for on-site betting at thoroughbred races came to a close in 1991, when state legislation opened the door for Southern California venues Hollywood Park, Santa Anita Park, Los Alamitos Race Course and Fairplex Park in Pomona to take bets for each other’s races.
Statewide, racetrack attendance fell to 3.8 million in 2004 from 7.6 million in 1991, according to the California Horse Racing Board. Even including customers who bet at off-track venues, attendance fell to 8.9 million statewide from 13.8 million in 1991.
Hollywood Park, which hosts 95 racing days per year in spring, summer and autumn meets, is now open year-round to attract local customers making bets at other tracks using simulcast TV screens. Still, annual attendance on race days fell below 550,000 last year, compared with 1.4 million in 1991.
“Inter-track betting really hurts because it takes people away from the live product, which diminishes the excitement,” said Mike Mooney, a spokesman for Hollywood Park. “It’s not a positive sign to have a grandstand half empty.”
The spread of legalized gambling on Indian reservations and elsewhere as well as new technology have also siphoned off attendance.
Off-site betting parlors are open in San Bernardino, Lancaster, El Cajon, Ventura, Victorville and two in Indio. Online gambling outlets such as Woodland Hills-based Youbet.com and L.A.-based Television Games Network allow gamblers to bet at home as well.
“California is a very competitive gambling market,” said Julie Koenig Loignon, a spokeswoman for Churchill Downs. “That’s definitely a challenge for those of us in the parimutuel gaming industry.
