And as the recently-released report details, there are a lot of areas that surely need to be reviewed by lawmakers – and in many cases likely need to be improved.
New York is an iconic horse racing state, along with California and Kentucky, with roots dating back to the 17th century on Long Island. Goshen Historic Track, Saratoga Race Course, Yonkers Raceway, Aqueduct Racetrack, and Belmont Park all debuted more than 100 years ago – with seven harness racing tracks and four for thoroughbreds still in operation. The estimated annual economic impact is estimated at $3 billion.
The study shows that New York has struggled to keep up its place on the national stage, with overall handle at New York racetracks declining 3.2% from 2011 to 2018 while the national total handle for both breeds has increased by 4.9%. This has resulted in New York’s share of the national handle dropping from 13% to 10.5%.
The state’s harness racing industry has been the harder hit of the breeds, with a 20% drop in race dates over the past decade. Yet New York still offers nearly one-quarter of all the harness races run annually in the U.S. – meaning that sector’s future remains very much entwined with New York’s fate.
Revamping NY OTBs – and reviving them in NYC
“Spectrum Gaming believes the best alternatives for the state, counties and racing industry would be either re-structuring to permit race tracks to manage OTBs [off-track betting sites], or to consolidate operations under one OTB with the best performance and the ability to focus on pari-mutuel operations statewide.
Both alternatives keep as much handle in the state as possible while making more efficient operations and minimizing any handle, tax, and municipality revenue loss.
“The December 2010 closure of OTB facilities in New York City resulted in a 30% decline in wagering business in the city. Some of the handle was recaptured with the convenience of ADWs [advance deposit wagering that allows betting online], but the cash wagers and casual social or leisure wagers made at typical OTBs were never absorbed by other options, which represents lost revenue for the State and the horse industry.
“Spectrum believes the estimate of the opportunity of $130 million in handle is very conservative, based on the examination of the amount of New York City OTB handle that most likely has already been recaptured.”
The New York Racing Association – which operates the Saratoga, Belmont, and Aqueduct thoroughbred racetracks – is seen by Spectrum as a logical manager of revived New York City OTBs.
As for the five existing OTBs – two on Long Island and three upstate – the recommendation is to consolidate those into a single, cohesive operation.
Too many racing dates?
Also up for review is the total number of racing dates in New York, which ranged in 2020 from 58 at Tioga Downs to 237 at Yonkers Raceway.
“Having fewer races with short fields should be a goal when assessing the impact on the purses and breeders’ awards,” the report points out. “Based on the average handle, it is clear that wagering patrons have a stronger preference for races with more betting interests.
“Unfortunately, horsemen have an economic interest in races with fewer betting interests because they are less competitive, increasing the horsemen’s opportunity to win purse money.
“The horse owners would be better off with fewer months of racing; they could race for higher purse averages (but essentially the same net purse structure) and they could turn the horse out for a couple of months of rest and save expenses, as it costs less per month to keep the horse out of training.”
That said, determining where to cut back is no simple task:
“The Aqueduct winter meet is the most logical place to cut days and have the least negative impact – but that meet has the largest percentage of New York-bred runners and races for New York-bred horses. Thus, as further reduction is incrementally made to the winter days/races, there should be an effort to move those New York-bred races to another time of year so as to maintain a reasonable number of opportunities for New York-bred horses.”
Ultimately, Spectrum recommends a one-month closure of the Aqueduct winter meet.
The harness racing industry in New York is operating inefficiently, the report concludes, with “one major circuit (Yonkers, only a half-mile track) and four minor league circuits.
“The Standardbred racing industry in New York is ideally positioned to move to only two or a maximum of three well-defined circuits that horsemen can participate in year-round (and never have to leave New York State). This would make a much better product, increase average purses to attract others to race in New York, and increase field size and the quality of the races.”
Spectrum’s reality check
“The Spectrum recommendations in this report, if enacted, would benefit the State and the primary stakeholders – breeders, owners, and racetracks – that create a significant economic impact for the State.
“However, fears of one stakeholder benefiting more than another stakeholder could lead to more layers of distrust, preventing the implementation of ideas that could benefit statewide interests.
“Given the downward trends for the racing industry, instead of looking at capturing other industry participants’ market share to keep margins up, or discussion of why things can’t be done, the New York racing industry needs to collectively examine change in light of what can be done to benefit the state and the stakeholders.”