Racino states draw breeders

A good indicator of the racing industry’s health in a given state is the number of mares it sends to the breeding shed.

This is a factor I try to illustrate whenever I explain Michigan’s situation to those unfamiliar with the industry. Because I am a strong believer in visual aids when giving a presentation, I decided to put together a chart to describe the breeding industry in the state of Michigan, compare it to other states in the region and explain the impact of alternative wagering on everyone involved.

It is no secret that horsemen are flocking to states with casino gaming at its racetracks. The fact will inevitably be brought up in any discussion about alternative wagering in a state that lacks it. However, the point is driven home when the figures are in clear sight.

Let’s have a look at the chart…

Thoroughbred Mares Bred in the Great Lakes Region by State, 1998-2009

Thoroughbred Mares Bred in the Great Lakes Region by State, 1998-2009.

X Axis = Year; Y Axis = Mares Bred *2009 figures are current as of 10/13/2009. Some reports are still yet to be received by the Jockey Club.

For a more detailed breakdown of the year-by-year breeding totals, a spreadsheet of the above data may be read here.

So what can we learn from these figures?

First and foremost, breeders are taking their mares where their foals can make the most money. The top three states listed in this sample are “racino states” (Because of its clear breeding advantage in the region, Kentucky was not included in the sample). The increased purse structure that comes with expanded gaming not only gives the horses themselves the best chance to earn a good living, it trickles down to the breeders in the form of incentive programs.

Also worthy of note is that in 1998, two of the three leading states (Indiana and West Virginia) actually bred fewer mares than Michigan. Today, both states breed several hundred more.

The clear exception to this rule is West Virginia, whose figures have actually decreased since installing full-blown slots in 2006. Two factors may be responsible for this. First, West Virginia installed slots at the same time as neighboring Pennsylvania. The 2007 debut of Presque Isle Downs, about 135 miles away from Mountaineer, also helped draw horses out of West Virginia. Second, the breeder’s incentive program in Pennsylvania is quite lucrative. Boosting the purses only made it that much juicier. Here, have a look for yourself…

Breeder’s Incentive Programs in the Great Lakes Region by State

However, West Virginia enjoyed a major boost throughout the first half of the decade. It was the first state in the region to adopt expanded gaming in 1999 when it installed coin-operated video lottery terminals. With the help of the VLTs, West Virginia pulled itself up from the dregs of the racing world to the point where the state actually led the region in mares bred in 2004. Despite the recent dropoff, West Virginia remains well ahead of the game from where it began.

Another conclusion that can be drawn from the data is racino states are drawing mares away from non-racino states. The poster child for this observation is Ohio, a state flanked by one armed bandits in Pennsylvania, West Virginia and Indiana. Eleven years ago, the Buckeye State accounted for a comparable number of mares bred to Pennsylvania and was well ahead any of its other neighbors (excluding Kentucky).

As more and more states allowed its tracks to install casino-style gaming, the breeding totals in Ohio began to plummet. In 2009, the state is in danger of breeding fewer than 200 mares, a figure that would have seemed unheard of less than a decade ago.

Other states in the region without any forms of alternative wagering, Illinois and Michigan, have also seen significant drops as their neighbors reaped the benefits.

Once the cornerstone of the Great Lakes region, Illinois has seen its breeding totals cut in half over the last decade. Michigan’s drop off has been just as drastic, with a decrease of over 40 percent in the last year alone.

As these figures demonstrate, the benefits of installing alternative wagering are quite apparent on the breeding industry of that state. The increased purses and breeder’s incentives make them attractive places for horses to send their mares, which in turn improves the reputation of that state’s racing industry. At the same time, neighboring states without expanded gaming will be adversely affected as its horsemen migrate to states where they can make the most money.

Racinos have the ability to shift the balance of power in a region. It is time for the state of Michigan to decide which side of the scale it wants to sit.

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8 Comments

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8 responses to “Racino states draw breeders

  1. ragman

    The best Indiana Bred? The best West Virginia Bred? The best Pa Bred? Not exactly household names are they? So does slot money improve the breed? I don’t think so.

    If you’re into statistics this morning, what do you think of Belichick going for it on his own 28 with 4th and 2 and a 6 point lead late in the game? Statistics were on his side.

  2. Interesting post. I am worried we will lose racing in my home state of Ohio.

  3. mibredclaimer

    Ragman,
    Best PA Bred – A horse you might have heard of called Smarty Jones. However, he was pre-slots, so I’m guessing that’s not the direction you were going.

    It takes three or four years for the first crops of the racino era to make it to the track, so the time to start judging the effectiveness of racinos on the state’s breeding program is probably Jan. 1 of the coming year, and continuing on for the next three or so years. Only when these foals have had an opportunity to prove themselves on the racetrack can we effectively make an observation on the impact of slots. All I’m saying right now is the racino states have been very attractive to breeders, often at the expense of its neighbors.

    Indiana – Because Indiana just put in slots, it is too soon to expect the national-level horses to come out of that state. Right now, Indiana’s two and three-year-olds are coming from crops when their industry’s numbers were comparable to Michigan’s. We are still a long way from reaching a conclusion here.

    West Virginia – You’ve got a point on this one. WV has had more than enough time to produce that household name and has failed to do so. Perhaps this has something to do with the exodus of mares to other states.

    As for Belichick, the play would have been fine had the receiver been another yard up the field. In a big situation like that, you’ve got to know where you are in regards to the first down marker. With the offense he has, I can’t say I can fault him for trying it, but if I were the coach or the quarterback, I would have looked elsewhere.

    Ryan,
    I’ve got to admit, the decrease floored me when I saw how steep that line went down – even more so when I saw the totals for this year. I hope Ohio manages to right the ship, because I have enjoyed myself during my visits to Beulah Park and River Downs and would hate to see them go.

  4. ragman

    Ryan

    Beulah did $40,857 on track and $1,260,590 off track today so I doubt that they’ll be closing. I’ve read where the people might try and keep the casino out of Columbus. Where can you get a better payoff for a dime than the last race super…$22,556.86. That guy will be betting tomorrow.
    Anyone know the top on track and off track handle for Pinnacle?

  5. As much as I hate to admit it, racetracks today struggle to survive without some form of casino style gaming. Of course there are the exceptions like Churchill, Santa Anita and the like, but even the NYRA is looking onto gaming at Aqueduct and look at the casino with a horse track Gulfstream has become. I dont think anyone expects Michigan to produce Triple Crown caliber horses with gaming but you would have to think the product would get better.

  6. Emilie

    Just a quick opinion, not very well thought out…

    I don’t think that the monetary increase for breeders in gambling leads to better horses, only more horses. Perhaps eventually it would, after the breeders get enough money back to invest it in themselves, but until then it’s just a matter of which of your mares you’d breed that year. (Out of state immigrants are another matter, but that’s merely moving quality around as opposed to creating it.)

    However, the band-aid that is a racino is still a band-aid. As it’s been said many times before, they are not a long-term solution by any means, but they sure give the illusion of helping today. And racing needs any advantage given.

  7. mibredclaimer

    Bill,
    One thing to note is many of the tracks you listed have decades, or even centuries of history to back them up. People go to Saratoga because it’s Saratoga. It doesn’t need an additional drawing point to draw people and make money.

    Many of the tracks adding slots do not have that history, or have a history of being a lower-level track. Few people would likely choose Mountaineer as a genuine destination had it not installed casino gambling.

    Whether racinos would improve the product/breed remains to be seen, but the additional money the breeders would make would give them more opportunities to do so.

    Emilie,
    You are correct about the increase of mares bred potentially producing more quantity than quality. If the bloodlines don’t change/improve, there is no reason to believe the results will either.

    I think that’s what may have happened in West Virginia. Looking down the list of leading sires, I couldn’t pick any out of a police lineup. The size of the purse means little if the class isn’t there.

    That’s why racino states need lucrative incentive programs for sire owners to encourage higher-class stallions to test new waters. I don’t know what Indiana has for a sire program, but I keep hearing about Kentucky sires and farms considering making the move up to the Hoosier State. Even if a few middle-of-the-road Kentucky sires find their way there, the overall quality of the stallion pool will likely increase, thus potentially improving the breed in that state.

    There is no doubt the industry will need to help itself if it wants to improve its product. Simply plunking down a few hundred one-armed bandits at a low-level racetrack won’t magically change it into Churchill Downs. However, as I mentioned to Bill, they will give breeders additional opportunities to buy higher-level mares, visit higher-level stallions and hopefully create a stronger state-bred program. They just have to take those steps and not assume the work ends when the casino opens. It would take some time and effort, but I think it’s possible.

    However, I too have my reservations about racinos as a long-term solution. But it’s hard not to look over the fence at our neighbors and wonder why we can’t join the party.

  8. ragman

    Nov 25th
    Of interest…… equidaily.com….Video/Louisville TV News…..Indiana slots second thoughts.

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