Cross Breeds

Thoroughbred horse racing: . Is it a growth industry? What changes do you foresee in the industry?

Working on my business plan for starting up a Thoroughbred racing and breeding farm, and am stumped on this question since all the racing breeders I`ve emailed refuse to get back to me:( So any help is appreciated. Thanks. Oh, and I`d like to see short and long term changes you foresee.

Public Comments

1. In the short term, it's not good. The downturn in the world economy is leaving most owners with less money than they had to fund expensive interests like racing. Only the very richest owners are not being noticeably affected, but there are not many of them. It might help a little to know what country you are in? No racing breeder is going to reply to you, since at best they would be giving out their own personal opinions on what problems their business is likely to face - That information could be used by their competitors against them. You are offering them nothing in return for that information either - Other that you would use their own information to set up in competition against them. Truthfully, look up the facts on how many "Racehorses" ever even get to run in a race - VERY few do. There are too many breeders and not enough owners as it is. Like any business, you need a "USP" or "Unique Selling Point" - In other words, some really good reason why people should buy from you and not your already well-established competitors you have more experience than others? - Access to superior bloodstock that no-one else has? - Can you do the job cheaper than others? - Are you the only supplier within normal traveling distance for your trade? and so on. To be honest, even long term, you are entering a cut-throat business where it will be very hard for you. If you are utterly determined, then good luck to you and I would not want to stop you, just make you think seriously about sinking so much money into something so competitive. The only other alternative might be if you are rich enough to be able to afford to run the business at a loss yourselves, just because you love it so much. Good luck with whatever you decide!
2. To add to TK_M great answer - In the United States, the amount of money bet on Thoroughbred horse racing hit an all-time high of $15.18 billion in 2003 and has been flat or down ever since then. And, the situation is even worse when you take inflation into account. Unfortunately, it has essentially been flat for a decade and for the last five years it has actually been declining. Unless we grow revenue and achieve a level of profitability that allows the people who put their money into horse racing to get an adequate return on investment, sorry to say, we have a bleak future. And, the lack of growth in wagering handle is a serious problem. People don't realize is that we had a great run in the '90s and then we either flat-lined or slightly declined in the last few years. The fact is in1990, horse-racing handle was at $9.39 billion, according to The Jockey Club, which tracks statistics in the horse-racing industry. It skyrocketed by 62 percent to the high in 2003. It is said the increase in handle in the 1990s and early 2000s was due primarily to the advent of simulcasting and other forms of distribution of the racing product, which allowed people to wager on races without actually being at the tracks where the horses were running. Tracks started to allow betting on other tracks' races. Off-track betting parlors and casinos added more betting options, and account deposit wagering allowed horse-players to bet over the telephone and computers while watching races at home. Handle simply went up as a result of the fact that one could bet on a lot more races in a lot more places. But in 2008/2009, it seems, the growth of distribution channels has been exhausted. The majority of that growth that could have been captured seems to have been captured, and it doesn't seem to be growing. Horse racing's heyday came back in the 1950s when going to the track was really the only game in town for people who wanted to gamble legally. But the sport began to get hurt by, first, state lotteries, and then the expansion of other forms of legalized gambling, including riverboats and casinos. Studies show when a casino hits your market, you have a 30 percent decline. To quote Greg Avioli, president and CEO of the Breeders' Cup World Championships, horse racing's annual championship event, said "the single biggest issue is the massive growth of other forms of gambling in the United States." "Racing went from being the exclusive form of wagering in the country to less than 5 percent of the total U.S. wagering market." Industry experts agree that attendance at the nation's tracks continues to decline, but the data is now anecdotal, as many tracks have stopped counting and reporting attendance. It's hard to say where this industry is going, and with all my heart I hope things start to look up in the near future. Here's a link to an article you might find interesting as ones view point from PA earlier this year. http://www.reuters.com/article/pressRelease/idUS165161+06-May-2009+PRN20090506
3. "It was the best of times, it was the worst of times." Right now Thoroughbred racing in the United States is at something of a crossroads for survival. Things are not looking good; paradoxically, that the possibility of much-needed reform that could breath new life into the sport more likely than ever before. The problem that Thoroughbred racing faces, more than anything else, is that it is not a unified entity in the way other sports-- major league football, basketball, hockey, baseball-- are; nor is it even a coordinated series of events, like the PGA Tour is or NASCAR is. Every racetrack is an entity unto itself. And therein lies the problem that has brought the sport to the pass it's come to. Thoroughbred racing has never been successful at promoting the sport on the national level. The NTRA, which aspired to be a unifying entity, did do the "Go, Baby, Go!" promotional campaign, but they never followed up with that as the separate elements of the racing industry went back to bickering and braying each over its own little patch of turf. Racing needs to have enough unity to build a promotional campaign on a national level and to present a single product to the public; and more than anything else, it needs to get its product onto television the way NASCAR, the PGA tour, and the other professional sports leagues are presented. NASCAR has presented a very viable model for how promotion can be done. It's not like racing's leadership needs to reinvent the wheel. But there needs to be unity among the elements, and for that I believe we need a "Racing Commissioner" with the same powers that the commissioners' offices have in other sports. In addition to a unified national promotional program and a single entity negotiating with the networks to get racing on TV so that every single weekend there's a major race to watch, we need a unified national policy on race-day medication, on licensing of participants, and most importantly on the welfare of the horses in the sport. As long as the major public perception is that Thoroughbred racing is a "blood sport," recruiting new fans and new owners-- the lifeblood of the sport-- is going to be a problem. Right now, with many tracks and most of the participants in dire financial straits, there is a willingness that I haven't seen before among racing's individual participants to subordinate their individual interests to the overrriding need of the sport as a whole to survive. Right now, some venues are getting by through conversion of tracks to "Racinos" where slots and table game revenues subsidize live racing. IMO, that's only a stopgap measure. Racing has to recruit fans who are loyal to the sport, not just people who would as soon bet on cockroaches as Thoroughbreds and for whom racing is a gambling pastime, not a sporting passion. If racing will make the radical changes it needs to do, I think the outlook is good. But I think otherwise we're looking at a continued decline and eventually only a few megatracks will exist, selling their signal to betting parlors. Not a good outlook for horsemen who want to breed and own Thoroughbreds.
4. Karin C is completely right, I must agree on all points there. Its not so much a problem here is Australia though so it depends on what country you live in to what is going on and what will happen. And this is quite sad but I recently found out the hard way - the only way you can talk to a breeder or even visit a stud is if you have a high up contact. Otherwise they don't really want to help. But once you have a good contact they are all extremely helpful.