FRIDAY, OCTOBER 2, 2020 >RISING STARS= FACE OFF IN ALCIBIADES PANDEMIC IN NUMBERS: A trio of >TDN Rising Stars,= including unbeaten Thoughtfully GREAT FOR ADWS, NOT SO (Tapit), will square off in Friday=s GI Darley Alcibiades S. at Keeneland, a >Win and You=re In= for the GI Breeders= Cup MUCH FOR PURSES Juvenile Fillies. The rail-drawn Thoughtfully, tabbed as a >Rising Star= out of a blowout debut win for Steve Asmussen at Churchill Downs June 11, made good on the promise with a sparkling performance in Saratoga=s GII Adirondack S. Aug. 12. The $950,000 FTSAUG graduate tries two turns for the first time here. Drawn one to her outside is fellow >Rising Star= Travel Column (Frosted), herself a flashy debut winner going six furlongs on the GI Kentucky Oaks undercard Sept. 4. Brad Cox trains the $850,000 FTSAUG yearling. Cont. p6 IN TDN EUROPE TODAY OASIS DREAM FILLY TOPS CHALLENGING ORBY Roundhill Stud’s £450,000 daughter of Oasis Dream led the Empty betting terminals are hurting California purse revenues way at an Orby sale that, in a challenging year, struggled to Sarah Andrew keep pace with prior editions. Click or tap here to go straight to TDN Europe. by Dan Ross Like an overzealous professor, the pandemic has taken a bright red marker to the status quo, with the racing industry very much on the receiving end of this economic revisionism. When it comes to California alone, startling betting patterns have emerged with potentially serious ramifications for the long-term sustainability of the sport in the state--that's according to handle and purse data from the first eight months of the past three years put together for the TDN by the Thoroughbred Owners of California (TOC). Among the key takeaways is this: While a dramatic reordering of betting patterns has facilitated a quarter-billion dollar boon for the advance deposit wagering (ADW) industry, that hasn't translated into a windfall for California horsemen. Purse revenues in California during the first eight months of 2020 have fallen by $23 million when compared to the first eight months of 2018, and a $12-million loss from the same period last year. The primary reason for such a marked drop in purse revenues is a fundamental pivot away from brick and mortar betting facilities shuttered during the pandemic--those which provide the highest purse retention rates--to lower yield ADW platforms. Cont. p3 PUBLISHER & CEO Sue Morris Finley @suefinley [email protected] SENIOR VICE PRESIDENT Gary King @garykingTDN [email protected] EDITORIAL [email protected] Editor-in-Chief Jessica Martini @JessMartiniTDN Managing Editor Friday, October 2, 2020 Alan Carasso @EquinealTDN Senior Editor Steve Sherack @SteveSherackTDN Racing Editor Brian DiDonato @BDiDonatoTDN Deputy Editor Christie DeBernardis @CDeBernardisTDN Associate Editors Christina Bossinakis @CBossTDN Joe Bianca @JBiancaTDN News and Features Editor In Memoriam: Ben Massam (1988-2019) ADVERTISING [email protected] Director of Advertising Alycia Borer Advertising Manager Lia Best Advertising Designer Amanda Crelin Advertising Assistant/Dir. Of Distribution Rachel McCaffrey Advertising Assistants Amie Newcomb Kristen Lomasson Kentucky Derby winner Authentic (Into Mischief) schools at Pimlico ahead of Photographer/Photo Editor Saturday’s Preakness. | MJC Sarah K. Andrew @SarahKAndrew [email protected] Social Media Strategist KY OCTOBER YEARLINGS CATALOG ONLINE 10 Justina Severni Fasig-Tipton has catalogued 1,553 yearlings for its Kentucky October Yearlings Sale, to be held Oct. 26-29, in Lexington, Ky. Director of Customer Service Vicki Forbes "This is the strongest group of yearlings we have ever offered at [email protected] Kentucky October," said Fasig-Tipton President Boyd Browning. Marketing Manager Alayna Cullen @AlaynaCullen TODAY’S GRADED STAKES Director of IT & Accounting EST Race Click for TV Ray Villa 7:50a Prix Thomas Bryon Jockey Club de Turquie-G3, SCD -------------- ----- [email protected] [email protected] 5:05p Stoll Keenon Ogden Phoenix S.-GIII, KEE TJCIS PPs TVG 5:40p Darley Alcibiades S.-GI, KEE TJCIS PPs TVG 6:20p Pimlico Special S.-GIII, PIM TJCIS PPs TVG WORLDWIDE INFORMATION International Editor Kelsey Riley @kelseynrileyTDN [email protected] European Editor Emma Berry [email protected] Associate International Editor Heather Anderson @HLAndersonTDN Newmarket Bureau, Cafe Racing Sean Cronin & Tom Frary [email protected] 60 Broad Street, Suite 100 Red Bank, NJ 07701 732-747-8060 | 732-747-8955 (fax) www.TheTDN.com TDN HEADLINE NEWS • PAGE 3 OF 15 • THETDN.COM FRIDAY • OCTOBER 2, 2020 Pandemic in Numbers cont. from p1 More specifically, the shift has been toward ADW monies wagered in California on out-of-state races, which have the lowest purse retention rates of all the potential betting avenues in the data table. But other factors are certainly at play and, in another respect, the massive handles garnered by the ADW industry have helped to buffer the steep declines in the number of races run in California this year. For the purposes of analysis, the TDN has primarily compared this year's numbers to those of 2018 due to the Santa Anita welfare crisis skewing last year's totals. Races and cards There have been roughly 30% fewer races run this year compared with 2018, and nearly 32% fewer cards compared with two years prior. Things looked different at Santa Anita last year Breeders= Cup/Eclipse Sportswire Brick and mortar Overall handle--including all wagering from within California and out-of-state wagering on Californian races--has fallen by $368 million from 2018. This works out to a drop of 18.8% from two years prior on about 30% fewer races. Unsurprisingly, the largest decreases can be observed at brick and mortar facilities. The amount wagered in California at brick and mortar facilities on California races dropped some $252.7 million from 2018, and on out-of-state races at brick and mortar facilities by some $169.1 million. Combined, that decrease amounted to some $421.8 million less wagered in California at brick and mortar facilities--a drop of over 70% from 2018 numbers. TDN HEADLINE NEWS • PAGE 4 OF 15 • THETDN.COM FRIDAY • OCTOBER 2, 2020 ADW and purse retention Out-of-state wagering on California races has dropped about 21% Robert Duyos The amount wagered in California through ADW platforms on both California races and out-of-state races constituted a roughly quarter-billion dollar windfall for ADW platforms from two years ago--a 59% increase. Interestingly, the average ADW amount wagered per race on California races has grown from $67,000 in 2018 to $110,000 this year--an increase of 64%. Despite the ADW companies reaping such prolific profits during the pandemic, the purse retention percentages from ADW handle are so low, and the losses to brick and mortar revenues--those with the highest purse retention percentages-- so precipitous, that purse monies have suffered a hefty body blow this year compared to years prior. To highlight just how costly a hit this has been to California horsemen this year, purse revenues have shrunk from roughly $87.8 million in 2018 to $64.3 million this year--a decline of just over 26%. While that's with 30% fewer races run in California this year, the overall decline in handle from 2018 was only 18.8%. This purse decline has been exacerbated by a noticeable swing not only toward ADW platforms, which carry a lower purse retention rate than brick and mortar facilities anyway, but specifically toward ADW betting in California on out-of-state races, which have the lowest purse retention rate of all the various betting avenues. Indeed, the amount of money wagered in California on out-of-state races on ADW platforms increased by $225.5 million between 2018 and 2020, but purse revenues from these monies grew by less than $7 million. During that period, the purse retention rate dropped from 3.46% to 3.29%. While the amount of money wagered in California on TDN HEADLINE NEWS • PAGE 5 OF 15 • THETDN.COM FRIDAY • OCTOBER 2, 2020 California races on ADW platforms increased by $25.3 million Questions for the future between 2018 and 2020, purse revenues from these monies The numbers raise all sorts of pivotal questions. For one, rose by only $1.3 million. During that period, the purse retention exactly how will the industry continue to oil critical daily rate dropped from 5.94% to 5.81%. operations--things like the running of the California Horse The all-source purse retention rate has decreased by nearly Racing Board (CHRB), the stabling and vanning fund, the half a percentage point since 2018--a drop that has cost the off-track wagering network, and workers= compensation. These California horsemen over $7 million in potential purse revenues have traditionally been funded primarily through on-track and alone this year. satellite wagering revenues. It should be noted that purse percentage retention rates are Stepping back, these numbers also raise fundamental hard-baked into contracts, all of which are up for renewal at the questions about the long-term viability of the industry in end of the year. California in the event the economic toll from COVID-19 is sustained, especially if brick and mortar facilities stay closed, Wagering from outside CA and the current betting patterns and purse retention rates The amount of money wagered out-of-state on Californian remain unchanged. races fell from $944 million in 2018 to $747 million this year--a How long, for example, can California purses--already the drop of about 21%. To put that into perspective once again, poorer cousins of some other states--remain constricted before there was a 30% decline in the number of races run in California that parlays into lasting economic harm to the horsemen in this year.