The Pegasus: here’s hoping they keep overcoming the challenges

Gun Runner wins last year’s Pegasus World Cup, in the process achieving a 120 Beyer Figure, the highest for the year. Photo: Mason Kelley

The announcement in 2015 by the Stronach Group and Gulfstream Park that they were to launch the Pegasus World Cup Invitational in January 2017 was greeted with a number of criticisms. Some naysayers suggested the inaugural $12 million purse was too extravagant, while others felt it would be difficult to get top-level participation in January.

Well, the first two Pegasus World Cups featured the two newly minted Horses of the Year and the then current Breeders’ Cup Classic winners, Arrogate from 2016 and Gun Runner from 2017. Arrogate used the Pegasus as a stepping stone to his win in the Dubai World Cup the following March. Gun Runner’s retirement to the breeding shed was postponed so he could run in the race, for which the prize fund had been increased to $16 million.

A colleague recently reminded me that Gun Runner ran a 120 Beyer Speed Figure in the Pegasus, which was the highest (and fastest) for the year. This colleague was an Eclipse award voter and was rightfully dismayed that Gun Runner has not received any recognition in the 2018 Eclipse Award voting for this performance.

Next week (Saturday, January 26), there will be two Pegasus World Cups - the $16 million has been divided between the Dirt race, now worth $9 million, and a new Turf equivalent with prize money of $7 million.

Substantial losses

Once again, the reigning Breeders’ Cup Classic winner, Accelerate, with five G1 wins on his 2018 resume, will be the heavy favorite for the Dirt race. There are only four other G1 winners in the field, and the wagering on the race will be concentrated in the top 3-4 horses.

Clearly, the experience of the first two years, where some owners had substantial losses, is starting to have an impact on the entry box, and this needs to be addressed going forward.

It appears that, in the first year, a majority of the owners lost up to $800,000 for taking part in the race. Last year, the buy-in entry fee remained $1 million per horse, but Gulfstream paid all the owners a $650,000 participation bonus. However, a large number of the owners still lost more than $350,000, including their expenses. For 2019, the buy-in entry fee has been reduced to $500,000, but the owners whose runners finish in positions 6-12 will lose a minimum of $250,000, including expenses.

In this excellent TRC article on January 11. Bob Ehalt spoke with two trainers on the issue of potential owner losses as a result of participation in the race. He quoted Chad Brown, the current Eclipse Award-winning trainer, “I just don’t believe that trainers and jockeys can take their normal commissions when the buy-in is so high. It doesn’t seem right when the owners lose money.”

‘Better off in a lesser race’

Hall of Fame trainer Bill Mott said, “Maybe your owner gets credit for some purse money, but you feel guilty charging them because they lost money on the deal … That’s why, if you’re going to be off the board, you’re probably better off running in a lesser race.”

Bill Finley in this past Sunday’s TDN quoted Bob Baffert as saying he was “very doubtful” that his horse, McKinzie, would run in the $9 million race. McKinzie would be one of the top 2-4 favorites due to his three career G1 wins, including the prestigious Malibu Stakes, which he won on opening day at Santa Anita. Baffert went on to say, “McKinzie is doing really well and he will get even better … The payment is $500,000, so you have to at least run third for it to be a push.”

It would appear that the Stronach Group will be sharpening its pencils once the results of the 2019 Pegasus are in. The collective thoughts of these participants in the Pegasus would seem to suggest that the current business model is not sustainable for the owners.

The first Pegasus day in 2017 set a new one-day total handle record for Gulfstream of $40.2 million, which was an encouraging start. However, in 2018, there was not a significant increase from the first year all-source handle. The 2018 total was a 3.8 percent increase to $41.98 million, but half of that increase can be directly attributed to a $1 million-plus increase in the handle on the Rainbow 6 progressive wager.

If you look at last year’s attendance of 16,400, you might think there is substantial potential for an on-track handle increase. However, I attended the Pegasus in 2018 and the track was filled to near capacity.

When Gulfstream was torn down and rebuilt in 2004, there were only about 1,000 outdoor seats built for patrons, and most of the seating is available in the simulcast center or in the broad array of hospitality offerings. Without a substantial increase in proper seating at Gulfstream, I do not see how there could be a significant on-track handle increase.

This is unfortunate because the dollar-for-dollar on-track handle increase generates a much larger financial return to Gulfstream than a similar increase in simulcast revenue.

Wagering menu

It is certainly possible that the new Pegasus Turf race will generate a lift in handle, but the remainder of the card is very consistent with the current wagering menu at Gulfstream and would not appear to offer a lot of wagering upside. On next week’s 12-race card, there will be ten additional races, including four G3 and prize money of about $1.3 million.

Turning to the inaugural Pegasus World Cup Turf Invitational, Gulfstream is struggling to fill the 12 slots in the starting gate.

The betting favorite at the moment would probably be Yoshida, trained by Bill Mott and winner of two G1s and a G3. There are two international runners, both fillies. Magic Wand is Coolmore-owned and trained by Aidan O’Brien and won the G2 Ribblesdale Stakes last June at Royal Ascot. Aerolithe is owned by Sunday Racing in Japan, trained by Takanori Kikuzawa and winner of three Graded stakes.

Every American racetrack is always trying to get Japanese horses to run in their major stakes programs because of the size and intensity of the Japanese wagering public. However, the Japanese Racing Association has a tight limit on the number of races that they can bet on in foreign countries and, sadly, the Japanese will not be allowed to wager into the Pegasus Gulfstream pools this year.

For a purse of this size, one might expect a lot of European entrants in the Pegasus Turf. However, there would have to be a huge change in European training habits to increase the number of turf horses traveling to the U.S. market during our winter. There is no turf flat racing in Europe after the fall season is complete, and, if a European trainer is inclined to race over the winter, they would generally choose  to participate in the two-month Dubai Carnival.

The major year-end event in Ireland is Irish Champions Weekend in mid-September, in France it is Arc Weekend in early October and, in Britain, it is British Champions Day at Ascot in late October. Europeans will continue training a select group of turf horses up to the U.S. Breeders’ Cup in early November, but it is highly unlikely there will be much European participation either on the turf or the dirt for the Pegasus going forward.

The need for high-level performers

Finally, I would like to make one final point that does affect field size and the pool of potential horses for the Pegasus, and which might explain why some parties thought that winter might be an issue for the Pegasus.

As we know, all horses in the Northern Hemisphere have January 1 as their birthday. Many of the best new 3-year-olds will be taking part in the Triple Crown preps, but none of them will be running against older horses until deep into the second half of the year. Clearly then, the Pegasus relies on older horses to continue racing at the upper levels of the sport. The more that high-level performers stop racing at the end of their 3-year-old season due to breeding plans or injury, the fewer that will be available for the Pegasus. Justify, who will likely be named the Eclipse award winner for Horse of the Year next week, is exactly the type of horse we would all like to have seen race in the Pegasus.

Despite the challenges, I congratulate the Stronach Group and the management team at Gulfstream. Best wishes to them for continued success in the growth and opportunities presented by the Pegasus World Cup Invitational initiative.

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