A racetrack model to improve racing - right here in the US

On Tuesday, Karen Johnson wrote on promising recent developments at The Stronach Group’s (TSG) Gulfstream Park property, and exciting plans for the organization’s two tracks in Maryland, Pimlico, and Laurel. If you haven’t read it, you should.

I say promising because I believe that much of TSG’s recent success is directly related to simple concepts that are often missing in today’s racecourse management. Namely, putting racing first, and working collaboratively with the diverse constituencies that make up this industry. Both ideas have been critical to Gulfstream’s current success. 

It sounds simple, but it’s not. As a former racetrack operator, I can tell you that to run a successful racing operation, you need to work collaboratively with all members of the racing community – and that community has a diverse manifest of needs.

Consider the protracted battle over racing dates and wagering on incoming simulcast signals between TSG, and Churchill Downs, Inc., (CDI), owners of nearby Calder Race Course. Their fight was no good for Calder, no good for Gulfstream, nor for employees of either track, for horsemen and their employees, the owners who race in South Florida, the local jockeys, and, perhaps most importantly, no good for the wagering customers.

As outlined in the article, that all changed when TSG negotiated a six year lease with CDI that gives TSG control of all the racing dates on the east coast of Florida. The result is a year-round circuit that provides critical continuity for all the groups mentioned above. In 2014, Gulfstream’s pari-mutuel was a record $1.2 billion, accounting for 11.5 percent of the national U.S. Thoroughbred handle. As TSG and CDI did not end their stalemate until July of last year, this handle is almost certain to grow in 2015 with a full year under the new system.

This important deal proves that collaboration is clearly a priority of TSG operations in Florida.

Beyond working through difficult situations like the one above, TSG in Florida has proven itself a valuable and reliable partner for other industry groups. They have hosted the Eclipse Awards for the last three years and have contracted to host through 2016. Gulfstream also is in the third year of a contract with the National Horsemen’s Benevolent & Protective Association (HBPA), the Florida HBPA, and the Thoroughbred Owners and Breeders’ Association to host the Claiming Crown with record purses offered in 2014. Further, they built 150 new stalls to accommodate horses for Fasig-Tipton’s 2015 Florida Sale of 2-year-olds in training, which saw entrants breezing over the main track and sold in the walking ring.

The facts reported by Karen Johnson are truly astounding to me. In an industry known for its reluctance to collaborate, TSG has accomplished a lot in a very short period of time at Gulfstream. It bodes well for the future of Maryland racing, where TSG’s Chief Operating Officer Tim Ritvo has set an ambitious goal of working with horsemen and racetracks in neighboring Delaware and Virginia to create one integrated racing circuit for the three states under one racing office. This comes at as critical time as Colonial Downs, the only Thoroughbred track in Virginia, did not conduct racing in 2014 due to a bitter dispute between the Virginia horsemen and the operators of the track. A unified circuit would benefit all racing constituents in the mid-Atlantic region – wagering customers very much included given Ritvo’s pledge to lower takeout on Maryland racing. 

TSG has taken on issues that are not easily solved involving groups that are not easily satisfied. Creating year round circuits requires cooperation from horsemen, and capital investment in racing facilities that will stand up to use. Such improvements are expensive, but necessary for future growth. Takeout reductions will result in a short-term financial hit, but will provide future financial dividends for TSG and its customers. 

These groundbreaking initiatives in Florida and Maryland deserve support from all racing constituents. The leadership shown by TSG is unusual in an industry notorious for narrow thinking, and their tenacious efforts are a welcome departure from the quick “fixes” that too often cripple our sport. Will racing executives in other jurisdictions take note and follow their lead? Evidence so far suggests that they ought to.

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