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January 12, 1970
Though economists predict trouble in 1970, the view of one of sport's major activities—horse racing—remains bullish
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January 12, 1970

Recession Ahead? No Sign Here

Though economists predict trouble in 1970, the view of one of sport's major activities—horse racing—remains bullish

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The market is down, the weather is lousy and holiday bills are coming due. On top of all that, the financial-page pundits are generally gloomy. Are we really in for a recession? It would be presumptuous to suggest that the sporting world can supply an answer, but one area of sport traditionally provides a unique barometer of the economic weather ahead. The good health of horse racing requires that people not only pay their way in to enjoy the fun but carry enough cash to augment that pleasure by betting. Racing is a $7 billion industry-sport at work in the national economy, operating virtually every day of the year on a wide front encompassing 30 states where pari-mutuel betting has been legalized. So how is it doing in early 1970? The indicators say: never better.

Fred Van Lennep, a tall, slick-haired ex-Philadelphian, runs a trotting and thoroughbred track in Michigan, a trot meeting in Florida and another in Kentucky, where he owns the flourishing Castleton breeding farm. He also controls the Hollywood, Fla. dog track where business is up an astonishing 51% over last season. The other evening Fred was admiring crowds lining the rails at his handsome Pompano Park and queuing up at the windows. What about the future? "At a time when the cost of everything is going out of sight," he said, "you can still buy a pari-mutuel ticket for $2." It was more than a wisecrack, more than an indication of racing's special appeal. It said that money is available—for sport and other good things. "I see no recession in racing in the coming year," Van Lennep added. "I look on sports of any kind as the only outlet for people working 35 to 40 hours a week, with money in their pockets. Racing will be enhanced because personal sports activities like golf and tennis are becoming more expensive. And I, for one, find racing becoming more and more accepted by young people." At Van Lennep's turnstiles, his betting windows and in his swank Top of the Park restaurant, business is better than it has been since Pompano opened six years ago. With rare exceptions, that is true around the country.

Thoroughbred and harness racing have just finished their most spectacular year, with attendance at 64 million and a betting handle of $5.5 billion. Those 30 state governments received close to $450 million in taxes and, as usual, made familiar noises about wanting more. They will undoubtedly get more. (One possible exception is California, where a labor dispute has delayed the opening of Santa Anita and Bay Meadows. Each day the tracks are shut the tax collector loses $200,000.) At the Fair Grounds in New Orleans the betting handle is up nearly $2 million over last year's figures, and both attendance and the concession business are climbing steadily. The figures at Phoenix's Turf Paradise are up substantially, too. At Laurel's chilly winter meeting the Maryland track almost matched last season's best-ever business in the face of severe competition from the first-year operation of flat racing at Pennsylvania's Liberty Bell. At Liberty Bell itself crowds have reached 17,948, and on one subfreezing Saturday, despite a muddy track and 25-mile-an-hour winds, the crowd totaled 9,666, including 47 busloads of anxious bettors, 29 of them crammed with refugees from New Jersey and New York. And last Saturday evening, with huge snowbanks lining the rails all along the home stretch, the largest audience ever to attend a winter opening in New York—28,042—poured into Roosevelt Raceway and then bet more than $2 million.

If the overall picture continues bright, it is only fair to note that for many participants in racing (including bettors) it remains a most frustrating affair. Thoroughbred competition in the U.S. is the richest game in the world, but of all the owners of some 45,000 horses that raced in 1969, fewer than 10% were fortunate enough to break even or show a profit, and that figure is not likely to change. Still, trainers collected their 10% winnings on purses of $161 million and the top jockeys enjoyed their best year. Four riders—Velasquez, Cordero, Belmonte, Baeza—earned more than $200,000, and 18 others, including such nonhousehold names as Whited, Hole, Miceli and Ro-sales, took home more than $100,000 apiece. In trotting, seven drivers won purses of more than $1 million; four years ago there were none.

In the business world, indications of confidence in the future are often to be found in the volume of investments for expansion. The corollary in racing involves the degree of activity on breeding farms and the sale of young horses that will not be ready to earn a dime for their new owners for many months. Certainly if breeders and buyers were suffering from anxieties, they did not bring along their fears to the major sales in 1969. Thoroughbred's Fasig-Tipton Company, Inc. and Keeneland's Breeders' Sales Company did a record-breaking $52 million worth of business. At the major trotting auction in Harrisburg in November more yearlings than ever were offered and one brought $125,000, another record. The total for standard-bred sales, more than $18 million, also was a new mark. Delvin Miller, trot-ting's all-round participant as owner, trainer, driver and track president, commented on the trend: "In the last five years we've been getting more racing days and more tracks, but the good horses have been spread around too much. Now the supply is beginning to catch up with the demand. More good colts are bred and sold every year, so the quality of racing must improve and the fans are aware of it."

Fasig-Tipton President John Finney says, "A mild recession won't have too much effect on the horse business. The quality markets are on a sound basis and will hold a solid market, even though the cheaper horses may be affected by the continuing of tight credit. Recession is a dangerous word, but I can see no diminishing interest and no loss of confidence among the real foundation men of the game. And certainly there is no lessening demand for horses. What sets the value of horses is to be found, ultimately, back at the $2 window, and I haven't seen a trend to lower betting."

Despite recent passage of tax legislation that racing people consider far more favorable than they anticipated, the volume of business at the thoroughbred sales rings in 1970 is not likely to top those of the past two years unless there is a one-man buying spree like the one put on by Wendell P. Rosso, who bought four Sea-Birds for a total of $602,000. Another reason is that 1969 also saw a number of wholesale dispersals that boosted sales figures, including the auction of Captain Harry F. Guggenheim's famous Cain Hoy Stable for more than $4.7 million.

For all these signs of high-flying prosperity, thoroughbred racing is entering a tricky period, one that may be less influenced by fears of recession than by the judgment of those who manage individual tracks and administer the sport itself. If not in 1970, then certainly in the early '70s, important decisions will have to be made on a number of questions. Among them are offtrack betting (which seems certain to make its North American debut in the Canadian province of Ontario within a year), increased Sunday and night racing, uniform medication rules, just pension plans for backstretch help and satisfactory agreements between tracks and unions to prevent strikes like the one that threatens to wipe out the entire Santa Anita meeting.

"The welfare of racing," says John Schapiro, president of Laurel, who is also starting his second term as head of the 57-member Thoroughbred Racing Associations, "is, of course, tied in with the economy of the nation. We would have to expect a downward trend—just like any merchant—if there is a bad recession. But right now the trend is up. Our big problem is that we can't fight a downward trend the way other businesses can, because we are so heavily regulated by law."

In California, where there is obviously reason for concern, Santa Anita General Manager Fred Ryan says, "I believe racing is in a troublesome period. It is almost at its zenith and we must take steps to market our product better. This is one industry where you can't pass on increased costs to customers easily."

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