An Embarrassment Of Riches

OUTSIDE OF the racing, there was almost nothing pleasant about last weekend's Breeders' Cup at New Jersey's Monmouth Park. Two days of steady, soaking rain turned horse racing's world championships into a test of endurance for fans and horsemen alike. The turf course was a bog. The main track was muddy slop. And the facility itself was reduced to a damp, steamy shelter from the elements. But a funny thing happened: People came anyway, 69,584 of them to be exact. And the total common-pool handle for the Friday-Saturday event—including money bet both on-track and from pari-mutuel outlets all over North America—was a not-so-dreary $142,700,099.

There is no sport in America as resilient as thoroughbred racing, an industry that doesn't care about winning ugly. In the decades since its precasino heyday, racing has often seemed to be suffering a slow death, or at least an inexorable slide into irrelevance. On-track attendance has dwindled, in some places, to almost nothing; television ratings pale in comparison with those of other major sports, and coverage in local newspapers—most of which don't bother to staff the thoroughbred beat anymore—has been relegated to the agate-type boxes on the back of the sports page. When racing has managed to produce a true equine star—Smarty Jones, for example—the fame only throws the obscurity of the rest of the game into sharper relief.

But while the sport of kings hasn't maintained the conventional appearances of a robust enterprise, there is one function that it performs extremely well: the production of revenue. Events like the Breeders' Cup (which offered $24.1 million in purses) and the Triple Crown races pad the bottom line, but the fact is that racing does just fine the other 361 days of the year. In 2006 the pari-mutuel handle in North America topped out at $15.6 billion. Because tracks keep between 15% and 25% of every dollar wagered on their races, about $3.1 billion of that total is revenue, putting a sport that is supposedly outside the mainstream on par with the NBA (which earned $3 billion last season) and above the NHL ($2.3 billion). "Racing has a unique advantage," says David Nathanson, general manager of TVG, one of two racing-only cable networks. "It's the only game that's a truly legal interactive experience."

All that "interactive" money offsets the sport's bleak attendance and TV numbers. Although Saratoga and Del Mar still have no trouble filling seats, racing's audience has, for the most part, gone postmodern: It's been dispersed not by disinterest but by the Internet, simulcasting and telephone-account wagering outlets, all of which offer hassle-free ways to get a bet down. (Total handle by phone and Internet TVG accounts last year was $433 million.) Fans—and here we mean those whose grasp of the sport goes deeper than the sad saga of Barbaro—are still going to the races; they're just not journeying to the track. "Racing isn't what it was even back in the 1960s, but it's still in a much better place than people give it credit for," says Bill Nader, a former New York Racing Association executive now with the Hong Kong Jockey Club. "To compete with casinos and lotteries, racing adjusted by taking its product directly to the customers."

That product is still worth sampling. On Saturday, with the sun peaking through for the first time in two days just before post time, Preakness winner Curlin came flying down the homestretch, showing his muddy hooves to Kentucky Derby champ Street Sense and a full field of other champs in a Breeders' Cup Classic for the ages, the mile and a quarter clocked in a track-record-tying time of 2:00.59. Earlier in the day the 2-year-old War Pass blazed to a wire-to-wire win in the Breeders' Cup Juvenile, establishing himself as the early favorite in the 2008 Kentucky Derby.

The real problems in racing these days are similar to those facing just about every major sport—overexpansion (there are almost more races run in the U.S. than there are horses available to run them) and the use of performance-enhancing substances ( Kentucky stewards slapped trainer Patrick Biancone with a suspension last week after they found cobra venom, a powerful painkiller, in his barn at Keeneland). The game has also been plagued by tragedies of the sort that felled Barbaro; 4-year-old George Washington broke his leg in the Classic and had to be euthanized. These are daunting issues, but they shouldn't obscure the fact that thoroughbred racing in the U.S. is as healthy as it's been in a long time. Racing isn't dying. Far from it. Follow the money, and you'll find the game.

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