Historical horse racing helps spur optimism
Clabes said he was not surprised by the upbeat tone of the conference, a contrast to marked declines in some other racing jurisdictions.
“The indicators over the past few years have moved in a positive direction,” he said afterward. “Other states are going backwards in many ways. Legislatures are taking away what their horse industries had earned.”
He said one factor is the emergence of historical horse racing, the innovative technology that provides bettors an electronic experience but is parimutuel in its structure — and therefore the domain of the racetracks. Historical horse racing allowed Kentucky Downs to offer almost $8 million in purses and Kentucky-bred purse supplements for its record-setting five-date meet last month, along with transferring a game-changing $1.35 million into purses at Ellis Park, whose own historical horse racing has been picking up. Keeneland and The Red Mile harness track began partnering last year on historical horse racing in Lexington, with the state approaching $2 billion in betting since Kentucky Downs launched its first terminals in 2011. Turfway is working on a plan to install the machines.
While historical horse racing benefits the thoroughbred and standardbred racing industries, the sales tax on stud fees helps other established breeds in the state through the Breeders’ Incentive Fund.
“In Kentucky, we’re protected in one sense with historical horse racing being implemented through the regulatory process,” Clabes said. “It’s allowed the tide to be turned. Now the Standardbreds are coming back. The mares aren’t leaving the state in droves. They’re starting to come back home. The more the Breeders’ Incentive Fund grows, the more the (Kentucky Thoroughbred Development Fund), the Standard Development Fund grows, that is only going to be positive.”
Turfway plans to run five days a week in December
Ted Nicholson, who a year ago became senior vice president and general manager of Kentucky Downs, was on the equine industry economic reports panel. He said that Kentucky Downs’ average of almost 11 horses per race “is three more horses a race than what most racing secretaries are dying for today” — thanks to historical horse racing that has pushed purses to among the highest in America.
“Kentucky Downs is not a good success story. It’s a great success story,” Nicholson said. “… Any time you see a graph where the bars are going up and up and up is tremendous… Our expectations are for 2017, ’18 and ’19 going in the same direction. .. The beauty of my job, I work for an owner who gets it. He (Johnsen) knows our revenues are derived from historical horse racing, but we never forget why we are there — and that’s live horse racing.”
Conference attendant Chip Bach, general manager at Turfway Park, said track ownership continues to work on plans to install 250 historical horse racing terminals.
Turfway’s ownership is Jack Entertainment, which also owns a casino off downtown Cincinnati. “We don’t have an adversarial relationship with the biggest property in the area, which is a good thing for us,” Bach said. “I believe that river going across the Ohio is like 500 miles wide. People don’t like driving over it, and we have a fairly significant population in Northern Kentucky. I think from a casual basis, Turfway Park is going to be able to attract some people who don’t want to drive to Indiana or drive into downtown Cincinnati.
“We’re starting off a little small, with 250 machines, working on refacing the front of the building and upgrading things that should have been upgraded in maybe 1984. Our owners are going to work very hard not just to throw 250 machines into an existing facility and hope it sticks to the wall. They’re working on developing the entire experience. That’s why it’s not going as fast as some of our horsemen would like it to go to get those purses popped up. But we want it to be sustainable and make the experience a positive one.”
Bach said the Northern Kentucky track continues to seek out the best formula for how many days a week to race. The track faces the most severe competition for the discretionary dollar, from nearby casinos to the Cincinnati Bengals, of Kentucky’s five thoroughbred tracks.
Bach said that Turfway plans to run five days a week in December, Wednesday through Sundays, for the first time in years. Turfway will drop Sundays in January and February and go to three days a week in March, he said.
“The horse demand is important,” he said. “We only make money on the days we race. Every day we don’t race, we lose money. Most of our revenue is generated through simulcast outlets, not the on-track experience, so that’s very low-margin…. We’re continually trying to change the model to see what benefits the best purse situation we could have, the optimum amount of horses and racing as many days as we can.”
Up-close approach key to engaging new fans, lawmakers
Price Bell Jr., a fourth-general horseman from Lexington, was among those stressing the importance of individual contact, whether to create fans or educating legislators on issues impacting the horse business. Bell helped found the Horse Country initiative formed in 2015 by industry stake-holders to give the public an up-close look at Kentucky’s farms and veterinary facilities. Horse Country is patterned after the highly successful Kentucky Bourbon Trail to promote the commonwealth’s other signature industry.
“The consumer demand for taste and preferences has changed dramatically in my lifetime,” Bell said. “I think we took for granted that people would always bet on horses. Now you can bet on anything. The demand for experience has changed. People want to touch a horse. They want to have a horse breathe on them. They want to learn how horses are taken care of.”
He said that includes celebrating and rallying around their care after horses’ competition days have concluded.
“We need to continue to drive more experience-based exposure for the public to the horse,” he said. “I think we take for granted that we have the opportunity to see horses every day, and the majority of America and majority of the world does not.… We forever have not allowed people on the backside. We’ve forever have just exposed the horse on race day for about 30 minutes. They leave the barn that you don’t have access to; they walk in a circle, they go out and run and they go back somewhere. We can do a better job connecting people to the animal.”
An up-close approach also is paramount with elected officials, other speakers said. Ryan Quarles, Kentucky’s Commissioner of Agriculture and a former state legislature, said those in the industry must get to know their legislators.
“Go to the effort to invite them out to your farm or a horse event,” Quarles advised. “Educate them and do this throughout the year. So when a bill or piece of legislation does come up, they know who you are. They remember who you are. They can put context into what you’re asking about…. Politics is about relationships, being able to pick up the phone, shoot an email and get a response.”
He cited the push for sales-tax equality, saying, “When this is part of a larger, omnibus package about taxes in general in Kentucky, you need to make sure that this a priority that is communicated clearly to your legislature.”
Agreed Fran McCall of the Kentucky Farm Bureau: “You have to come in as a united front, no matter what you want to get done, whether in Frankfort or Washington. If you don’t have a relationship with your elected official, now is the time to do that…. Relationship building is key when it comes to policy development.”
Julie Broadway, the American Horse Council’s president who gave the keynote address, said, “It’s important that new members of Congress and the administration hear from the horse industry… We’ll be doing that in Washington, but it’s important that they hear from their constituency.”
By the numbers: 242,000 horses; 40,665 jobs
Dr. Jill Stowe, associate professor in the University of Kentucky’s Department of Agriculture Economics and director of the UK Ag Equine Programs, provided statistics from the 2012 survey on the state’s horse industry, the first comprehensive study since 1977. The survey determined there were 35,000 equine operations in the state with at least one horse in residence, totaling 242,400 equines (which include mules and donkeys), accounting for 40,665 jobs, 1.1 million acres devoted to equine use and with the value of equines and equine-related assets totaling $23.4 billion. Stowe said UK now plans to conduct such a study every 10 years.
Tom Biederman, of Biederman Real Estate and a noted equine auctioneer, said that the presence of the super wealthy among Kentucky’s horse farms is “a great thing” but that “we need to continue to help the small family farmer.
“Because at the end of the day, they are the ones who built (the industry) up from the beginning,” he said. “They came here and recognized that this land is great and this is where you can find and raise the best horses in the world. If we can all keep that in mind when we’re setting our stud fees… I love it that all these wealthy folks are here. They love our land; they take great care of it. But we have to realize we have to help those family farmers as well.”
Chauncey Morris, Executive Director of the Kentucky Thoroughbred Association and Kentucky Thoroughbred Owners & Breeders, said statistics show that the breeding industry is in recovery mode over the beat-down of the post-2008 market meltdown. He said that more than one-half of all the thoroughbred mares in the America two years ago were bred to one of Kentucky’s 278 thoroughbred stallions, no matter where the resulting foal was born. Morris pointed out that as the American foal crop has dropped significantly, the Kentucky-bred crop has been far more stable to where it now reflects about 36-percent of the foal crop.
“Are we in recovery mode? The statistics say we are,” Morris said.
Kentucky Horse Park to pursue 2022 WEG
New Executive Director Laura Prewitt said the Kentucky Horse Park declined to bid on the 2018 World Equestrian Games because of the timing but hopes to land the 2022 WEG. The Horse Park was host to the 2010 WEG, the first time it was held outside Europe.
Some symposium participants mentioned the competition for shows facing the state-owned Horse Park from North Carolina’s privately-owned Tryon International Equestrian Center.
“We have to continue to promote the Kentucky Horse Park and everything it does for Kentucky, because it does a lot,” Biederman said. “… We need to keep that as a crown jewel of Kentucky.”
Also on the horse-show front, an attendee from Edmonson County volunteered that what she liked about Kentucky Downs “is other breeds feel welcome there, and it’s accessible for everyone,” then asking Kentucky Downs management point blank “what’s the chance of building an indoor arena?”
Apparently very good, with Johnsen saying, “We would like to do an equine event center at Kentucky Downs.”
KHRC’s Guilfoil advocates ‘feet on grounds,’ uniform testing
Kentucky Horse Racing Commission Executive Director Marc Guilfoil, speaking on the legislative and regulatory panel, emphasized the need for “feet on the grounds security” at racetracks and said the technology has gotten cheap enough to install state-of-the-art camera systems on the backside. “Not getting them too much into somebody’s shed row but sort of a broad spectrum and you go from there,” he said.
He called the goal of uniform medication a “great” objective but said that first the laboratories conducting the equine testing must use identical equipment and protocols.
“If a Hershey candy bar isn’t made in Hershey, Pa., but made somewhere else, they use the same machinery, the same recipes, the same thing,” he said. “If we’re going to test for XYZ drug and use serum and plasma, everybody should use the same machine. Whether it be three, four or five uniform labs across the country, I think we just need to go for uniformity with that. And once we get that uniformity, we can get uniform regulations as far as treating things the same across the board.”
Making ‘something happen that is different’
Other panelists and moderators included Dr. Stuart Brown of Hagyard Equine Medical Institute; Norm Luba of the Kentucky Quarter Horse Association; Mistee Wrigley-Miller of Hillcroft Farm, a prominent competitor on the Saddlebred circuit and the sport of combined driving; Topline Communications’ Jen Roytz; Reese Koffler-Stanfield, owner and head trainer of the Maple Crest Farm dressage facility; the Kentucky Horse Council’s Katy Ross, and Rusty Ford from the Office of the State Veterinarian.
Tim Capps, director of the University of Louisville’s Equine Industry Program in the College of Business, moderated the panel on industry economic reports and concluded that the industry has “come a long way and a good way.”
“Where we are today isn’t where we were eight or nine years ago,” said Capps, who has worked in an array of capacities in the sport, including as Maryland Jockey Club executive vice president. “We went through a very difficult time, the most difficult in my lifetime. If you heard the conversion that went on today — from the audience as well as up here — you heard people talk about good things, exciting things new things.
“We did something we had not done before. Instead of as an industry talking about how bad things were, and how unfortunate they were and how sad they were and we needed them to be like they were in the old days, we just forgot about that. We said, ‘We’ve got to make something happen that is different from what we’ve seen before.’ And that’s what’s happened. That’s a reason to be positive.”