Small Foal Crops Will Challenge Racing

While it already has faced many hurdles, if the declining North American foal crop is not turned around soon, North American racing will require creative solutions from racetracks and horsemen or face further contraction in the years ahead.

In a final-day presentation at the International Simulcast Conference Oct. 1 in Delray Beach, Fla., TrackMaster president David Siegel presented numbers from Equibase that suggest the declining foal crops will present a significant hurdle for racing in the upcoming years.

Following a 10-year stretch through 2013 in which the number of North American races has declined 20.2% and handle has dropped 28%, tracks and horsemen already have faced many challenges. But the smaller foal crops in recent years could be particularly troublesome if those numbers do not improve.

The 2013 Jockey Club-projected North American foal crop of 23,000 for 2013 is down 38% from the 2003 foal crop. Based on projections and final numbers through 2013, North American breeding numbers haven't shown a year-over-year improvement since a 1.1% growth in 2005 compared with 2004. That is eight straight years of reduced numbers.

Siegel worked with the round number of foal crops of 22,000 in the next six years. At those numbers, he projected a dramatic decline in the number of total Thoroughbred starts by 2020. In 2013, U.S. and Canada saw 58,138 horses make a total of 367,567 starts. Working with the 22,000 foal crop-figure going forward, Siegel projects total North American starts of 276,000 by 2020. That would mark a 24.9% decline.

A reduction of races or a reduction of average field sizes likely would follow that decline in starts.

Siegel also presented numbers that show how field size affects pari-mutuel handle. Looking at data from claiming races in 2013 at five different Penn National Thoroughbred tracks, Siegel found a linear relationship between starters and handle. In the 1,414 races examined, six-horse fields delivered an average of $100,000 in wagering while 12-horse fields delivered $175,000 in handle.

Claiming races were chosen for examination because Siegel found reduced variance from other factors, like field quality, in those races. 

Siegel noted there were gains with each horse added to a field but the amount of those gains declined per horse. Ten-horse fields averaged $150,000 in handle, or $15,000 a horse; while the $175,000 average for 12-horse fields represented $12,500 a horse. 

He said he'd heard people talk about "exponential" growth for each horse added to a field. He said that is not an accurate description of the impact of field size on handle, but he did find linear growth. 

Because of that linear relationship, with all other factors being equal, Siegel said an eight-race card with 10 horses in each race should generate the same handle as a 10-race card with eight horses in each race.