Symposium: Purse Distribution Changes Eyed

The New York Racing Association may run some races that pay up to eight places when the Saratoga Race Course meet rolls around in 2015.

That rather significant change was one of several discussed by New York Racing Association senior vice president of racing operations Martin Panza during a panel discussion on field-size challenges and solutions on the first morning of the 2014 University of Arizona Global Symposium on Racing & Gaming Dec. 9, in Tucson, Ariz.

NYRA changed its purse distribution for graded stakes this year on Belmont Stakes (gr. I) day when it moved away from paying just the top five finishers. For instance, when Declan's Warrior finished eighth in that day's $1.25 million Metropolitan Handicap (gr. I), he picked up $25,000 for his connections.

Panza noted that NYRA is aware that with deep, quality fields on its biggest days, it will draw strong pari-mutuel handle numbers. He said for a trainer, it's a big decision to commit to a stakes, and NYRA wants to reward that decision by providing opportunity beyond just the top finishers.

Panza said it may be time to move away from only paying down five or six spots in races with the hopes that paying down more positions will encourage horsemen to race more often. He believes the current structure is more of an all-or-nothing proposition that may too often encourage horsemen to wait for a perfect spot.

He also noted that the new approach would provide more opportunities for owners to receive returns on investment.

Generally speaking, Panza said many trainers have moved from racing their top horses about 20 times a year and training about 20 times a year to horsemen who train about 40 times a year and race six times a year.

That trend was documented during a presentation at Tuesday's first symposium session by The BloodHorse MarketWatch managing editor Ian Tapp, who displayed numbers that showed horses went from starting 8.4 races a year in 1983 to 6.6 times in 2013.

Tapp noted that if trainers would return to making the number of starts a year they made in 1983, the current average field size of 7.9 would bounce back to the nine or more starters a race that was the average in 1983. That said, Tapp noted there would be a likelihood that tracks might offer more races under such a scenario, which would reduce the impact of more starts.

More ideas on addressing the issues of smaller foal crops and field sizes will be discussed Dec. 10 as the issue is one of five "tracks" on this year's symposium program, along with "selling racing," "digital racing," "wagering world," and "regulation."

Panza said other ideas for increasing the number of starters per race on a given circuit would include creative efforts with state breeding programs. Panza noted that during the Aqueduct Racetrack meets, 53% of starters are New York-breds; he said such horses typically will race in the state in which they're bred, which can provide boosts to average field sizes.

"We'll have about 1,500 New York-bred races at NYRA tracks this year," Panza said. "Imagine the impact if we could get that to 2,000?"

Panza noted that New York has benefitted from added purse revenue from gaming but suggested other states may look into creating restricted races for a regional circuit, perhaps races for horses bred in Delaware, Maryland, and Pennsylvania.

Hand in hand with that, Panza said more regional cooperation is needed because too many tracks are competing for the same horses. He said perhaps staffs could be consolidated and noted that as the live meets traveled from state to state, each one would become more of an event rather than the grind of racing for four to six months or more at each track.

Some of Panza's ideas are in line with recent plans announced by The Stronach Group in the Mid-Atlantic region. In November, Stronach Group chief operating officer Tim Ritvo said its Maryland Jockey Club plans to reach out to tracks in neighboring states to fashion a schedule that would reduce competition and allow each of the region's tracks to offer larger fields. Field sizes are especially challenging in the Mid-Atlantic region because of its crowded racing schedule.

The opening session included several people defining the problems created by smaller field sizes. Providing a customer's perspective was horseplayer Chris Larmey, who noted that small field sizes discourage wagering from the two styles of bettors he believes account for most of the wagering in the U.S.: the recreational player and the professional player.

Larmey noted that the recreational player enjoys solving puzzles and hopes for a big payout, but reduced field sizes result in a less intriguing race puzzle and decrease the chances of a large payout. For instance, a six-horse field offers 360 superfecta combinations while a 12-horse field would offer 11,880 possibilities. Both the puzzle complexity and potential payouts are reduced.

The smaller field sizes result in smaller wagering pools which are unattractive for professional players. Those reduced fields also make it more difficult for the pros to find the pool inefficiencies for which they are looking to hammer.

Jennifer Owen, a research consultant with Aspire Wealth Management, noted that field-size issues have hit the United Kingdom and the U.S. harder than many other countries. She said some of the ideas expressed by Panza are on the right track for addressing the issues.

Steve Koch, vice president of racing for Woodbine Entertainment Group, did extensive statistical studies on field sizes and determined that each additional horse added to a field does improve handle for that race, all other things being equal. His study found that while each additional horse improves handle, the gain shrinks with each additional horse.

For instance, going from five to six horses provides a 12.5% bump, while going from six to seven horses provides an 11.3% increase. These increases gradually go down, but there is an increase for each horse added.

Koch said if Woodbine could have gone back and moved all of the races in 2012 that had less than eight horses to eight-horse fields, an additional $160 million in handle would have been generated. In 2012, $454 million was wagered on Woodbine races.

Joe Morris, president of the Thoroughbred Owners of California, agreed with Panza when he suggested there could be opportunity for state breeding programs to create more bonuses through increased registration fees.

Panza said the grind-it-out approach of long race meets may have worked when more than 35,000 horses were being bred a year in the early 1990s, but with 21,000 or 22,000 Thoroughbreds being produced annually in recent years, a new approach is needed.

"If we're going to continue to work against each other, we're going to see a lot more of these tracks go out of business," Panza said.