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Original Issue

An Embarrassment of Riches

Tracks go empty, but check out horse racing's bottom line: It ain't hay

OUTSIDE OF theracing, there was almost nothing pleasant about last weekend's Breeders' Cup atNew Jersey's Monmouth Park. Two days of steady, soaking rain turned horseracing's world championships into a test of endurance for fans and horsemenalike. The turf course was a bog. The main track was muddy slop. And thefacility itself was reduced to a damp, steamy shelter from the elements. But afunny thing happened: People came anyway, 69,584 of them to be exact. And thetotal common-pool handle for the Friday-Saturday event—including money bet bothon-track and from pari-mutuel outlets all over North America—was anot-so-dreary $142,700,099.

There is no sportin America as resilient as thoroughbred racing, an industry that doesn't careabout winning ugly. In the decades since its precasino heyday, racing has oftenseemed to be suffering a slow death, or at least an inexorable slide intoirrelevance. On-track attendance has dwindled, in some places, to almostnothing; television ratings pale in comparison with those of other majorsports, and coverage in local newspapers—most of which don't bother to staffthe thoroughbred beat anymore—has been relegated to the agate-type boxes on theback of the sports page. When racing has managed to produce a true equinestar—Smarty Jones, for example—the fame only throws the obscurity of the restof the game into sharper relief.

But while thesport of kings hasn't maintained the conventional appearances of a robustenterprise, there is one function that it performs extremely well: theproduction of revenue. Events like the Breeders' Cup (which offered $24.1million in purses) and the Triple Crown races pad the bottom line, but the factis that racing does just fine the other 361 days of the year. In 2006 thepari-mutuel handle in North America topped out at $15.6 billion. Because trackskeep between 15% and 25% of every dollar wagered on their races, about $3.1billion of that total is revenue, putting a sport that is supposedly outsidethe mainstream on par with the NBA (which earned $3 billion last season) andabove the NHL ($2.3 billion). "Racing has a unique advantage," saysDavid 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 TVnumbers. Although Saratoga and Del Mar still have no trouble filling seats,racing's audience has, for the most part, gone postmodern: It's been dispersednot by disinterest but by the Internet, simulcasting and telephone-accountwagering outlets, all of which offer hassle-free ways to get a bet down. (Totalhandle by phone and Internet TVG accounts last year was $433 million.) Fans—andhere we mean those whose grasp of the sport goes deeper than the sad saga ofBarbaro—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 muchbetter place than people give it credit for," says Bill Nader, a former NewYork Racing Association executive now with the Hong Kong Jockey Club. "Tocompete with casinos and lotteries, racing adjusted by taking its productdirectly to the customers."

That product isstill worth sampling. On Saturday, with the sun peaking through for the firsttime in two days just before post time, Preakness winner Curlin came flyingdown the homestretch, showing his muddy hooves to Kentucky Derby champ StreetSense 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. Earlierin the day the 2-year-old War Pass blazed to a wire-to-wire win in theBreeders' Cup Juvenile, establishing himself as the early favorite in the 2008Kentucky Derby.

The real problemsin racing these days are similar to those facing just about every majorsport—overexpansion (there are almost more races run in the U.S. than there arehorses available to run them) and the use of performance-enhancing substances(Kentucky stewards slapped trainer Patrick Biancone with a suspension last weekafter 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 beeuthanized. These are daunting issues, but they shouldn't obscure the fact thatthoroughbred 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 thegame.

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