Diversification explained with cows pic.twitter.com/zv7qU1OLDBI was reading a little bit about gross horse betting turnover, both in North America and abroad recently, and noticed an interesting article regarding Irish racing.
— zerohedge (@zerohedge) January 20, 2015
"In 2014, the number of horses in training fell by 6.4pc, owners by 6.2pc, entries by 12pc ..."
This is occurring in tandem with increases in prize money: "What was most galling about the 2014 figures is that the contraction at the industry's core continued despite an increase in prize money of 6pc, with another 10pc extra due to be pumped into purses this year on the back of a 25pc increase in Government funding."
In addition to that increase in gross purses, there has also been a decrease in races held: "Despite real activity - including field sizes - plummeting, the number of fixtures has swelled by 16pc since 2004 to 355."
More money to be raced for, more horses earning checks with smaller field size, more government help, but fewer owners.
This has not been noticed on the high end, however: " bloodstock sales, which was up 19pc."
In North America we see similar in horse racing. In fact, almost every time a takeout hike is considered by a horsemen group, it's to somehow "raise purses" because if that happens, all will seemingly go swimmingly by increasing ownership. That doesn't happen.
At the high end things seem fine. With QE number 44 (not sure what number we're on), Apple up a gazillion percent and high end horse buyers heavily invested in the markets, this makes sense. However, the ecosystem can't survive in its present state without the lower ends having some success. You need a secondary market to buy outcasts from the top end, and offer them a chance at profit. That profit is not there.
This is occurring with more and more slots revenue to dozens of "B tracks" both in harness and thoroughbred. It's occurring with more and more government help.
Currently, higher ups policies are very top-end driven - eliminating race day drugs, lasix, diverting more and more purse money to Grade I's and stacking stakes - so one wonders if the middle to low end issues will ever be addressed. However, that day might have to come, because if the low end continues to be hampered, the top end will feel it, sooner or later. It's just math.