By T. D. Thornton
For the second consecutive year, overall wagering on Thoroughbred races in the United States edged slightly upward, even though total purses, race days, the number of races, horse starts, and average field size all declined in 2016 compared to 2015.
In addition to total wagering on U.S. races rising from $10.672 billion in 2015 to $10.735 billion in 2016 (+0.58%), the year-end “Thoroughbred Racing Economic Indicators” report generated by Equibase showed increases in two other categories: Average wagering per race day increased to $2.299 million (+2.42%), and average purses per race day rose to $232,114 (+.9%).
For the eight years prior to 2016, the overall betting handle in the U.S. trended as follows: 2015 (+1.18%); 2014 (-2.84%); 2013 (+0.06%); 2012 (+0.96%); 2011 (-5.65%); 2010 (-7.33%); 2009 (-9.88%); 2008 (-7.16%).
“The 2016 wagering and purse report suggests that Thoroughbred racing in the U.S. has stabilized from the world-wide economic recession of a few years back,” said Alex Waldrop, president and chief executive officer of the National Thoroughbred Racing Association (NTRA). “A declining foal crop has challenged the industry to adapt by reducing races and race days and also encouraged innovation. It is noteworthy that handle increased in 2016 despite 85 fewer race days.”
The details for the categories that declined in 2016 are as follows: Total purses $1.083 billion (-0.91%); race days 4,669 (-1.79%); races 38,284 (-1.69%); starts 298,784 (-2.29%); average field size 7.80 (-0.61%).
December, traditionally a slow month for betting business, generated an overall handle increase (+3.27%) compared to December 2015. Yet the fourth quarter of 2016 declined in terms of overall betting (-1.18%) compared to the same period in 2015.
Proposed major changes in the ways pari-mutuel winnings are interpreted, calculated, and taxed by the U.S. Department of the Treasury and the Internal Revenue Service (IRS) could be on the books by as early as April, fueling widespread industry speculation that the new regulations will spark even larger handle increases.
“One additional piece of positive news for the industry is the Dec. 29 release by the Treasury Department and the IRS of proposed regulations that will fundamentally alter the way winning pari-mutuel wagers are withheld and reported,” Waldrop said. “By modernizing tax withholding and reporting to reflect the true cost of a wager, especially exotic wagers, more money will now remain in the hands of our customers who will re-bet most of those dollars for the benefit of all. It’s an important fix that the NTRA has spent years advocating for and will have a positive impact on overall pari-mutuel handle from the moment it’s implemented.” @thorntontd