Q&A With Josh Rubinstein

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Josh Rubinstein

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Del Mar's short fall meet ended this past weekend with a flourish and a blitz of top-class racing that lured quality runners from across the country, as epitomized by Chad Brown's Grade I double courtesy of Domestic Spending (GB) (Kingman {GB}) in the Hollywood Derby and Viadera (GB) (Bated Breath {GB}) in the Matriarch S.

The meet rounded out what has been a challenging year for the track, to say the least, thanks to the extraordinary headwinds from a global pandemic, and the already tough economic environment for California horsemen. But the bare numbers underscore plenty of reasons for optimism.

The five-week fall meet carded 15% more races this year over last–131 races compared to 114 races last year. Total handle hit the $195.9-million mark, which constituted an increase of 32% over last season. The average field size also increased 9.5% over last year–8.1 runners per race compared to 7.4 in 2019.

In terms of equine safety, this has been yet another noteworthy year for the facility, with one racing fatality and two training deaths for the entire year, according to the California Horse Racing Board's (CHRB) Equine Fatalities database.

To discuss both the year just passed and the road ahead, the TDN spoke to Del Mar Thoroughbred Club president, Josh Rubinstein.

TDN: Broadly speaking, what's your main takeaway from the year as a whole?

JR: Well, 2020 has obviously been a very unusual year. Prior to 2020, the industry had been laser focused on equine safety. But due to COVID, safety took on an entirely new path. We knew it would take a very comprehensive plan to keep everyone at the racetrack and the surrounding community safe, and we're fortunate to have a great team here at Del Mar. we've got terrific medical guidance from folks at Scripps [hospital], and we put together a detailed COVID response, protocols and procedures.

We're also very fortunate to get buy-in from industry stakeholders. You can have as good a plan as there is on paper, but if you don't have buy-in, it's not worth a whole lot. The folks who are down at Del Mar every day, taking care of the horses, they took this extremely seriously, followed protocols, followed procedures.

Early on, when COVID hit, we weren't even sure we were going to be able to race this summer. There was obviously a lot of uncertainty. There were closures. So, to have the year we did, both the summer and fall meet, producing some pretty significant increases is pretty remarkable.

Our racing product was excellent. I cannot say enough about the job our racing department, led by Tom Robbins and David Jerkens, did. Those guys are truly miracle workers. And we also got tremendous support from our local horsemen-they really supported us both meets, and it showed.

The Ship & Win [program] this year really helped with the depth of our racing product. We had 182 horses quality for the Ship & Win bonus, 104 in the summer and I believe 78 in the fall. These horses had 285 starts at our two Del Mar meets and most will remain and race in California at other racetracks this and next year. Once again, racing secretary David Jerkins was outstanding communicating to local trainers and owners the benefits of Ship & Win.

Because of COVID and lack of on-track revenues–not being allowed to have people on-site-our strategy, especially for the summer, was to run a maximum number of races over the high-handle weekends. We were running 11 [races] most Saturdays and Sundays, and nine and 10 [races] Friday over the summer.

We increased field size over the summer from 8.0 last year to 8.4, and in the recently concluded fall meet, the field size was 8.1 compared to 7.4 last year. So, really competitive quality racing, and the horseplayers support that.

TDN: The overall handle was certainly impressive, but as we know ADW revenues aren't as lucrative for the horsemen as wagering at brick and mortar venues. How have the ADW numbers you've seen at Del Mar this year broken down into purse generation?

JR: I'll touch on overall handle just for the moment. Given what I said earlier-that we weren't even sure if we'd race this summer and what that would look like–we ended up with the second highest wagering year in Del Mar's history.

Over $662 million was wagered between the summer and fall meet, and that's second only to 2015, when we had 60 race days–40 in the summer and 20 in the fall–and that resulted in $677 million. So, to have those overall results, we were extremely pleased with that.

Overall, total wagering increased 8% during the summer, and that's with 25% fewer race-days [than 2019]. The recently concluded fall-meet, wagering increased 32% [with 15% more races than 2019]. So, again, extremely solid numbers.

You mention ADW-we knew we were going to sink or swim this year with ADW, due to fans not being allowed on site, and very, very limited brick and mortar wagering. ADW was going to carry us or not. What we saw in the summer, in-state ADW was up 130% and out-of-state was up 70%.

But, in looking at the fall, there was some trepidation our end–we didn't know if those numbers would hold. With college football and NFL coming back, would those online players shift to other sports? Fortunately for us, ADW numbers held-in fact, they increased. In-state ADW this fall was up 139% [on 2019], and out-of-state increased 108%.

While we had a really strong racing product, you've got to give some credit to ADWs, like our terrific partner TVG. Folks like TVG, when racing was the only game in town, they picked up new customers, and they did a very good job at retaining those customers with aggressive marketing.

As it relates to purses, ADW generated this year more than 60% of purses. Last year, ADW was responsible for 27% of our purse generation. So, with COVID restrictions, and the loss of nearly all of our high-margin on-track wagering-along with about two-thirds of the California on-track wagering network purse generation-you total that up for Del Mar, and that's $115 million in loss of handle.

But even with that loss of high-margin handle, we were still able to pay out approximately $22.5 million in purses, and that's level with last year. So, to have that $115 million yanked out from under you–and again, that's high-margin on-track handle–to deliver purse generation of right around $22.5 million is significant.

Don't forget, we had the benefit of being able to run most all of our race days. Santa Anita had to close for approximately two months, and we fortunately did not have that. Though we had those three days we had to postpone early in the summer due to some of our jockeys testing positive–although they were asymptomatic–we were able to make up two of those three days later in the summer.

TDN: You say that $22.5 million is a comparable purse payout to last year. Is that with the same number of races?

JR: We're pretty much right in line with the same number of races [413 races in 2020 vs. 411 in 2019].

TDN: It's been another great year for you safety wise. What do you think are the most important lessons you've learned in this sphere?

JR: We're very proud of our safety record–I say 'we,' because it's California. This has been a group effort between the racetrack operators, trainers, vets, everybody associated with the care of the horse, working with our regulator, the CHRB. For Del Mar in 2018 and 2019, we were ranked the safest major racetrack in the country, and our 2020 numbers are continuing that trend.

It's not just us–you look at Santa Anita at what they've done. I applaud them–they've invested like we have in terms of additional oversight, and communicated on a regular basis with the backstretch community. They had a terrific fall meet–zero fatalities racing or training.

We know this has not been easy on the horse men and women of California–they've had to make significant adjustments to training and racing over the last couple of years. But the results speak for themselves–there has definitely been a cultural shift.

What we're also seeing is other states, New York and Kentucky for example, they are adopting, or in the process of adopting, many of the reforms that were put in place in California. The fact that other states are following us I think says a lot about how what we're doing is definitely going in the right direction.

I'd be remiss if I didn't mention Dennis Moore, our director of track maintenance, who probably has the toughest job in the industry. Nobody works harder, cares more than Dennis. It's an art and science, and Dennis does a fabulous job of combining those two things. We're very fortunate to have him on our team.

TDN: I know the vagaries surrounding the coronavirus pandemic make long-term planning a dicey task, but looking forward, how are you aiming to navigate these enormous challenges next year?

JR: Like everyone, we're hopeful a vaccine will soon be widely available, and allow some sense of getting back to normal, including fans attending the races. As we go through the budgeting process, we'll look at multiple operational scenarios as it relates to the facility footprint. Like everybody in the sports and entertainment industry, it's kind of wait and see in terms of a how we're going to be allowed to operate, but we'll adapt to the conditions. Our number one priority will be to maintain the safety of the horses and the safety of the people who care for them.

 

TDN: The possibility of year-round stabling at Del Mar has been recently mooted in some corners. How serious a proposition is that?

JR: Del Mar has been and will continue to be a long-term participant in the California horse racing industry. Del Mar won't be sold or developed like other California racetracks have or may continue to be.

As a testament to Del Mar's long-term equine commitment, over $11 million was invested in an onsite wastewater treatment facility here that will allow for horse activity on the property on a year-round basis. This project will be completed later this month.

The California industry took some criticism for not having a plan post Hollywood Park, and Del Mar is a long-term player in the industry. We believe it's critical to ensure there's sufficient first-rate stabling commensurate with a premier racing circuit. We believe year-round stabling at Del Mar helps to achieve that goal. This is especially the case if we're to attract out-of-state stables to relocate here.

However, to be clear, we don't own the property. And we must get approval from the 22nd District Agricultural Association, our landlord. We continue to have discussions with the 22nd DAA on the benefits of year-round stabling. Also, the substantial feedback we've received from owners and trainers has been that year-round stabling at Del Mar would be welcomed with open arms. We're going to give it our best shot.

TDN: Is there a possible timeframe for that to occur? And what are the main obstacles standing in the way from this materializing?

JR: The first piece was getting the wastewater treatment facility done. That will be completed at the end of this month–operationally, that was critical. We couldn't have addressed year-round training without that piece.

The second is the approval from the Ag' District. The conversations we've been having have been positive. I don't want to put a time-stamp on when we think that will happen, but we will continue to have conversations with them about stabling here.

Assuming we can get the approvals needed, 2022 would seem to be probably the earliest realistic time frame. But again, it's something we're focused on now, and are continuing to have discussions with the entities we need to, to hopefully make it a reality.

TDN: There's a long way to go before next year's Breeders' Cup, which Del Mar of course is scheduled to stage next year. But have you started preparations?

We're very excited to host the Breeders' Cup. The 2017 Breeders' Cup at Del Mar was the most profitable in the event's history. People from all over flock to the Breeders' Cup. Seventy percent of Breeders' Cup attendees were from outside of California, so the economic impact on the local community was about $100 million-hotels, restaurants.

Even though it's a year away, when you walk around town, people ask about the Breeders' Cup, how preparations are going. We have already begun to have planning meetings with the Breeders' Cup team. Fortunately for us, Nov. 5 and 6, 2021, is a ways off, so hopefully that time frame will allow the current environment to change, and allow us to put the event on with a similar footprint that we had in 2017.

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