Changes made in 2017 to federal tax withholding and reporting on winning pari-mutuel wagers was expected to boost overall handle figures by promoting more churn through the windows. Higher churn was then expected to boost purses, which are fueled largely from a percentage of wagering.
Expectations came to fruition, with Equibase reporting growth in both United States purses and handle reported for 2018. Wagering increased 3.3% to more than $11.26 billion and purses grew 3.5% to more than $1.11 billion.
Just how deeply were racetracks affected by this growth?
Significantly, according to an annual review of average daily purses compiled per track by BloodHorse MarketWatch. Look for a complete breakdown in the Feb. 16 issue of BloodHorse magazine. In the meantime, MarketWatch wanted to see which of the larger race meets saw the biggest increases in average daily purse between 2017 and 2018.
Our annual purse review includes racetracks that ran at least five live dates and paid gross purses of $100,000 or more. These criteria fit 84 racetracks in 2017, of which 46 (55%) reported an increase in average daily purses compared with 2016. In 2018, 80 racetracks met the criteria and of these 50 (62.5%) reported an increase in average daily purse.
Among racetracks running 50 or more days of live racing, Delta Downs reported the largest increase in average daily purse—a 32% increase to $273,809. Since 2001, Delta Downs has had the benefit of slots machines to enhance purses. The top 10 racetracks by percent increase in average daily purse include only two that do not offer any kind of alternative gambling. Those who reported growth without the benefit of slot machines or card tables are Arlington International Racecourse, up 14%, and Golden Gate Fields, up 7.9%.
Arlington was able to increase its purses in 2018 due to an underpayment in the 2017 purse account and because state lawmakers approved more than $1.6 million for owners awards and stakes races, according to the Illinois Thoroughbred Breeders Fund. Arlington paid an average $239,114 in purses last year, which apparently helped raise field size slightly from 7.23 starters per race to 7.46.
Golden Gate Fields was reportedly able to grow its handle by separating its post times from the biggest races across the country, racing secretary Patrick Mackey told the San Francisco Chronicle last August. With bettors more engaged due to the changes in withholding and some additional help from bad weather and cancellations in the East, Golden Gate was able to increase its out-of-state handle by 48% and bolster its total handle by 18%.
“We had competitive races for leading rider and trainer, and not a lot of races with 1-5 or 2-5 shots winning,” Mackey told the Chronicle. “The days of (trainer) Jerry (Hollendorfer) and (jockey) Russell (Baze) winning every race at 2-5 are gone. It’s a different product where you can find betting value. When you have gamblers behind you, they keep coming back.”