Southwest: Gaming Helps LA to Rise to the TOP

There has been a distinct power shift in the Southwest breeding market since the advent of gaming at tracks in the region. Louisiana has risen to the forefront with slot machines helping the state build an incentive program that paid out more than $25 million in 2012. Texas, meanwhile, has no gaming and has seen its foal crop disintegrate over the past decade, from a region-high 2,013 back in 2001, to 679 in the most recent report by The Jockey Club.

In between are programs in Arkansas, Oklahoma, and New Mexico, all of which receive some form of supplements from gaming. Arkansas breeders can shoot for $53,000 maiden special weights at Oaklawn. Oklahoma horsemen compete for record purses at Remington Park. And breeders in New Mexico have a serious new stallion launching his career in the Grade 1 winner and former world-record holder Bob Black Jack.

But the Southwest standard remains Louisiana. The state, based on 2011 figures from The Jockey Club, leads the region in stallions, with 238; in mares bred, with 2,942; and in foals produced, with 1,851. Louisiana’s breeder awards and purse supplements has risen from $2,115,753 in 2001 to a peak of $26,503,915 in 2011, according to figures provided by the Louisiana Thoroughbred Breeders Association.

“We have one of, if not the, strongest programs in the country,” said Roger Heitzmann, secretary-treasurer of the LTBA, “and because of that we’ve had an influx of new stallions, we’ve had better mares entering our program, and therefore, we’re producing better horses.”

Louisiana’s surge started in 2002, when slot machines first came on line at Delta Downs. Louisiana Downs and Evangeline Downs opened on-track casinos in 2003 while Fair Grounds added slots in 2007.

Louisiana was actually the second state in the region to install such gaming. New Mexico first installed slot machines at tracks in 1999. The Arkansas breeding program began benefiting from Instant Racing, a pari-mutuel game at Oaklawn, following its introduction in 2000, but gaming itself did not start in earnest there until 2008. Electronic gaming for Oklahoma’s tracks began at a high level in November 2005, with the opening of the casino at Remington.

“The gaming certainly has helped the money that went into the program,” said Oklahoma horseman C. R. Trout, who bred the Sovereign Award-winning sprinter Hollywood Hit.

“As far as being a breeder, it saved us. It completely saved us,” said Bill McDowell, president of the Arkansas Thoroughbred Breeders’ and Horsemen’s Association.

Arkansas has seen its total incentive awards jump from $435,956 in 2001 to $905,665 last year, according to the ATBHA.

New Mexico, meanwhile, has been able to avoid the higher percentage of foal crop declines being seen on a national level, said Anna Fay Davis, executive director of the New Mexico Horse Breeders Association.

“We haven’t seen the extreme decrease in our breeding program because of the amount of races we have and the purse money we have,” said Davis, whose organization represents both Thoroughbreds and Quarter Horses.

New Mexico’s purses for Thoroughbreds have risen from $13,585,781 in 2001 to $32,387,338 in 2012. Breeder incentive awards have followed suit, with $2,281,143 paid out to Thoroughbreds and Quarter Horses in 2001 and $4,139,638 in 2012. Last year, there were 288 race dates in New Mexico, said Davis.

Heitzmann said the growth of his state’s program is due in large part to the foresight of lawmakers in Louisiana.

“We’re very happy with the way the state has worked with us,” he said. “Any monies that come in through racing, there’s always a trickle-down effect. Breeders have to buy feed, buy fence posts, buy trucks and trailers, and those monies are distributed throughout the state. The economic impact is quite large. In their wisdom, our [lawmakers] did not want to hurt an industry that produces so much revenue for the state of Louisiana.”

Texas for years has been unsuccessfully lobbying to get some sort of legislative support for its breeding and racing programs. Over the past decade, the number of stallions standing in the state has plummeted from 439 to 188 between the years of 2001 and 2011, according to The Jockey Club. The drop in the amount of mares bred is just as sobering, from 3,643 in 2001, to 1,168 in 2011.

The declines are due in large part to horsemen moving their operations to surrounding states for richer purses, wealthier incentive programs, and more racing opportunities. In a recent survey conducted by Texas HORSE, which represents a vast number of equine interests, 50 percent of the 287 breeders, owners, and trainers said that 75 percent or more of their racing is conducted out of state. In addition, 43 percent of respondents indicated they are reducing their investment in Texas racing in 2013.

“This is very clear proof that our Texas racehorse breeders, owners, and trainers are moving their racing operations primarily to the surrounding states of Louisiana, New Mexico, and Oklahoma, where purses and breeders awards are significantly increased by slot machines at the racetracks,” said Dan Fick, executive director of Texas HORSE.

“It’s a business decision,” said Mary Ruyle, executive director of the Texas Thoroughbred Association.

“Back in 2002, we had 223 Thoroughbred race dates and we had an average purse per race of $15,712,” Ruyle said. “Now, in 2012, we have had a 48 percent decline in race dates, to 117 for Thoroughbreds, and an average purse per race of $14,674. In order to keep purses pretty close to where they were back then, we really reduced the number of race dates. I don’t know that that was intentional. The problem is the purse money is just not there.”

Texas in 2001 paid out $30,330,783 in Thoroughbred purses, according to the Texas Racing Commission. Last year, it was about half that amount, $15,543,450. As for the breeding incentive program, awards have fallen from $3,275,158 in 2001 to $1,501,525 last year, according to the TTA.

But there is some hope. Ruyle noted some of the state’s tracks now have “stronger financial partners” with Global Gaming, the owner of Remington, buying Lone Star Park; Penn National Gaming buying into Sam Houston Race Park; and Pinnacle Entertainment buying majority interest in Retama Park. Ruyle also noted that Saddle Brook Park, a yet-to-be constructed track in Amarillo, is now conducting pre-opening simulcasting. And perhaps the best news of all is that a bill was recently filed calling for a referendum on video lottery terminals at horse and dog tracks in Texas.

“We really don’t feel, without legislative help, that we’re going to be able to turn this thing around,” said Ruyle.

Through it all, Texas continues to have a successful yearling market. Last year, the Fasig-Tipton auction at Lone Star averaged $10,177 per lot, while sales in Louisiana saw yearlings average $9,906 and $8,347.

“Our Texas market has been the leader in the Southwest pretty much every sale,” said Tim Boyce, director of sales for Fasig-Tipton Texas. “The average of the Louisiana-breds was higher at my sale, even though the Louisiana-bred average for the first time in seven years was less than the Texas-breds. But it was still higher than any average of any sale in the Southwest.”

Boyce also sees an uptick in averages for Oklahoma-breds at Fasig-Tipton Texas.

“The Oklahoma breeders are somewhat similar to the Texas breeders of old,” he said. “It wasn’t a real strong commercial market. They weren’t breeding for sales, they were breeding to race. I think that commercial market is developing now. People are seeing results. The average for Oklahoma-breds is going up. You’re seeing more sire power being developed there.”

Still, the strongest sellers remain horses coming from the program in Louisiana.

“Louisiana-breds, they’re what everybody’s looking for right now if you’re looking for a particular state-bred,” Boyce said. “Louisiana-breds sell better if they are equal on pedigree, on physical [conformation], and everything else, because the Louisiana-bred has more earning potential.”

Fasig-Tipton Texas summer yearling sale at Lone Star Park

No. offered (% change)  (% change) Total receipts (% change) Average (% change) Median (% change)
2012 155 (-52.2%) 113 (-49.8%) $1,150,000 (-51.9%) $10,177 (-4.2%) $6,000 (+20%)
2011 324 (+0.9%) 225 (+5.1%) $2,391,200 (+0.5%) $10,628 (-4.4%) $5,000 (0%)
2010 321 (+0.6%) 214 (+15.7%) $2,379,400 (+25.9%) $11,119 (+8.9%) $5,000 (0%)


Equine Sales of Louisiana inaugural yearling sale at Copper Crowne

No. offered No. sold Total receipts Average Median
2012 264 152 $1,268,700 $8,347 $4,200


Breeders Sales Company of Louisiana yearling sale at Ike Hamilton Expo Center

No. offered (% change)  (% change) Total receipts (% change) Average (% change) Median (% change)
2012 155 (-24.4%) 113 (-16.3%) $1,119,400 (-24.3%) $9,906 (-9.6%) $4,500 (-4.3%)
2011 205 (-35.5%) 135 (-31.5%) $1,479,400 (-3%) $10,959 (+41.6%) $4,700 (+34.3%)
2010 318 (-17.8%) 197 (-17.6%) $1,525,000 (-22%) $7,741 (-5.3%) $3,500 (-30%)


Breeding: 10-Year Glance


Number of stallions Number of mares bred Foal crop
2011 43 443 256
2006 64 553 303
2001 73 569 312



Number of stallions Number of mares bred Foal crop
2011 238 2,942 1,851
2006 301 3,995 2,360
2001 205 2,221 1,417



Number of stallions Number of mares bred Foal crop
2011 150 1,264 712
2006 196 2,050 1,039
2001 149 1,214 550



Number of stallions Number of mares bred Foal crop
2011 146 1,164 690
2006 220 1,620 926
2001 240 1,955 1,069



Number of stallions Number of mares bred Foal crop
2011 188 1,168 679
2006 353 2,689 1,476
2001 439 3,643 2,013


Source: 2013 Jockey Club Texas State Fact Book. Figures as of Jan. 4, 2013.