PREAKNESS BUSINESS METRICS

In spite of rainy weather and fog, a reported 134,487 people showed up at Pimlico for the Preakness Stakes, the third largest crowd in the history of the race.  The dilapidated condition of the Pimlico racetrack and the leaky roof during heavy rain makes this turnout a testimonial to the powerful draw of the Preakness.

Betting on the Preakness card was $93.66 million–which was the third best ever—and came notwithstanding the small field sizes, including the eight-entry Preakness with a strong favorite in the mix.  The Preakness itself set a betting record with a handle of $61.97 million, up $600,000 over the previous record set in 2016 and up 2.9% over 2017.

The Preakness is always intriguing if the Kentucky Derby winner is in the field.  People tune in to see if the second jewel of the Triple Crown advances the prospect for a sweep of the three races.  The race had a television rating of 5.5 and a share of 12.  (A show’s rating is the percentage of all possible TV households or viewers in the country and its share is the percentage of households or viewers actually watching TV at the time.)  Thus an estimated 5.5 percent of all television sets in the United States were tuned in to the Preakness.  The race’s share of TV sets that were actually turned on to any program was 12 percent, or one in eight.

With a buoyant U. S. economy and the lowest unemployment rate since 2000, the record-breaking betting trend seen in the Kentucky Derby continued in the Preakness.  With the possibility of a Triple Crown winner in Justify, betting on the Belmont Stakes should set another record, barring an injury that preludes the colt from running or a black-swan national catastrophe.

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THE GREATEST PREAKNESS

The late ABC-TV sports announcer and Thoroughbred-horse owner Jim McKay said the 1989 Preakness was “the best race that I have ever witnessed.”  It certainly was the best and closest Preakness in history.

Although Sunday Silence had beaten favored Easy Goer two weeks before in the Kentucky Derby, by 2 ½ lengths, bettors weren’t convinced and made the Ogden Phipps-owned and Shug McGaughey-trained Easy Goer the favorite in the Preakness rematch.  Sunday Silence was trained by Charlie Whittingham and owned by a partnership of Arthur Hancock III, Ernest Gaillard, and Whittingham.

After 6 furlongs in the Preakness, Easy Goer was a head in front on the rail with Sunday Silence to his outside.  Sunday Silence had run into traffic on the backstretch in the eight-horse field, causing his jockey Pat Valenzuela to check him, but the colt showed his tactical speed and caught up with Pat Day and Easy Goer near the top of the stretch.

Down the stretch the two colts dueled, reminiscent of Affirmed and Alydar in the 1977 Belmont Stakes, with each colt briefly getting the lead.  When they crossed the finish line in tandem, Sunday Silence had prevailed by a nose.  Dave Johnson, calling the race on ABC, said he could not tell who had won but Valenzuela was celebrating by waving his whip.  Pat Day made a claim with the stewards that Sunday Silence had interfered with Easy Goer during the stretch run, but the objection was dismissed.

Easy Goer easily beat Sunday Silence in the Belmont but Sunday Silence bested Easy Goer by a neck in the 1989 Breeders’ Cup Classic.  Sunday Silence was retired and sold to stand at stud in Japan.

On Kentucky Derby day 2018, the 2000 Guineas—the first leg of the English Triple Crown at Newmarket—was won by Saxon Warrior, a Japanese-bred grandson of Sunday Silence.

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Click here to relive the 1989 Preakness.

U. S. SUPREME COURT STRIKES DOWN SPORTS-BETTING BAN

On Monday (May 14, 2018), the U. S. Supreme Court struck down a 1992 federal law (The Professional and Amateur Sports Protection Act) that prohibited states from offering sports betting, with the exceptions of Delaware, Montana, Nevada, and Oregon, which prior to 1992 had laws allowing sports betting.

In 2011, New Jersey voters challenged the 1992 ban by approving sports betting.  The New Jersey law was contested in the federal court system by the NCAA and the four major professional sports leagues.  By contrast, seventeen states supported New Jersey.  The 3rd U. S. Circuit Court of Appeals rejected the New Jersey Law in 2016, but the Supreme Court has now reversed that decision.

The states of Connecticut, Delaware, Pennsylvania, Iowa, New York, Mississippi, and West Virginia have already prepared laws that would legalize sports betting within their borders.  States that are planning to consider legalization include California, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Minnesota, Michigan, Missouri, Oklahoma, Rhode Island, and South Carolina.

This list includes the most prominent horse racing states.  Some of the states have relatively high taxes on residents and corporations and have huge budget issues and looming pension deficits for public employees.  These problems will no doubt be presented to voters and legislators as rationale to pass sports betting measures.

Racetrack companies will seek to offer sports betting whenever possible.  The effects of sports betting on pari-mutuel wagering is unknown because there is so much illegal sports betting going on, it remains to be seen how much legalized sports betting cannibalizes wagering on horse racing.  Racetracks should seize the opportunity to attempt to craft sports-like bets based on horse racing outcomes.  In other words, fixed-odds bets.

The U. S. Congress could endeavor to write a new law prohibiting sports betting in the states.  However, President Donald Trump is on the record in favor of sports betting, so he would be likely to veto such a bill.

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