A POTEMKIN VILLAGE AT FASIG-TIPTON?

Prince Potemkin supposedly (it is disputed) had villages of cardboard constructed in the Ukraine and the Crimea in 1787 in preparation for a visit by Catherine II. The phrase “Potemkin Village” came into usage over the years to describe (Dictionary.com) “a pretentiously showy or imposing façade intended to mask or divert attention from an embarrassing or shabby fact or condition.”

Potemkin Village came to mind earlier this week when the results of the first night of the Fasig-Tipton yearling auction was described by the Blood-Horse as “Saratoga Sales Soars During Opening Session.” Similarly, the Thoroughbred Daily News wrote: “Bright Start to F-T Saratoga Sale.”

While no one could have orchestrated this showy sign of strength in bloodstock markets to cover deep problems in the racing industry, the results did convey a Potemkin-like effect, especially when considered in the context of stagnant pari-mutuel wagering trends in North America.

The day after the outstanding opening night sales outcome at Fasig-Tipton, the Blood-Horse issue of August 10, 2013 (available digitally on August 6) had a headline that read:  “Economic Indicators July 2013 compared to July 2012.” The table under the headline showed that pari-mutuel wagering was basically flat, as compared to 2012, for both July 2013 and for the first seven months of 2013 (July showed a slight percentage increase and 2013 has had a slight percentage decrease).

North American pari-mutuel wagering, of course, has been in a long downward spiral.

The big money spent on horses at Fasig-Tipton is both a cause for celebration and a cause for concern. While the bloodstock side of the horse racing industry is showing bullishness, the retail side is struggling mightily just to maintain the status quo. The intoxicating night air and elegant atmosphere in Saratoga Springs at the Fasig-Tipton sales, coupled with the buoyant cash flow, tend to obscure the problems that the vast majority of racetracks are having just staying afloat.

The obvious disconnect between what is happening in racing’s bloodstock segment vis-à-vis its racetrack segment is Potemkin in nature. Take someone unfamiliar with racing to many typical North American racetracks on an August weekday afternoon and ask him to describe what he sees in terms of economic vitality. Take another racing neophyte to the Fasig-Tipton pavilion to watch the bidding on opening night and see how she describes racing’s economic condition. This would likely be a tale of two worlds.

Somewhere in the future these worlds will collide…unless the economic underpinnings of pari-mutuel wagering can be improved. A Potemkin Village can’t stand forever.

Copyright © 2013 Horse Racing Business

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