Archives for December 2017

This time of year is slow in terms of horse-racing news and upcoming big races.  So, with the breeding season only two months away, it is a good time to interject some debatable subjects.

Here’s one:

Who will turn out to be the more successful stallion, American Pharoah or Arrogate?

Both of these horses were sensational racehorses, with American Pharoah winning the American Triple Crown and Arrogate running races with speed and fortitude, such as his overcoming a terrible start in the 2017 Dubai World Cup, and becoming the top-earning racehorse of all time.

My personal view is that while American Pharoah was more consistently at the top of his game than Arrogate, who tailed off badly at the end of his career, Arrogate on his best day would have outrun American Pharoah on his best day.  Bob Baffert, who trained both horses, appears to have the same opinion:  after the Dubai World Cup he said that Arrogate was the best racehorse since Secretariat.

In terms of potential to sire racehorses, the stud-fee market favors American Pharoah.  His initial fee was $200,000 versus $75,000 for Arrogate.  However, Blood-Horse reported: “The 2015 Triple Crown winner, American Pharoah entered stud with a published fee of $200,000, though many breeders disclosed later in the year they had been offered two-for-one deals at that price.”  In 2018, American Pharoah’s stud fee likely has been reduced as it is listed as “private.”

Both horses initially are attracting a gifted book of mares.  As time goes by and their get reach the racetrack, Arrogate or American Pharoah will prove to be better than the other.  My guess is that Arrogate will best American Pharoah.  His dam’s family includes the Grade I winner Meadow Star, whereas American Pharoah’s dam’s family is pedestrian.

Whether American Pharoah and Arrogate go down as highly successful sires is far from a certainty, as there is a long history of great racehorses like Citation disappointing at stud.

Copyright © 2017 Horse Racing Business

The 1992 U. S. Professional and Amateur Sports Protection Act prohibited sports betting in all but four states that already permitted the practice—Delaware, Montana, Nevada, and Oregon.  Today, the U.S. Supreme Court heard arguments from New Jersey to overturn the law and enable states to institute sports betting.  The challenge proffered is that the 1992 law is unconstitutional and infringes on states’ rights.

MLB, the NCAA, the NBA, the NFL, and the NHL are opposing New Jersey’s efforts and have sued to prevent New Jersey from proceeding with sports betting.  By contrast, eighteen state attorney generals and three governors are supporting New Jersey and five states have already passed legislation legalizing sports betting and another six or so states are considering taking the same step.

If the Supreme Court in June 2018 strikes down the 1992 law, racetracks in states permitting sports betting should benefit in that they will likely be sports-betting sites.  However, the effect on pari-mutuel wagering on horse racing in the aggregate is problematic.

An argument can be made that illegal sports betting is already rampant, with bets being made via bookies, offshore websites, and office pools, so that legalizing the activity will only bring it into the open and produce tax revenues for states.  However, legalization may greatly increase the dollar amount of sports betting as new players decide to participate.

If sports betting is legalized in more states, the question for horse racing is to what extent its current players, overall, will treat horse-race betting and sports betting as substitute products.  If they are treated as substitutes, pari-mutuel wagering will almost surely be eroded.  On the other hand, sports betting could bring new customers to racetracks, and that could lead to additional pari-mutuel players.

If I had to guess, without sufficient empirical evidence, I would speculate that pari-mutuel wagering will not be advantaged by legalized sports betting, primarily because most people who know a lot about the intricacies of betting against a line do not know much about the esoteria of handicapping horse races.  Yet horse handicappers can easily understand how to wager against a betting line.  Moreover, the house cut of sports bets is considerably less than the takeout on horse wagers.

The most proactive step that horse racing can take is to begin to develop horse-racing bets that emulate to a large degree betting on, say, an NFL game.  Whether that is feasible or not is an open question.

Copyright © 2017 Horse Racing Business