PROFESSIONAL SPORTS-TEAM OWNERS INVOLVED IN HORSE RACING

Forbes magazine recently published the 2019 list ofAmerica’s Richest Sports Team Owners.”  Three have interests in Thoroughbred racing–Dan Gilbert, Gayle Benson and Vincent Viola.

Dan Gilbert, number 10 on the Forbes list and majority owner of the Cleveland Cavaliers of the National Basketball Association, operates Thistledown as part of Jack Casino, and he recently sold Turfway Park to Churchill Downs, Inc. The Cavaliers won the NBA title in 2016.

Gayle Benson, widow of Tom Benson, owns the New Orleans Pelicans of the NBA and the New Orleans Saints of the National Football League. She has an estimated net worth of $3.1 billion and ranks number 32 on the Forbes team-owner wealth list.  Her horses race under GMB Racing. The Saints won the 2010 Super Bowl.

Vincent Viola, number 42 on the list with a net worth of $2.2 billion, owns the Florida Panthers of the National Hockey League and races under the name of St. Elias Stable.  He was part owner of 2017 Kentucky Derby winner Always Dreaming and is a steward of the Jockey Club.

Following are the top-ten team owners ranked by wealth.  No one is remotely close to Steve Ballmer, whose wealth fluctuates greatly with the value of Microsoft stock, the company where he made his fortune.

Rank, Owner, Net worth, Source of Wealth, Team(s)

1. Steve Ballmer: $51.7 billion, Microsoft (Los Angeles Clippers)

2. David Tepper: $12 billion, hedge funds (Carolina Panthers)

3. Philip Anschutz: $11.5 billion, investments (Los Angeles Kings, LA Galaxy)

4. Stanley Kroenke: $9.7 billion, sports, real estate (Los Angeles Rams, Arsenal, Denver Nuggets, Colorado Avalanche, Colorado Rapids)

5. Jerry Jones: $8.6 billion, Dallas Cowboys

6. Micky Arison: $8.1 billion, Carnival Cruises (Miami Heat)

7. Shahid Khan: $7.8 billion, auto parts (Jacksonville Jaguars)

8. Stephen Ross: $7.6 billion, real estate (Miami Dolphins)

9. Robert Kraft: $6.9 billion, New England Patriots, New England Revolution

10. Daniel Gilbert: $6.5 billion, Quicken Loans (Cleveland Cavaliers)

Horse Racing Business 2019

HOW MUCH U. S. EMPLOYMENT/UNEMPLOYMENT AFFECTS U. S. PARI-MUTUEL HANDLE

The U. S. Bureau of Labor Statistics reported that the unemployment rate for September 2019 was 3.5%, which is the best performance in half a century.  Moreover, the unemployment rates for women and minorities are at historic lows and real wages continue to rise for the broad swath of people in the workforce. Adding to this economic brew are low inflation and record high net worth.

What effect does employment/unemployment have on pari-mutuel handle?  Presumably, lower unemployment should have a salutary effect on spending on leisure activities and entertainment such as betting on horse racing.

One would expect an inverse relationship between pari-mutuel wagering and the unemployment rate:  the lower the unemployment rate the higher the pari-mutuel handle.  Stated differently, the correlation should be negative.

To test the correlation between the average annual unemployment rate and annual (non-inflation-adjusted) U.S. pari-mutuel handle, I ran a simple correlation analysis for the years 2000-2018.  The correlation, as supposed, was negative: -0.2522.  However, this is not the best measure because the handle dollars were not adjusted for inflation. 

To illustrate, in 2000 U. S. pari-mutuel handle was just over $14.3 billion and in 2018 it was slightly over $11.3 billion, for a decrease of 21.3%.  But in inflation-adjusted dollars, pari-mutuel handle actually declined from $14.3 billion in 2000 to $7.7 billion in 2018, or by 46.3%.

When I used “real” dollars to calculate the correlation coefficient, the result was -0.2095.

Both -0.2522 and -0.2095 are mild correlations, where the coefficient can range from plus 1 to minus 1. While correlation does not prove causality, one can infer with a high degree of confidence that the U. S. unemployment rate has had only a minor effect on U. S. pari-mutuel handle between 2000 and 2018.

Why so?  The hypothesis (educated guess) here is that the small percentage of professional-like horseplayers who account for the vast majority of pari-mutuel handle are not as affected as the proverbial $2 bettor by prevailing economic conditions.

Copyright © 2019 Horse Racing Business

2019 MELBOURNE CUP

Australia’s Melbourne Cup is held at the Flemington Racecourse in Victoria.  The race was first run in 1861 and became so popular that its raceday has been a public holiday in Victoria since 1877.  The Melbourne Cup is always run on the first Tuesday in November, on the 5th this year, and is the showcase of the Melbourne Cup Carnival.  The Carnival is a combination of racing, fashion, entertainment, and food that begins in 2019 on November 2 and ends on November 9.

The Melbourne Cup is Australia’s premier horse race and the nation’s biggest betting spectacle.  Ever since Vivienne McCredie in 1986 wrote a poem about the Australian people’s fascination with the Melbourne Cup–titled “the Race That Stops a Nation”–the race has been billed as such.  Indeed, when the race’s 3 p.m. post time approaches, much of the population in Australia (as well as New Zealand) stops to watch the race on television, to bet on a favorite or longshot in a large field, or to see how they fared with $2 office sweepstakes tickets on randomly-selected horses. On a per-capita basis, Australians are the world’s most prolific gamblers on sports, horse racing, and various casino games. Melbourne Cup Betting Offers provides attractive choices and convenience.

Flemington Racecourse can accommodate 122,000 spectators.  On-track attendance for Melbourne Cup day in this century has ranged from a low of 83,471 to a record high of 122,736.

The purse for the Melbourne Cup, a handicap, is $8 million, making it the second richest race in Australia, with $4.4 million going to the winner.  (Australia’s most lucrative race is the Everest, worth $14 million and run at Randwick Racecourse in mid-October at 1,200 meters.)

The field for the 3,200m (2 miles) Melbourne Cup is determined by how well horses have done in Group races worldwide of distances of at least 2,400m (1.5 miles).  Twenty-four entrants are selected from hundreds of nominations.  Even now, only weeks before the race, over 60 horses remain in contention to start.

The international character of the Melbourne Cup is demonstrated by past winners, who, in addition to entries from Australia, have come from France, Germany, Japan, and Great Britain.  Last year’s winner, Cross Counter, will return in an attempt to put together back-to-back wins.  The 4-year-old gelding is owned by Sheikh Mohammed of Dubai, racing under the prestigious stable name Godolphin, and is conditioned by Charlie Appleby.  Cross Counter is the first British-trained winner. 

Current betting odds show that the top challengers to Cross Counter are two horses from Great Britain, Marmelo and Mustajeer, and one from Japan, Lys Gracieux.

While the Melbourne Cup is the featured event of the eight-day Carnival, it is by no means the only top-flight race.  To illustrate, the $1 million Group I Kennedy Oaks for 3-year-old fillies on November 7 will attract a talented field competing at 2,500m.

A feat that is unlikely to ever be equaled was achieved by the late trainer Bart Cummings.  Remarkably, his horses won the Melbourne Cup twelve times, with Cumming’s first winner coming in 1965 and his last in 2008.

Copyright © 2019 Horse Racing Business