This classification covers promoters and participants in racing activities, including racetrack operators, operators of racing stables, jockeys, racehorse trainers, and race car owners and operators.
711212 (Race Tracks)
711219 (Other Spectator Sports)
The thrill of competition and the overall excitement of racing drew millions of American spectators to the wide variety of events in the racing industry, including horse races, dog races (greyhound), automobile races, and motorcycle races. The industry generated close to $5 billion in revenue in 1995.
Thoroughbred horse racing alone attracted 60 million spectators to racetracks in 36 states. On a total of 8,000 racing dates, visitors bet more than $13 billion at the tracks and at off-site locations. In the late 1980s, however, the horse racing industry began to fall behind more publicized and simplistic forms of legalized gambling, particularly the state lotteries. Unprepared for the influx of competition, track operators scrambled to make their courses more inviting to spectators in order to attract new and younger customers.
Horse Racing. In the horse racing sector of the industry, most U.S. racetracks were privately owned, and racing operations were governed by state commissions where the tracks were located. Most tracks were operated for a profit, as were the horses, while the trainers and jockeys worked as independent contractors. Some U.S. tracks, such as the ones operated by the New York Racing Association, were non-profit organizations. By contrast, racetracks in some other countries were owned and operated by the national government.
All horse racing, except quarter horse racing, involved thoroughbreds, usually three-year-olds. A racehorse achieves peak ability at age five, but few races included horses older than four due to increases in purses, breeding fees, and sale prices. Owners of thoroughbreds tried to produce superior horses through complex mating strategies, with the most desirable horse being one that performed well during long races. But as Patrick Cunningham, a professor of animal genetics at Trinity College in Dublin, claimed in Fortune, "only 35 percent of the differences between horses is attributable to genetic factors; the other 65 percent reflects diet, training, and random health-affecting events around the barn."
Early horse races featured a simple system of wagering in which spectators tried to pick the winner. In modern horse racing, however, spectators placed their bets on the first three horses, and most of the purse money was provided by the stakes fees of the horse owners. This practice, called pari-mutuel betting, created a common betting pool and paid off numerous winners. Those who wagered on horses finishing in the first three places (win, place, or show) shared the total amount betted, minus a percentage for the track management. Most purses allocated 60 percent to the winner, 20 percent to second place, 10 percent to third place, and 5 percent to fourth place. The system always provided the operator a profit and allowed any number of bettors to win.
Racetrack management began to offer pari-mutuel betting with the invention of the totalizator in the 1920s. The totalizator collected all bets and provided an instantaneous picture of the betting pools, displaying the approximate odds to win on each horse. Computerized totalizators at modern tracks flashed these totals to spectators at regular intervals, as well as displayed race results, payoff amounts, and running times.
Dog Racing. The dog racing sector of the industry consisted of events featuring a group of greyhounds chasing a mechanical rabbit around an enclosed track. Based upon an older sport where dogs hunted by sight rather than scent, the first greyhound race was held in Emeryville, California, in 1919. In U.S. races, eight dogs competed per run, with up to 11 quarter-mile races per program. Similar to horse racing, dog racing in the United States included wagering and was governed by state commissions. The 1990s saw animal rights groups start wide spread lobbying efforts to secure homes for retired greyhounds.
Car Racing. In the 1900s, many cities and states began banning car racing on public roads, which led to the advent of closed circuit courses built specifically for the purpose of auto racing. The automobile racing sector of the industry included several different types of events. Stock cars — American production cars with some modifications to their bodies and engines — generally raced on oval tracks with banked corners. Stock car racing was governed by the National Association of Stock Car Auto Racing, or NASCAR. Formula One or Grand Prix cars — open-wheeled, race-prepared cars — competed at a number of tracks and street courses in the United States and around the world. Formula One racing was governed by an international authority. The American version, often called Indy cars, raced on both oval and road courses around the country. Indy car racing was governed by the United States Auto Club (USAC) at the Indianapolis 500 and by Championship Auto Racing Teams (CART) at all other venues. Dragsters — which included a wide variety of cars with significant modifications to their tires and engines — generally raced for a quarter mile in a straight line. Drag racing was governed by the National Hot Rod Association (NHRA). Various other professional and amateur auto racing series existed, including sports cars, dirt-track racers, and go-carts.
The Daytona International Speedway, known as the "World Center of Racing," became one of the best known racetracks in the United States and featured stock car, sports car, and motorcycle events. The track's most popular race, the Daytona 500, began in 1959 and remained the premier event and opening race of the NASCAR Winston Cup Series. The Daytona 500 was started in February of 1959, when prize monies totaled $67,000. By 1999, that figure had jumped to over $3.6 million.
The Indianapolis 500 became the main event of the 12-race USAC drivers' championship. For many years following its inaugural running in 1911, the race took place on a surface of paving brick, which gave rise to the speedway's nickname, "the Brickyard." The modern track, however, featured an all-asphalt surface except for a 36-inch strip of the original brick at the starting line. The 500 was the only annual race at the speedway until 1994, when the first Brickyard 400 race for NASCAR Winston Cup stock cars was held. In 1999, the combined winnings for the Indianapolis 500 was more than $9 million.
Motorcycle Racing. The motorcycle racing sector of the industry included two main types of events, road-bike races and dirt-bike races. In road-bike races, professionals and amateurs rode low, sleek racing motorcycles on asphalt tracks. In dirt bike racing, participants rode all-terrain motorcycles with knobby tires and special shock absorbers on dirt tracks. Street and off road racing has become more and more popular, with regular appearances on the popular sporting television channels such as ESPN and ESPN2.
Horse racing was one of the oldest sports known to mankind. Some of the earliest races, both chariot and bareback, were held at the Olympic Games in Greece from 700 B.C. to 40 B.C.. England's King Charles II, who ruled from 1660 to 1685, inaugurated the first races that offered prizes to winners, which were called the "King's Plates." The original King's Plates were standardized four-mile heat races for six-year-old horses carrying 168 pounds. A horse had to win two heats to be declared the winner. Although heat racing continued in the United States well into the 1860s, dash racing took over in Europe. A dash was any race decided by one heat, regardless of distance.
Thoroughbred breeding began in the 1700s, and all of the 500,000 Thoroughbreds born since that time were said to have descended from the same small group of Arabian and English horses. In fact, Cunningham proved that modern Thoroughbreds drew half of their genes from only ten horses. A famous horse known as the Godolphin Arabian, born about 1725, contributed 14.6 percent of the genes.
In North America, horse racing began in 1665 at Hampton Plains, Long Island. Richard Nicolls, governor of the colony of New York, offered a silver cup as the prize — the first known North American racing trophy. During the modern era, horse racing evolved from an activity to amuse the leisure class into an enormous business providing public entertainment. The three best known American races were the Belmont Stakes, inaugurated in 1867, the Preakness Stakes, first run in 1873, and the Kentucky Derby, which began in 1875; these races together were dubbed the Triple Crown.
Americans began racing automobiles virtually as soon as they were invented in the late 1800s. The first racetracks generally formed either where people gathered to race their cars — like on the flat sand beaches at Daytona — or where manufacturers tested their new products — like the facility in Indianapolis. Speeds increased dramatically over the years, as did the stakes. Prize money for the Indianapolis 500 topped $9 million in 1999, and the race was won by driver Kenny Brack.
While the gambling industry in general soared 67 percent from 1982 to 1988 to reach $253 billion, the annual amount betted on horse racing climbed barely 17 percent during the same period to $13.7 billion a year, according to Business Week. Horse racing faced intense competition from other forms of legalized wagering, including riverboat gambling, casinos, and state lotteries — which alone drained about 11 percent of potential bettors from horse races. Many analysts claimed that racetracks became complacent in their marketing efforts and were unprepared for this new competition. Because illegal horse racing bets are still taken throughout the country, the exact amount of money wagered on such events is hard to pinpoint.
Even off-track betting (OTB) shops presented a threat to the racetracks. Although the tracks received a percentage of OTB commissions, customers watched simulcasts of live races at off-track sites rather than coming to the racetrack. So while total wagering on thoroughbred racing nationwide increased, paid admissions fell. According to Business Week, "From 1986 to 1990, nationwide betting from off-track sites soared 86 percent, to $4.1 billion, while on-track wagering fell 36 percent to $6.1 billion." The drain caused by simulcast races magnified the need for track management to attract new spectators to their venues. By the early 1990s, many tracks began to market themselves more diligently, adding customer relations departments and special services.
However, several industry analysts felt that the horse racing industry suffered from a more fundamental problem: Many Americans simply did not understand the sport. For example, Ken Alhadeff, executive vice-president of Longacres Race Course near Seattle, told Business Week, "Kids grow up with football, but horse racing remains a mystery to most of us. The savior of racing will be our ability to attract new fans by ripping down the intimidation factor." Longacres' attempts to retain spectators included handing out "First Timer's Kits," which explained how to read the Daily Racing Form, and offering a "New Comer's Corner," which taught betting techniques.
Several track operators also began hedging their bets by adding other gambling venues, like video poker machines. Hollywood Park in Los Angeles, for example, opened a card club, and Louisiana Downs planned to run a riverboat casino. Moreover, some racetracks began adding non-racing entertainment, such as restaurants, video arcades, music theaters, and parks.
By the late 1990s, there were finally signs that horse racing was making a comeback. The average purchase price for horses of all ages increased, with an impressive 35 percent increase in the sale price of yearling horses, the most popular age. Television ratings were up as well, thanks in no small part to the near Triple Crown performance of the horse Real Quiet. A strong 1999 season by the horse Charismatic continued this trend. Though the horse racing industry is still not where it once was, it is now making positive strides.
The leading companies in the racing industry included: New York Racing Association, Inc. of Jamaica, New York; Hollywood Park Inc. of Inglewood, California; Anita Operating Company of Arcadia, California; International Speedway Corp. of Daytona Beach, Florida; Los Angeles Turf Club, Inc. of Arcadia, California; and Churchill Downs Inc. of Louisville, Kentucky.
A non-profit organization, the New York Racing Association (NYRA) owned and operated the three largest racetracks in New York — Aqueduct, Belmont Park, and Saratoga. Established in 1955, the NYRA was a non-dividend-paying corporation governed by a board of trustees.
Races at NYRA's tracks brought in the highest on-track attendance and daily wagers throughout the United States. NYRA tracks averaged 9,800 fans per race day, with nearly 130,000 more watching at OTB shops or at inter-track simulcast facilities. Approximately 2.5 million people attended the races at NYRA tracks in 1998. The Saratoga track led the country in on-track attendance. The average amount bet on NYRA races, including OTB wagering, of more than $9 million per day, far exceeds any other racing organization in the United States.
Hollywood Park Inc. was the ninth-largest organization in the racing industry. Accommodating more than 50,000 spectators at facilities that opened in 1938, Hollywood Park was the site of the Breeder's Cup and the Hollywood Gold Cup. After losing $30 million in four years, the shareholders of Hollywood Park elected a new CEO, R. D. Hubbard, in early 1991. As a result, Hollywood Park showed a profit that year and more than tripled its earnings in 1992.
Most recently, the company operated eight riverboat and land-based casinos in the states of Louisiana, Mississippi, and Nevada, as well as the country of Argentina. In 1998, Hollywood Park, Inc. reported $408 million in sales. In 1999, the company sold its namesake, Hollywood Park, to Churchill Downs, Inc.
The labor pool in the horse racing sector of the industry included jockeys, grooms, and exercise riders, along with other skilled and unskilled workers. Approximately 2,800 jockeys were licensed throughout the country, nearly 20 percent of whom were women. Approximately 53,900 horse owners and 4,440 trainers were registered with the national office of the Horsemen's Benevolent and Protective Association (HBPA). The group also posted nearly 5,400 combined owners and trainers.
The number of other workers at U.S. racetracks was difficult to determine because the work was seasonal. Moreover, illegal aliens were often used for labor at the tracks. In fact, in 1985, more than 400 illegal aliens were seized at Southern California tracks. When track management complained that they could not find U.S. citizens willing to perform such work, the U.S. Immigration and Naturalization Service granted H-2 visas that permitted temporary work status for skilled employment. Certification for unskilled workers was declined.
As of 1997, Japan had 40 racetracks, 30 public courses and 10 owned by the Japan Racing Association (JRA). The JRA is the sports governing body in Japan, and is a non-profit organization that operates on a 15 percent share of betting turnover. This organization severely restricts Japan's horse racing industry to outsiders.
As Karen Lowry Miller explained in Business Week, "Only 114 of Japan's 6,000 registered thoroughbreds are foreign-born. Just two annual races, the Japan Cup and the Fuji Stakes, allow foreign horses that have raced before. And just 35 percent of the 6,000 races held by the JRA allow foreign-born horses at all, even if they're trained in Japan." Representatives of both the United States and Great Britain urged Japan to reduce its trade restrictions, especially to lower its barriers against imported racehorses. Since the U.S. industry had declined, foreign markets like Japan became increasingly important. American horse owners were especially interested in the Japanese market because of its bettors. The Japanese eventually conceded to a plan to allow foreign-born horses to run in 65 percent of JRA-sanctioned races by the mid 1990s and to open 15 more events to foreign owners.
Horse racing also became wildly successful in Hong Kong, with an average racing day bringing 50,000 spectators to the tracks. These spectators, along with 1.5 million off-track bettors, wagered $170 million per racing day. And due to its ever-increasing purse size, Hong Kong's races began attracting more international entries.
The United States began moving toward high-tech horse racing in the 1990s. As with simulcasting, these technological advances were expected to bring additional bettors to the racing world, but not necessarily to the tracks. One program was interactive betting, a system used at home via a "black box" cable program. Wagering via telephone also appeared to be destined for the future of racing.
The NYRA set up computerized personal betting accounts for its patrons. Using a special debit card, a user could place a bet at terminals located throughout the track. Money was added or subtracted from the account as the bettor won or lost. The bettor could wager over the phone and even electronically transfer funds from a MasterCard or Visa credit line to their account. Following a test run at Belmont, the system moved into full operation at all three NYRA racecourses in late 1991.
In the automobile racing sector of the industry, research centered around increasing speed and driver safety. Often, technological advances originating in race cars became standard equipment for passenger cars within a few years. Some early examples included four-wheel brakes, turbo charged engines, and aerodynamic designs.
"Champ Brack Earns $1.4 million of Record '500' Purse," 17 December 1999. Available from http://www.indy500.com/press/1999/purse-053199.html .
Cooke, Bill. "Equestrian History and Culture," 1 December 1999. Available from http://www.imh.org/imh/jp/jp3.html .
Daytona International Speedway Information. Daytona, Florida: Daytona International Speedway, March 1994.
Infoseek. "Company Capsule: Hollywood Park, Inc.," 22 November 1999. Available from http://infoseek.go.com/Content?arn=5018&qtHOLLYWOODPARK,INC+colHV&svx=lhscaps .
Nack, William. "On the Money," Sports Illustrated, 28 September 1998, Accessed 17 December 1999. Available from http://www.britannica.com/bcom/magazine/article/print0,5746,49388,00.html .
Wright, John W., ed. The Universal Almanac 1997. Andrews and McNeel, 1997.
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