A GROWING THREAT TO THE AMERICAN RACING ENTERPRISE: REAL ESTATE VALUES

If one were to look solely at sales figures from leading Thoroughbred auction houses Keeneland and Fasig-Tipton, the conclusion would be that the American horse racing enterprise is buoyant.  Expand the view to include the retail side of racing and the outlook is cautionary.  While the bloodstock segment of the racing business is indeed healthy, the retail or racetrack segment is imperiled…and a major reason is that real estate values have soared for the land on which most racetracks sit.

A diminishing number of racetracks means, of course, that there will be fewer and fewer places to race horses.  In addition, live racing is how new fans tend to be cultivated. 

The sale of Arlington Park to the Chicago Bears and cessation of racing there leaves the nation’s third-largest city with a single racetrack.  Other racetracks that reside on land more valuable for development than racing encompass, among others, Santa Anita Park, Aqueduct, Gulfstream Park, and Golden Gate.  In Florida, the 2022 closing of Pompano Park leaves harness racing with no presence in the state.  The same fate could happen to Florida’s Thoroughbred tracks, Tampa Bay Downs and Gulfstream Park.

In Great Britain, the Jockey Club owns 15 racecourses, such as prominent tracks like Epsom Downs and Cheltenham.  It also owns 5,000 acres, mostly at Newmarket, that are used for training and racing.  By contrast, the vast majority of the racetracks in the United States are owned by corporations that have little or no connection to the bloodstock side of the racing industry (Keeneland is the obvious exception).  With the approaching sale of Frank Stronach’s breeding operation, Adena Springs, the Stronach Group’s Thoroughbred racetracks–Santa Anita Park, Golden Gate, Gulfstream Park, Laurel Park, and Pimlico—will no longer have a significant family connection to the breeding side of racing.

When older American racetracks were built, they were structured to accommodate the large on-track crowds of the day–long before remote wagering–and were located in areas then untouched by urban sprawl.  Now huge grandstands are largely unneeded and expensive to maintain.  And, with the relentless expansion of cities to the suburbs, tracks are often worth far more for commercial uses and housing than for racetracks.

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