Horse racing in North America persists on the path of downsizing as measured by the number of races held each year, the number of foals born and registered with the Jockey Club, and the amount of dollars wagered.  Making predictions about the future is always perilous but, if the malaise continues, following is what horse racing is apt to look like within another quarter of a century.

Racetracks will hold significantly fewer live races than today but will still be able to offer a full complement of races to bettors from racetracks around the world via simulcasting.  Advance deposit wagering companies will also have a full schedule of races, from early morning until late at night.

By contrast, the breeding side of the North American racing industry will likely see profound changes, for two reasons.

First, stagnation of pari-mutuel revenue and state decoupling of purses from slots revenues will make horse ownership less attractive economically, which will decrease demand for bloodstock.  As a result, there will increasingly be fewer mares bred…until an equilibrium in the foal crop is reached.

Second, the breeding industry will be dramatically transformed in terms of geographical dispersion, with the industry becoming far less centered in greater Lexington, Kentucky and Ocala, Florida.  Anyone who has periodically visited Lexington and Ocala can see that it is only a matter of time until most of the horse farms are lost to urban sprawl.  Lexington is a desirable place to live and do business and Ocala has become a destination for retirees.  A rapidly growing population of people and businesses generally does not bode well for agricultural pursuits, even when some land owners establish conservation easements for their property.

The latest statistics available from the Jockey Club (for 2014) show that 46.7% of all registered Thoroughbred foals were born in Kentucky (36.4%) and Florida (10.3%).  Moreover, the Kentucky and Florida foal crops are concentrated in Lexington and Ocala, respectively.  Five states accounted for 68.9% of the registered foal crop:  Kentucky, Florida, California (8.2%), New York (7.1%), and Louisiana (6.9%).

A streamlined or rationalized breeding industry will gravitate away from the high-land-costs of Lexington and Ocala to more rural venues in Kentucky, Florida, and other states like New York.  As the stallion population is dispersed geographically beyond the bluegrass, the Jockey Club may even allow artificial insemination to mitigate the costs of transporting broodmares.

In order for this scenario to be averted, pari-mutuel wagering would have to be rejuvenated so that horse ownership is more monetarily rewarding and Lexington and Ocala would have to become less attractive venues for individuals and businesses.  Both of these look like longshots.

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