During his keynote address at the 37th annual Symposium on Racing and Gaming on Dec. 7, Churchill Downs Inc. president Robert Evans stressed repeatedly that the long-term economic scenarios he was discussing with regard to the Thoroughbred racing industry were purely hypothetical.
While Evans was merely laying out a solution to what he termed a "math problem," some racetrack operators warn that the concepts he brought up could become reality if certain factors don't turn around.
One of the issues Evans touched on during his speech was an economic model of what the racing industry could look like in 2020 with tracks earning a 5 percent pre-tax return on their investment capital.
Included in that model was the idea that the number of tracks would drop from 55 to 26. Although Evans reiterated that cutting tracks was not something he was calling for, the ongoing declines in handle and the struggle to fill fields could force some operations to go by the wayside if more isn't done to make tracks profitable again.
"My interpretation of what Bob was saying was, I think he was suggesting that market forces were going to necessitate that kind of climate," said Bob Elliston, president of Turfway Park. "It wasn't going to be like any state was going to go in and eliminate tracks or take away dates, it was simple market forces, the laws of supply of demand, were going to force it. So I don't necessarily disagree with him.
"Something we're looking at in terms of organizing our schedule is the number of race dates we have and the quality of our product," Elliston said. "We have good field sizes, but our purse structure, because we're having to compete with states that supplement their purses, isn't where we'd like it to be. But we're doing everything we can to be one of the 26 that endures, not one of the 29 that no longer exists."
During the same presentation in which Evans laid out what could befall racing if it doesn't fix some of its pressing problems, he cited improved technology and the strong handle that continues to be produced from the sport's top-quality races as reasons why he is optimistic about the future.
No growth is going to occur, however, unless racing finds a way to better serve its customers and give its participants reasons to stay in the sport, he said. How racing achieves that is up for debate, but most agree it won't happen unless industry leaders like Evans keep trying to come up with solutions.
"I don't want to sugarcoat the future because the industry has challenges. But I also don't want to be overly pessimistic," said Keeneland president Nick Nicholson. "There is a lot of work to be done, but I can see there is a future ... and that was sort of my take on Bob.
"I was glad to hear his long-term commitment to the sport, I was glad to hear a tone of optimism in that there is a long-term business plan that makes sense. Whether or not the numbers end up being exactly what he says is irrelevant at this stage. It will be what it is. What we're going to do is work hard to make it all be as good as it can be, and we'll see what happens."