Getting back on track: Horse racing scrambling to attract fans, stay relevant

• The glitz and pageantry of the Kentucky Derby hides a stark reality%3A Professional horse racing is facing worrisome trends including fewer fans.
• Turf Paradise in Phoenix and other racetracks must find new ways to entice fans including women and young adults%2C many of whom are intimidated by the complexities of betting.
• Social media offers opportunities to bring in fans who have never been to a track. Horse racing also provides a unique social setting of parties and other diversions.

Don't let the floral hats, the party atmosphere and other trappings of wealth at this year's Kentucky Derby deceive you. These are challenging times for the horse-racing industry.

The number of races, the amount of ­dollars wagered and other key measures have been declining as the thoroughbred-racing business struggles to stay relevant.

This isn't the only sport straining to keep its nose ahead of the pack in a saturated market. But horse racing also must maneuver around casinos and other forms of gambling. And it's trying to arrest a worrisome demographic shift that has thinned the grandstands, particularly of young fans and women.

Arizona is a moderately important market for thoroughbred racing, ranking 21st among the states in both the number of starts and ­earnings. Turf Paradise, a north Phoenix racetrack that can accommodate more than 14,000 fans, is the oldest professional sports franchise in the state and ranks in the top quarter of North American tracks in purse or prize money.

Tucson also has a track, but it's smaller and faces an uncertain future. Owner Pima County for years has sought to close Rillito Park and turn it into a soccer complex, butting heads with local racing enthusiasts. A third ­Arizona track, Yavapai Downs in Prescott Valley, has been closed since 2010.

The challenges facing the industry are national in scope. A McKinsey & Co. study commissioned by the Jockey Club four years ago laid out the key problems, most of which haven't been solved. The report noted a steady decline in race days, starts per horse, number of available horses and dollars wagered amid an inability to attract new spectators.

"Racing is at a critical juncture," said Dan Singer, a McKinsey director.

McKinsey estimated racing was ­losing a net 4 percent of its fan base each year, as longtime fans die or lose ­interest. Among other warnings from the consulting group: One-quarter of tracks might close in coming years and losses for horse owners could widen. The yearly cost to maintain a thoroughbred can exceed the purchase price of a new car.

The study identified key reasons for the decline, of which gambling ­competition presents a major challenge. Tracks, which once were the only game in town, now vie against casinos and other forms of gambling in Arizona and 38 other states, according to the American ­Gaming Association.

"The sport has just so much to ­compete with," said Boris Morew, a 57-year-old fan in Anthem.

Even Churchill Downs Inc., the company that puts on the Kentucky Derby, now generates more revenue from its string of casinos than from racing at its tracks.

Roughly a dozen states allow casino games at racetracks, which are called racinos. Vincent Francia, general manager of Turf Paradise, indicated he would like to see that format come to ­Arizona but said it would require a new agreement between the state and Native American tribes. Still, Francia ­described nearby casinos as an opportunity as well as a threat. "To me, competition is healthy," he said. "It makes you better."

A sport for others

McKinsey's researchers found that racing suffers from negative perceptions and confusion. Complicated racing forms and obtuse terminology frustrate potential new fans, some of whom feel embarrassed and intimidated in the presence of experienced bettors.

Middle-class people occasionally do reach the winner's circle. But racing isn't known as the "sport of kings" for nothing. Owners are perceived to be wealthy patriarchs who share little in common with the general public. "The report indicated that the sport needs to do more outreach to the mainstream," said Jason Wilson, vice president of business development for the Jockey Club, a century-old advocacy group for the ­industry in New York.

Morew senses a lot of potential fans can't afford to wager much. "There are those who have the money to dress up and go to the track, but there aren't enough of them," he said.

Yet this creates a dilemma for race courses that need to keep bringing in revenue so they can upgrade facilities. "A lot of tracks are run-down," Morew said.

Respondents told McKinsey that they find many tracks to be out of date and in poor condition, with dirty bathrooms and run-of-the-mill food. Another problem was what McKinsey called "dilution" of the best races, with horses running less often, fewer contestants per race (which lowers the "handle" or pooled amount wagered) and schedules that overlap, making it hard for serious fans to follow multiple races on simulcasts.

"The more you move those races away from each other by even five or 10 minutes, the more people can bet on both," said Wilson.

Race quality also is affected by the number of horses that compete — and this is another problem for the industry. The "foal crop" plunged in the recession and hasn't recovered. Turf Paradise hasn't been impacted as much as some tracks because it receives horses from around North America, thanks partly to favorable winter weather here. Francia credits Canadian horse owners and fans for helping to support the track in recent years.

The McKinsey study also cited rising public concern over animal welfare. ­Almost four in five racing fans said they would stop betting if they knew horses weren't treated well, according to a Jockey Club survey.

Investing in amenities

As with decked-out football and basketball stadiums, racetracks need to put money into new suites, better lounges, upgraded food menus and more.

Turf Paradise, which turns 60 next year, has been investing in infrastructure. "Like anything turning 60, you have some aches and pains," Francia said. "We're always doing improvements and renovations." He said recent upgrades for the track include lounges with ­private TV monitors and a sports-bar feel, plus two trackside bars that have become popular places to hang out.

The number of nationally televised horse races has dropped by three-quarters over the past decade. The other mainstream sports have largely filled the void, though sometimes struggling with their own viewership issues.

McKinsey challenged the thoroughbred industry to innovate. Recommendations ranged from new types of bets (such as "favorite versus the field") to improved TV coverage and more ­interesting track events.

Francia said Turf Paradise's promotions include Fiesta Sundays and ­"wiener dog" races featuring dachshunds and other miniature canines. "One thing about race fans is that they all were brought to the track by someone, that first time," he said. "Our goal is to just get them through the door."

Sal Lopez, a 62-year-old Phoenix resident, likes horses and racing after growing up on a farm in Mexico. He often visits Turf Paradise on Fiesta Sundays for the Latin music, food and quarter-horse races.

Many people told McKinsey's ­researchers that they enjoy the sense of camaraderie at the track, the perceived respect from other people when on a hot streak and the chance to win big money. Also, fans aren't tied to a seat. They can walk around, watch the horses get saddled up and partake of other diversions.

Attracting more women

The lifestyle aspect might be an inroad to attracting more female fans. Racing's premier events, especially the Kentucky Derby, remain highly popular. In fact, the annual race at Churchill Downs, with its ornate hats and fashion displays, is the only major sporting event watched by more women than men, said Stephen Panus, a vice president at the Jockey Club.

The connection between horse racing and women is a curious one. It would seem to be a good fit, as many women grow up with a fondness for horses.

"What brought me into racing was my love of horses," said Valorie Lund, a trainer who works at Turf Paradise.

Stacy Campo, another trainer and owner, said her passion for horses makes the long hours worth it. She rises each day around 3:40 a.m. and starts by feeding the animals at her family farm in Waddell, in the West Valley. She then heads to Turf Paradise to work with the animals and meet with owners who might need her assistance, also hoping to court their business. .

"I leave the track around 5 p.m., then go home and usually pass out," quipped Campo, who began riding at age 3. "But I couldn't imagine waking up and not ­being here."

Turf Paradise hosts an annual "Wine, Women and Horses" event that raises money for charity while featuring fun and informative activities — from a hat contest to instructors who teach women how to place bets. This year's event in March was sold out, attracting nearly 500 attendees.

Courting younger fans

The lack of young followers is another challenge.

Lisa Rufer, a 26-year-old visiting from Wisconsin, might have been the youngest fan at Turf Paradise one day this week. She was at the track with her husband, Derek, and his grandparents. While considering herself a novice, she said she felt comfortable enough to bet on her own.

Rufer senses racing suffers from perception issues. "I think people feel it's more expensive than it is."

Panus cited DerbyJackpot.com as an example of a social-media website that's introducing new fans to the sport, including younger ones. The site allows adults 18 and up to make real-money bets on live races, with the ability to chat with other participants. The terminology is simplified to appeal to novices.

Gamification also could help appeal to younger fans. Game activities offered on various other websites include raising horses virtually, training them and racing them on world-famous courses.

Francia said Turf Paradise's attendance has been helped by social-media commentary. "We're succeeding in reaching new fans," he said. "Arizona is a very healthy market for racing."

Turf Paradise attracted about 280,000 fans for live racing last year. Simulcasts on days when there were no live races pushed attendance above 313,000, and another 555,000 or so fans watched and wagered on Turf Paradise races from off-track locations around Arizona. The latest Turf Paradise attendance figures mark gradual increases from prior years, the company said.

Progress report

The McKinsey report also recommended that tracks consider running fewer races so they can offer better-quality contests with more horses in the field — which tends to boost wagering. It suggested that the industry simplify wagering to reduce the intimidation factor for novices.

McKinsey also emphasized TV coverage — not just getting more exposure for races but doing so with better camera angles, computer animation and more celebrities in the stands, with more everyday fans on camera, too.

Wilson said it's too early to tell if the industry has turned a corner, though he said signs of progress include more social-media traffic. "Anecdotally, we believe we are moving the needle, getting more people into the sport, including younger fans," he said.

Reach the reporter at 602-444-8616.

Turf Paradise event

Phoenix's home for thoroughbred racing will host the largest Kentucky Derby party in the state. Turf Paradise expects 8,000 people for live local racing and a simulcast of the big race in Louisville. There's also a fashion contest, diversions for kids and free Derby drinking glasses to the first 4,000 paid admissions.

The track at 19th Avenue and Bell Road touts itself as the only place in Arizona where you can wager on the Derby while enjoying live horse racing. Grandstand admission starts at $5 (free for youths 16 and under). Gates open at 7:15 am, with the first live race at 11:30 a.m. and the Derby starting around 3:24 p.m. Arizona time.

Go to www.turfparadise.com/kentucky-derby-party.html for more information.

Slow out of the gate

The past decade has been marked by fewer thoroughbred races, stagnant purses or prizes and a sizable drop in money wagered in on- and off-track betting, which is expressed as the pari-mutuel handle.

Source: The Jockey Club

Busiest racetracks

Here's how Turf Paradise compares with the top horse-racing venues in North America, ranked by annual purse or prize money.

Source: The Jockey Club, Turf Paradise