LOUISVILLE, Ky. — Every morning this week, trainer John Shirreffs has taken Baeza out to the racetrack, preparing as if he would run in Saturday’s Kentucky Derby. But Thursday morning, with fewer than 24 hours until the deadline, Baeza still did not have a spot in the starting gate.
“He’s probably the second-best 3-year-old in America,” said Randy Moss, the NBC analyst and handicapper. “It would be a shame if he were to be excluded from the race.”
For Baeza, all’s well that ends well. The late Thursday afternoon scratch of Rodriguez opened up a spot in the field.
But the reason Shirreffs and Baeza found themselves in this predicament to begin with can be summed up simply: Their home base is Southern California, which used to be arguably the most desirable racing circuit in the country but has now fallen behind states where casino gambling supplements purse money.
So even though the Santa Anita Derby is a Grade 1 race offering a $500,000 purse, only five horses were entered, triggering a new Churchill Downs rule that reduces Derby qualification points for races with small fields. Under normal circumstances, Baeza’s second-place finish to Journalism would have gotten him in the Kentucky Derby field. Instead, this year, Shirreffs brought the horse to Churchill hoping someone would scratch before the Friday morning deadline.
“I can’t really go there,” Shirreffs said Thursday when asked if he thought the point reduction was fair. “We knew going in that the points were being reduced, and I felt we needed to win the race.”
Having a small field for a big race in California is not an outlier these days. The aforementioned Journalism, who will likely be the Derby favorite on Saturday, also had just four opponents on March 1 in the San Felipe Stakes and the Los Alamitos Futurity last December, a race where three of the five horses were trained by Bob Baffert.
The Santa Anita Oaks and Santa Maria Stakes, two premier races for fillies, also had just five entries. The Santa Anita Handicap, a historically important race for older horses, drew only eight this year. The Beholder Mile, a $300,000 Grade 1 race for fillies on grass, had six competitors.
Those are only a few data points, but they all point to something everyone in the industry understands to be true: In the nationwide competition to attract horses, Southern California is falling behind states that have managed to significantly boost purses through ties to other forms of gambling.
“Any time you’ve got a $140,000 maiden race (which are common in states like Kentucky or Arkansas) while you’re running for $100,000 in a graded stakes in California, there’s a huge disconnect there,” said Michael McCarthy, the trainer of Journalism, who bases his operation at Santa Anita. “In California, by and large, the gaming is controlled by the (Native Americans). And I think that’s a huge burden on racing. We just don’t get to share any of those funds.”
That reality for California racing, which is having a direct impact on the Kentucky Derby, is being watched closely on the nation’s other coast.
Gulfstream Park, much like Southern California, has long been a crucial piece of the sport’s economic picture because of its weather and proximity to the huge population centers in Miami and Fort Lauderdale. Though some large stables race at Gulfstream year-round, New York-based trainers like Todd Pletcher will bring a large contingent of horses to Florida for the winter to prepare for races like the Kentucky Derby without having to dodge snowstorms.
Since 2006, Gulfstream has run its racing operation in tandem with a casino on property that offers slot machines and other electronic table games. The gaming license was granted by the state with the help and support of the horse industry, as the deal called for 7.5 percent of the casino revenue to go directly into the purse fund and 0.75 percent into the state’s breeding program.
But in January, a bill supported by the track’s ownership was filed in the Florida state legislature that would remove the requirement for live racing from the law that grants Gulfstream a casino license.
This so-called attempt at “decoupling” is being viewed by horsemen with ties to Florida — and rightly so — as both a knife in the back and an existential threat to racing’s future in the state. In that scenario, if Gulfstream just decided to simply shut the track’s doors, expand its casino and use its valuable property in Hallandale Beach for more profitable commercial ventures, there wouldn’t be anything to stop them.
If it happened, Florida’s most prominent racetrack could end up in a similar situation as Santa Anita — or worse, imperiling an industry that supports an estimated 33,000 jobs in the state and more than $3 billion in economic activity.
“We’re definitely concerned, and we’re definitely confused,” said Bill Mott, the trainer of Derby contender Sovereignty. “The horsemen were probably a big part of the racetrack to be able to get a casino in there, and I think if they’re trying to bail out on us, I don’t think that’s right. And I hope that the people that make the decisions stand up for us a little bit and at least make them run a certain amount of days per year.”
Last week, a version of the decoupling legislation that would allow for a five-year window to phase it in passed the Florida House of Representatives. It has not yet passed the Senate, and may not by the time the legislature’s session is scheduled to end on Friday.
Typically in Florida, if a bill isn’t signed into law by the end of a session, the process would have to start all over the following year. But with the state’s budget not yet complete, the session will go on longer, which means the decoupling fight could continue for a couple more months.
Florida Gov. Ron DeSantis has signaled that he is against decoupling, but it’s unclear whether he would absolutely veto the legislation since the decoupling language is only part of a much broader gaming bill being proposed.
“Horse racing is going to do well over the next five to 10 years in states where the industry has a strong relationship with its legislature, and a legislature that understands the industry’s importance to the economics, traditions and heritage of those states,” said Damon Thayer, a former Kentucky state senator who is now advising a group called the Thoroughbred Racing Initiative that is fighting decoupling in Florida.
“If horse racing is going to continue to be a national sport, Florida is critical to that goal, and I believe that racing in some fashion in South Florida has to continue. Racing has to be alive and vibrant in a number of America’s greatest cities in order for us to be a national sport. That’s where we create new fans.”
The concerns about horse racing’s future in Florida and California have a common denominator: Both Santa Anita and Gulfstream are owned by the Stronach Group, a Canada-based company that at one time owned and operated a dozen other racetracks and has either closed or sold them off one by one. Among those transactions was the transfer of Pimlico, home of the Preakness, to the state of Maryland, which will renovate the track and make it the hub of the state’s racing industry. Stronach’s other Maryland racing asset, Laurel Park, is then expected to close and be redeveloped.
It has led many in the racing industry to conclude that Belinda Stronach, who got control over the company after a messy legal fight with her father that was settled in 2020, simply does not want to be in the horse racing business long-term on either coast.
“The biggest challenge in California is antipathy from Belinda Stronach toward the sport, antipathy from legislators in Sacramento and antipathy from the Native Americans (who control the casino industry),” Thayer said. “I don’t think any of them care about the future of horse racing in California, and if California racing is going to survive and thrive, particularly at Santa Anita, somebody in those groups is going to have to start to care.”
The question, then, is what comes next?
One potential scenario is that decoupling passes in Florida, racing in California continues to wither and the universe of viable racetracks continues to shrink with New York, Kentucky and Arkansas eventually becoming the only major racing circuits with big purses.
Another scenario is even scarier: If Florida decouples, will other states where casino gaming or sports wagering help fund horse racing start to think about following the same model?
As popular as gambling on horse racing is — nationwide handle in April exceeded $873 million, including $104 million at Gulfstream — the numbers are on a downward trajectory year-over-year, and racetracks are quite expensive to operate.
If horse racing is forced to stand completely on its own and compete with other forms of gambling that are growing more pervasive and continually easier to access across the country, it’s just common sense that there will continue to be fewer racetracks and fewer horses to run at them.
That’s why decoupling in Florida is so dangerous, and why a massive effort is being mounted to defeat it.
“Gaming wouldn’t exist in a lot of these states if it weren’t for horse racing,” Thayer said. “And these partnerships work well in a number of states where the racing industry, the state government general funds and gaming companies all prosper due to a partnership. And I’m going to continue to vociferously push back on those who say it’s a subsidy because it’s not.”
Still, the reality of what decoupling might mean has motivated a number of groups to spring into action. Behind the scenes, the thought that Stronach might eventually just pull the plug on Gulfstream Park has brought powerful, wealthy people to the table to at least think about alternatives, including trying to buy the part of the property devoted to horse racing.
Lonny Powell, the CEO and executive vice president of the Florida Thoroughbred Breeders and Owners Assocaition, said a nonprofit subsidiary of their organization holds a permit to build and operate a track in Marion County, near the heart of the state’s breeding industry in Ocala.
“We’ve got to think of all angles, understanding the fact that the Stronach Group does not want to be in racing in the big picture,” Powell said. “So knowing that, we have to prepare for a better model. But at least we have options. We have to think about the future, and we’re very optimistic and bullish on where we can take this industry.”
Though the fact that one of the best California-based Derby hopefuls only got in the race due to the misfortune of another horse isn’t necessarily a straight line to the issues in Florida, it is a canary in the coal mine. What happens when some racetracks are supported by slots and other forms of gaming, while others aren’t?
It’s a pretty simple economics lesson.
“We’re trying to protect the horsemen, to keep racing alive and keep it alive long-term,” said Tom Cannell, president of the Florida Horsemen’s Benevolent and Protective Association. “It’s hard for me to believe that racing in the winter down here would ever cease. But at one time there were three tracks down here. Things change in the world.
‘But you can’t just look at horse racing. You have to look at people who supply the grain, the vets, the farms that develop the horses. If this was a wheel, the spokes go in many directions. I think a lot of folks that aren’t around racing don’t understand the scope of what it does for the state. So we’re going to stay in the fight and hopefully find some way to keep it going for a long time.”