The regional economic impact of thoroughbred racing fell about 9 percent in the past five years but is still a huge financial engine for the area, officials said Tuesday after releasing a new analysis.
Saratoga Race Course, visitors and those with business at the track contribute between $186 million and $212.8 million directly and indirectly to the economy in a nine-county region, according to the economic study commissioned by the Saratoga County Industrial Development Agency.
The Saratoga County IDA completed a similar study in 2006 and wanted to update it to send current figures to state legislators and others, said IDA chairman Raymond Callanan.
“We’re going to supply it to all the business leaders,” he said. “Hopefully it will be a tool for the use of our legislative leaders in Albany.”
Last spring the IDA authorized HR&A Advisors of New York City to crunch the numbers after several tense racing seasons led in 2010 to the New York Racing Association nearly running out of funds.
The study focuses on the financial output from race course operations; from stakeholders such as owners, breeders and trainers; and from visitors’ spending off the track. It also examines how many jobs are created from the spending and the amount of taxes that local government and the state draw from the race track.
Last year, as NYRA’s financial shortfall resulted in fears that Saratoga Race Course could close, officials tried to paint a picture of how the entire region would suffer without the track. The nine counties studied in the analysis are Saratoga, Schenectady, Albany, Montgomery, Columbia, Greene, Rensselaer, Warren and Washington.
“If you talk to most people in the industry, they were on pins and needles,” said IDA member Rodney Sutton.
With video lottery terminals now in place at Aqueduct and other tracks around the nation, the racing industry seems to be in the clear, and IDA officials hope the study will help keep it that way.
“I think the future is very, very bright for our industry,” said Lawrence Benton, CEO of the IDA.
Purses — the funds paid out to winners — are expected to rise 30 percent with the expected VLT revenue infusion, which would lead to more horses running in each race and a corresponding increase in dollars bet.
Breeding, which also has suffered in recent years, appears to be on the rise, Sutton said, noting that there was an increase in New York-breds for sale at the Fasig-Tipton auction in August.
IDA members were pleased with the updated figures, saying they seem strong despite the recent recession and overall declining attendance at Saratoga and other race tracks.
“If attendance is down, then the overall numbers are going to be lower,” Benton said.
Five years ago, the total economic impact was estimated at between $204.3 million and $234.6 million (adjusted to 2010 dollar values), and the new figures are about a 9 percent drop from those numbers, logged in what officials said was a heyday of the industry.
IDA members hope the study will remind state officials how important racing is.
“GlobalFoundries is not the only show in town,” Sutton said.
And thoroughbred racing affects the entire region, not just Saratoga Springs and Saratoga County, although, Callanan said, “Everybody thinks of racing [and] they think of Saratoga Springs.”
According to the study, the race course supports the equivalent of between 1,840 and 2,070 full-time jobs, both directly and indirectly. Tax revenue contributes between $4.5 million and $5.5 million to Saratoga County and between $8.1 million and $9.1 million to New York state, including property, sales, lodging and admissions taxes, as well as off-track betting surcharges and NYRA payments to the state.
The so-called bed tax, a 5 percent tax on hotel occupancy in Saratoga Springs, has been especially significant, raising $2.2 million a year, Benton said. Half of that revenue comes in during racing season.
“If we didn’t have the race course, there’s no way this bed tax would raise that kind of money,” he said.
To respond to the demand, hotels also have pumped money into the local economy, investing $40 million in new hotel rooms in the past five years regionwide, according to the study.
Those with a stake in the horse industry — jockeys, horse owners and trainers, among others — support the economy in many ways, including by owning property. In Saratoga Springs alone, these stakeholders own $107 million worth of property, Benton said.
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