Anyone have a lantern?

While there has been much dialogue concerning the frightening global financial crisis that effects every aspect of life and casts a long and dense shadow over the future of life as we know it in this country, none of it has addressed directly the future of racing in this failing light.

Meanwhile, stark declines in receipts at Saratoga – on track and off -- and Del Mar this past summer followed by heart-stopping double-digit declines at the marathon yearling sale that concludes on Tuesday at Keeneland would suggest that the immediate future of racing is not much more promising than any other enterprise and is perhaps at the threshold of dire times.

While people who are supposed to be paying attention to such things are instead gathered in Las Vegas to discuss marketing the sport to young people, a worthy subject in less troubled times, the stark reality is that young people, interested or not, are in certain danger of finding themselves without the discretionary capital required to play the game.

If the stock market is indicative of the health of the overall gaming business, things look rather bleak. The recent performance of three of the largest publicly traded gaming companies can be taken as a loud warning of what lies ahead.

Wynn Resorts, which has exposure to the fertile Macau market that includes Hong Kong, opened on Tuesday at $89.54 – alarmingly off its 52-week high, $176.14. The Las Vegas Sands Corp., $36.05 at the open, and MGM Mirage, the New York Racing Association’s former partner in the still-awaited Aqueduct casino, $30.30 at the open, trail a furlong behind their 52-week highs, $148.76 and $100.50 respectively.

Whoa!

The two largest publicly traded racetrack stocks, both thinly traded, are faring no better. Magna Entertainment, after a 1-for-20 reverse split undertaken for the purpose of retaining its listing on NASDAQ, opened at $5.89 on Tuesday. Adjusted for the onerous reverse split, its 52-week high is $52.60. Churchill Downs, most of which is closely held by a handful of shareholders and has been embroiled on several fronts in disputes with horsemen on a variety of economic issues, opened at $48.68, off its 52-week high of $57.55.

If industries that rely on discretionary income lag behind a recovery that may be years down the road, the outlook for racing – and the gaming business at large – will be dismal for a very long time. A proactive leadership, if indeed there is such a thing in any area of American business or government, would be at work attempting to mollify the effect of what will be a painful process rather than dealing with the superficial and in the greater current scheme, trite.

The crisis that has brought the American and other economies to a virtual standstill has diverted attention in Washington that may, under better circumstances, have been focused again upon federal regulation of racing. The industry’s leaders would do well to use the time to both address the problems that stimulated federal scrutiny and pool resources in the interest of survival in what promises to be a very hostile and long-lived economic environment. With no light at the end of the tunnel, a lantern would come in handy. --PM