|TRAC: A United Texas Racing Industry
Today, racing finds itself at a crossroads. In order to map a collective
course, all segments of the Texas racing industry from every horse and
Greyhound breed organization to racetracks and owners themselves came
together in late 2000 to form the Texas Racing Agri-Industry Council (TRAC),
a multi-faceted organization that represents the entire spectrum of the
state's pari-mutuel industry.
One of TRAC's first orders of business was to conduct a comprehensive
economic assessment of the Texas racing industry. To perform the study,
TRAC retained the services of The Perryman Group, a respected leader in
economic analysis and forecasting.
The Perryman Group's expert analysis examined three key areas:
- the current economic impact of the racing industry (including breeding and
training)on overall business activity within the state,
- competitive threats faced by the racing industry, and
- potential market responses.
The study revealed fascinating results that came as a welcome surprise
to even those involved in the racing industry.
"What we've found is that this is a very widespread industry," Perryman
said. "It includes a lot more than just the track operations, the tourists
who visit them and the money they spend in those communities. It also
supports a very large training and breeding activity and the maintenance
of the horses here in Texas, which is a vital part of our agricultural
"You put all that together and it comes out to almost $6 billion a year
in annual spending and 52,000 permanent jobs that exist in Texas because
of racing and associated breeding activities," he noted. "In addition,
the state receives about $160 million a year in tax revenues as a result
of the activities of this industry. The racing industry ranks among the
state's most important recreational endeavors.
"Competitive racing supports track operations, tourism, breeding and
training and associated agricultural production. Its ongoing success is
vital to Texas agriculture and contributes notably to major urban areas
The Perryman Group's report looked specifically at the economic interaction
between racing and the Texas agricultural sector.
"Racing and breeding is very important to Texas agriculture," Perryman
said. "In terms of sheer numbers, it accounts for about $1.1 billion a
year in spending in the agricultural sector, $314 million in personal
income and almost 9,000 jobs, which is about 6.6% of the total agricultural
employment in the state."
Although jobs and spending are important economic elements to take into
consideration, Perryman explained that a vital part of the agriculture
story remains untold.
"Another factor that's important to point out is that most parts of agriculture
tend to fluctuate with commodity prices, with the weather and with numerous
other factors," he said. "Racing is a much more stable component from
year to year, and as such it contributes underlying strength and long-term
stability to agriculture. It acts as a crucial underpinning for the farm
and ranch economy and is essential to ongoing rural growth and prosperity."
The breadth of racing's influence on the Texas economy including tourism,
training, breeding and agri-business is eye-opening, according to Perryman.
"I was surprised," he admitted. "When you consider the $6 billion in
annual spending that racing generates, that's roughly the same level of
economic impact as you have from the entire sport fishing industry in
Texas - all the boats, equipment, supplies and travel associated with
that activity. So with racing, you're talking about a very substantial
part of the Texas economy."
Perryman also discovered that technological advancements and legislative
changes, which are rapidly reshaping society's personal habits, are affecting
the traditional role of racetracks.
"The racing industry is facing substantial competitive threats from numerous
sources," he pointed out. "Internet gaming, which really didn't exist
10 years ago for all practical purposes, is exploding all over the world;
casinos in our own backyard are having a huge impact, and there is a potential
for expanded casino gaming on Indian reservations as well."
The fiscal impact on Texas is stark $1.456 billion in reduced spending,
a cut of $422 million in personal income and 13,050 fewer jobs due to
casinos and internet gaming.
"The losses in the agricultural sector (from internet gaming) include
$99.5 million in total spending and 862 permanent jobs," Perryman warned.
"If internet gaming continues to grow substantially beyond that point,
the losses will be even greater."
New attention is also being paid to expanded gaming on Indian reservations
in Texas, in neighboring states and across the nation. While illegal in
Texas, tribes are currently challenging Texas in court; New Mexico and
Oklahoma already have substantial Indian gaming operations.
"The result is casinos being developed in areas with relatively easy
access to the same customer base as Texas tracks; there is no doubt that
one consequence would be an adverse effect on Texas racing venues," Perryman
said, noting that his analysis estimates the decline in racing activity
will cut Texas economic activity by $562 million, personal income by $163
million, state tax revenue by $17.5 million and 5,039 jobs.
"The detriment to the agricultural sector (from expanded gaming on Indian
reservations) is $80.6 million in total expenditures and 650 permanent
jobs," he said.
The formation of TRAC as the umbrella organization for racing in Texas
should show we're headed in the right direction, said Tommy Azopardi,
executive director for the Texas Horsemen's Partnership.
Azopardi praised The Perryman Group for clearly quantifying the racing
industry's importance to the overall Texas economy.
"Everyone involved in racing today realizes our industry creates jobs,
stimulates business activity and contributes to the overall economic health
of this state," Azopardi said. "At the same time, no one in racing discounts
the hurdles this industry faces. We not only want to continue our role
as a contributor to the economy, we are also asking for a chance to do
even more. A realistic approach is to examine and fully discuss all options.
What works in another state might not work in Texas.
"As the racing industry continues with this self-examination, we ask
the Texas Legislature, state officials, and the general public to keep
an open mind about the future of racing. Texans are known for their can-do
spirit. That spirit created the racing industry in this state, and it
will successfully carry us into the future."