This is Diana Nyad for KCRW, and this is The Score.
The Kentucky Derby runs this Saturday and it's no surprise that the economy foreshadows a toned-down day in blue-grass country. The Derby weekend traditionally pulls in some $120 million in revenue for the Louisville area but the highest predictions for this year's event are to perhaps hit $100 million. Normally a weekend of big-hat dandy parties, some of the biggest, such as the Lexington Derby Ball which raises a yearly donation to the Lexington Cancer Foundation, have been cancelled. A number of companies have also decided not to wine and dine their usual client list this year. Hotel rooms, from deluxe spa suites to roadside motels, are traditionally sold out six to nine months before Derby Day, but as of today most hotels are still standing at a 25% vacancy rate. Also unheard of, you can still get tickets for both tomorrow's Kentucky Oaks and Saturday's Derby.
Even with all the gloom and doom regarding vacant hotels and slow ticket sales, the Derby profits work pretty much as do the Las Vegas casinos. In Vegas, it's easy to come by a comped hotel suite. All you have to do is spend a lot of time throwing your money away at the casino. Same thing at the racetrack. As long as you're betting the horses, losses in retail revenue don't sting quite so much.
The thing is that betting at tracks across the U.S. has been down over the past six months. The “handle”, which is the gambling term for the amount spent on wagers, is in keeping with reports from all other sectors of our current economy. The handle of horse racing is down and the Derby handle, for all its special gala and celebrity factors, will be down as well.
Track experts were hoping this year would echo the times of the Great Depression when Seabiscuit was a beloved national star and people flocked to the races for some momentary relief from their financial woes. That was, of course, before television and computers and our home-theater experience. Actually, it was during the Great Depression that Nevada legalized gambling in general to raise revenue and a Chicago securities analyst invented a way for people to bet on an underdog in sports by establishing a handicapping system. Since then, betting legally on all kinds of sports in the state of Nevada has produced billions of dollars of revenue and there are many who can't understand why sports books are not legalized nationwide.
It's not logical but online sports betting is illegal yet thrives as a booming industry. It showed an increase of 12% in revenues last year, at the zenith of the recession. Comparisons to Prohibition have been made. Gambling on sports is illegal but it's easily done…and done plenty. Those betters are the ones who beg the question: “So, I can bet on horses, especially through off-track betting, anywhere in the United States, but I have to go to Nevada to bet on a football or basketball game?”
America's governments are broke and several state officials are seriously considering opening sports books to salvage their deep recession losses. Delaware's governor has stated that they'd like to start legalized betting on football games as early as this fall. New Jersey goes further. Their long-term vision is turning the Garden State into what they would call Vegas East. In fairly recent, healthier financial times, Vegas sports books have produced yearly sports betting volumes in the neighborhood of $2 billion. Those are are the numbers Vegas East have dancing in their heads. Who knows? The state of Kentucky may soon not have to worry about the Derby handle being down. If Kentucky residents can bet on all kinds of sports, Derby wagers won't have to prop up the state's annual revenues.
This is Diana Nyad for KCRW, and that's The Score.
Banner image: Run for the Roses, 2008