Despite all the excitement surrounding the May 1 Kentucky Derby -- and the unofficial start of the thoroughbred racing season -- the sport is in big financial trouble nationwide.
In New York state, the $2 billion horse racing industry is in free fall and there are growing fears that this summer's season at Saratoga Springs could be canceled altogether.
A Turnaround That Wasn't
Horse racing in New York state has never been an easy ride. The sport has been plagued by scandal, bankruptcies and federal investigations for years. But during the past decade, it seemed like things were turning around.
New York-bred horses like Funny Cide and Tin Cup Chalice were winning big races. Wall Street was booming, which meant more people buying and racing thoroughbreds.
The New York Racing Association -- the nonprofit that runs the state's tracks at Saratoga, Belmont and Aqueduct -- reorganized and cleaned up its act.
But like a gambler's run of good luck, it all came down in a crash.
"You know at this point, there's not a lot to be optimistic about in New York racing," said Jack Knowlton, who runs the stable that trained Funny Cide.
Knowlton loves racing here, he said while standing on Union Street in Saratoga Springs, where the Victorian-style racetrack and gorgeous 19th century mansions are framed by blossoming pear trees. But he said shrinking prize money and a new round of scandals have pushed the sport to the brink.
"A lot of people are reluctant to jump in because they're concerned that maybe there isn't going to be racing. And they're concerned that the purses have gone down, and it's a very cloudy future," he said.
What Went Wrong For New York Horse Racing
First, the state's decade-long effort to build a casino at the Aqueduct track got tangled up in state politics. That meant fewer gambling dollars to pour into prize money at the track.
And yes, there's a new federal investigation under way into that mess.
Saratoga without horse racing is just unbelievable.
Then, New York City's off-track betting parlors went belly up this year, with critics blasting them for mismanagement. The joke in New York is that this is the only state in the country where even the bookies can't turn a profit.
Without that revenue, the state racing association says it could literally run out of cash before this year's summer meet in Saratoga.
Former Saratoga Springs Mayor J. Michael O'Connell turned up for a protest rally outside the track gates that drew more than 200 people.
"I go back to a time when [during] World War II, they closed down for three years," O'Connell said. "But Saratoga without horse racing is just unbelievable."
Thousands of jobs are on the line if the season is canceled -- but so is Saratoga's international reputation as a thoroughbred mecca.
"Saratoga would fall apart," said Molly Gagne, who has run the racetrack's telephone switchboard for a quarter century. "This is the summer place to be because of the track."
The economic pain has already spread well beyond Saratoga's posh neighborhoods and high-end shops.
In The Red
During the good years, the horse-breeding industry here grew dramatically. Scott Van Laer, who owns a stable in Ray Brook, N.Y., spent $100,000s on his latest batch of yearlings. Now he's not sure they'll find buyers.
"It's definitely hurt us. We were very much in the red for 2009. What I need is a good sale horse this year," he said.
Finding buyers willing to bid-up prices on one of his horses won't happen, he says, if there's not a season at Saratoga Springs.
"The question is how many farms are going to be left operational," he said. "Three of the top four breeding farms in the state area already shuttered."
New York's Legislature is considering a $17 million bridge loan that would allow the Saratoga season to go on this summer. If lawmakers approve the deal, opening day is scheduled for July 23.
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