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 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 industry."

"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 as well."

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."