SIC 7948 Racing, Including Track Operation

 
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SIC 7948This classification covers promoters and participants in racing activities, including racetrack operators, operators of racing stables, jockeys, racehorse trainers, and race car owners and operators.NAICS CODE(S)711212Race Tracks711219Other Spectator SportsINDUSTRY SNAPSHOTThe thrill of competition and the overall excitement of racing drew millions of American spectators to the wide variety of events in the racing industry, including horse races, dog races (greyhound), automobile races, and motorcycle races. The industry generated close to $5 billion in revenue in 1995.Thoroughbred horse racing alone attracted 60 million spectators to racetracks in 36 states. On a total of 8,000 racing dates, visitors bet more than $13 billion at the tracks and at off-site locations. In the late 1980s, however, the horse racing industry began to fall behind more publicized and simplistic forms of legalized gambling, particularly the state lotteries. Unprepared for the influx of competition, track operators scrambled to make their courses more inviting to spectators in order to attract new and younger customers.In 2005 there were 4,648 promoters and participants in racing activities, with an estimated workforce of 61,151 people. The industry reported nearly $11 billion in revenues. Organizations such as the American Horse Council viewed horse racing as a vital contributing source to the overall U.S. economic structure. Although casinos were taking away from the bottom line, legislature was beginning surface that would alleviate some of the financial strain.ORGANIZATION AND STRUCTUREHorse RacingIn the horse racing sector of the industry, most U.S. racetracks were privately owned, and racing operations were governed by state commissions where the tracks were located. Most tracks were operated for a profit, as were the horses, while the trainers and jockeys worked as independent contractors. Some U.S. tracks, such as the ones operated by the New York Racing Association, were non-profit organizations. By contrast, racetracks in some other countries were owned and operated by the national government.All horse racing, except quarter horse racing, involved thoroughbreds, usually three-year-olds. A racehorse achieves peak ability at age five, but few races included horses older than four due to increases in purses, breeding fees, and sale prices. Owners of thoroughbreds tried to produce superior horses through complex mating strategies, with the most desirable horse being one that performed well during long races. But as Patrick Cunningham, a professor of animal genetics at Trinity College in Dublin, claimed in Fortune, "only 35 percent of the differences between horses is attributable to genetic factors; the other 65 percent reflects diet, training, and random health-affecting events around the barn."Early horse races featured a simple system of wagering in which spectators tried to pick the winner. In modern horse racing, however, spectators placed their bets on the first three horses, and most of the purse money was provided by the stakes fees of the horse owners. This practice, called pari-mutuel betting, created a common betting pool and paid off numerous winners. Those who wagered on horses finishing in the first three places (win, place, or show) shared the total amount betted, minus a percentage for the track management. Most purses allocated 60 percent to the winner, 20 percent to second place, 10 percent to third place, and 5 percent to fourth place. The system always provided the operator a profit and allowed any number of bettors to win.Racetrack management began to offer pari-mutuel betting with the invention of the totalizator in the 1920s. The totalizator collected all bets and provided an instantaneous picture of the betting pools, displaying the approximate odds to win on each horse. Computerized totalizators at modern tracks flashed these totals to spectators at regular intervals, and also displayed race results, payoff amounts, and running times.Dog RacingThe dog racing sector of the industry consisted of events featuring a group of greyhounds chasing a mechanical rabbit around an enclosed track. Based upon an older sport where dogs hunted by sight rather than scent, the first greyhound race was held in Emeryville, California, in 1919. In U.S. races, eight dogs competed per run, with up to 11 quarter-mile races per program. Similar to horse racing, dog racing in the United States included wagering and was governed by state commissions. The 1990s saw animal rights groups start widespread lobbying efforts to secure homes for retired greyhounds.Car RacingIn the 1900s, many cities and states began banning car...

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