Kentucky Derby betting may fall 30 percent as the worst economy in a generation hits Louisville.
With hotel occupancy down 15 percent, the 135th Derby is unlikely to contribute the estimated $70 million to the local economy it usually generates, tourism officials said. Betting on the race, in which I Want Revenge is a 3-1 favorite, may slump by almost a third, Las Vegas oddsmakers said.
“This is a unique circumstance,” said Jim Wood, president and chief executive officer of the Louisville Convention and Visitors Bureau. “Usually we’re filled to the rafters with Derby guests.”
Rising unemployment and job insecurity, a lack of available credit, falling property values and declines in retirement savings and other investments have prompted people to reduce spending. Companies are also paring spending on entertainment.
While high rollers and celebrities at the track’s Millionaire’s Row may still have the wherewithal to place large bets, overall gambling is expected to fall short of the $114.6 million wagered on last year’s Derby, won by Big Brown, said Tony Sinisi, an oddsmaker at Las Vegas Sports Consultants, which advises Nevada sports books on gambling lines. That was a 3.3 percent drop from the record $118.4 million staked in 2006, when Barbaro won.
Dunkirk and Pioneerof the Nile are co-second choices at 4- 1, followed by Friesan Fire at 5-1 during tomorrow’s Derby.
“Off of what we’ve seen with the Super Bowl and some other events like March Madness, we expect wagering to be down in the 20 to 30 percent range,” Sinisi said. “There are fewer disposable betting dollars.”
Triple Crown
The Derby is the first leg of the Triple Crown, which also comprises the Preakness Stakes in Baltimore on May 16 and the Belmont Stakes in New York on June 6.
The recession that started in December 2007 means some event organizers are catering to smaller groups. QuintEvents, whose 1,600 Kentucky Derby packages cost from $249 to $10,999, is dealing with corporate clients who are bringing two to four guests instead of as many as 250.
For some, not even the worst recession in at least 50 years will keep them away from the Kentucky Derby.
“Individuals who can afford it are saying, ‘bad economy be damned, I’m going to make this happen this year,’” Dave Schroeder, managing partner of QuintEvents, said in a telephone interview from the company’s headquarters in Charlotte, North Carolina.
Derby Hats
Those making the trip still plan to look their best by wearing a traditional Kentucky Derby hat. Two weeks before Derby Day, milliner Larry Olliges found he’d been too conservative with his orders for feathers, silk flowers and netting. The president of Dee’s Craft Inc. in Louisville had to “scramble” to get additional supplies.
“We’re going through 11 pounds of feathers valued at more than $50,000 retail, 3,000 yards of netting and ribbon, I couldn’t even tell you,” Olliges said in an interview. “Sales are up by about 20 percent for the month.”
Olliges and his staff will create 1,500 custom hats, in addition to those he’ll sell off-the-shelf, at an average price of $250.
“The Derby is still a huge fashion event,” he said.
Crystal Hats
Luke Song said sales of his chapeaus have doubled this year since Aretha Franklin brought his work to prominence at the inauguration of President Barack Obama. Among his offerings is a hat with Swarovski crystals for as much as $695.
“Kentucky Derby hat sales are up this year,” the owner of Mr. Song Millinery said in an e-mail from his Detroit showroom. “Despite the recession, the interest in hats is up tremendously.”
This year, not even expensive hats will be able to cover up the most challenging economic environment in at least a half century. The U.S. economy, the world’s largest, has shrunk 3.3 percent since peaking in last year’s second quarter, making this the second-worst recession since the Great Depression.
(Source: Bloomberg)
