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Election 2012: Horse Racing Fan’s Guide

Kentucky's signature industry is threatened by apathetic and even hostile politicians.

I rarely step into the political realm on this blog, but with the presidential race already in full-swing, I feel like I must discuss what it means for horse racing – a sport, industry and passion. You may not realize it, but horse racing is inextricably tied to the politics of America.

I don’t have to tell even casual fans that horse racing is a fragmented industry that lacks a central governing body and the uniformity that provides. But why is it (dis)organized in this way?

Because horse racing is a mode for gambling, states decide whether to allow it and how to regulate it. Each state manages its own business its own way –  and that’s where the problems lie.

Racing commissions that create the rules and oversee the participants are created by legislative acts. Racing commission members are either elected or are appointed by governors. Laws that expand gaming, such as to allow slot machines, poker rooms, instant racing, or even exchange wagering, are all enacted by legislatures or voted on by the public.

How many of the people in those state governments are racing fans? How many even realized that horse racing was part of their job duties?

I can imagine the conversation when a horse racing group wants to make a change to a racing law, while at the same time, another group is lobbying for education reform. Which group do you think will get the short end of the stick in this situation?

For example, in Louisiana, a rule change that lowered the testing threshold for Bute, a common anti-inflammatory therapeutic drug, was delayed by the state’s commerce committee. The change was part of new rules developed by the Association of Racing Commissioners International (ARCI), which is the industry group who creates model rules for racing. These, in turn, are adopted by state racing commissions*. The rule change had been fast-tracked so that the state’s graded stakes would not face downgrading by the American Graded Stakes Committee.  The state Horsemen’s Benevolent and Protective Association (HBPA) objected to the fast-tracking and protested the change. The squabble then reached the commerce committee – a group made up of lawyers, real estate developers, and salesmen. How could these folks decide when and how to enforce a rule change that would lower a drug test threshold from 5 mg to 2mg? Would they even know what Bute is? It would sure help if one of those elected officials had some knowledge of horse racing when faced with decisions like this.

So I ask that everyone who is a racing fan, owner, breeder, trainer, bettor or even groom to do your homework. Don’t just vote for a politician who says the “right thing” on TV about abortion or gay marriage. Neither of those issues has any bearing on the sport we love. Make sure that candidate has a record of supporting the issues important to racing in your state.

Still not convinced? In Kentucky, the Horse Capital of the World, anti-racing interests have slowly taken over that state’s legislature. With the downturn in the economy and historic declines in pari-mutuel handle, the signature sport has taken a massive hit. The introduction of casinos in neighboring states has attracted gambling dollars, and horse owners followed to where purses are higher. Allowing casino games at Kentucky race tracks would would boost purses, bolster state breeding programs and even the playing field, securing thousands of jobs. Despite the overwhelming public support for casino gaming in Kentucky, the legislature voted down a measure to allow Kentuckians to vote to allow them. One of the most outspoken opponents of casino gaming in Kentucky is Alice Forgy Kerr, who represents the legislative district encompassing the very heart of horse country – Lexington. How does a person with no regard for her state’s signature product get elected?

Kerr isn’t the only one, and disregard for the racing industry isn’t confined to one party. Please, racing fans, do your homework before you go to the polls this year. Be sure the person you vote for will do what’s right for racing in your state – it is the only way to make meaningful change.

*The Model Rules are used as a template for state racing commissions and may be adopted in full or modified to fit the individual state’s needs. For more info, see ARCI Model Rules.

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Night of the Living Racinos

To me, the scariest thing in horse racing is not breakdowns, synthetic surfaces or Frank Stronach.  The darkest horror in horse racing is that which began with the best of intentions, but like Dr. Frankenstein’s  monster, it has gotten out of control and threatens to destroy the industry it was promised to save —

RACINOS

(cue shrieking)

I came to this conclusion after doing a research project about Penn National Gaming.  The company has grown and flourished despite the economic downturn, and has even begun expansion into Las Vegas, the ultimate gaming market.  However, the company that began as a pari-mutuel horse racing organization has all but forgotten its original mission.  In the company’s 10-k, there are pages about its casinos, but the whole of the racing report is condensed to 2 paragraphs.  As you can imagine, the company is not planning on building a race track on The Strip.

When first pitched to regulators, adding casino games was to be a much-needed injection of cash to struggling racing jurisdictions.  The revenue from slots and other “dummy games” (as my mom calls them) would go into the dwindling purse accounts and help keep the horses from fleeing the poorer states for better racing areas.  With success, the higher purses could even attract better-quality horses to the racino states, or so went the line of thinking.

What actually happened, in many cases, was that racing became the red-headed stepchild to the more profitable slot machines.  The purses grew, yes, but the quality of racing remained the same – $5,000 claimers running for $10,000 purses.  There aren’t any Bafferts or Pletchers sending horses to Penn National.  The track doesn’t even run a graded stakes race.

Earlier this year, scandal hit Penn National when a series of horrific breakdowns caused a jockey strike – some blamed the horses’ controversial owner while the horse owner blamed the condition of the track itself.  This incident did not reflect well on the track by any angle – why would a track allow unscrupulous people to race there?  Why would a place seemingly raking in the dough with its slots be skimping on track safety?

Because racing by itself is not paying the bills.

It costs much more for a track to maintain stabling and the racing surface, and also pay into purses, than it does to purchase & plug in a slot machine.    The slots also generate much more revenue than pari-mutuel handle.  Why invest in a weaker product?  Just get by with what you can get in the starting gate.

Racino states are parasitic.

Nothing illustrates this more vividly than the crisis in Kentucky.  Yes, KENTUCKY, the Horse Capital of the World, is on the brink of losing its signature industry to surrounding states with racinos.  Ohio, Indiana, Pennsylvania, and West Virginia are seeing an influx of former Kentucky-based owners, breeders and trainers due to their slots-fattened purses and state-bred bonuses.  The dummy gamblers have left Kentucky’s beautiful race tracks for riverboat casinos, and the state’s horse industry has cried out to its legislators for an equal footing.  They want slots in Kentucky.

I just can’t stomach the thought of going to Keeneland and having to schlump through a room full of “Wheel of Fortune” and “Lucky 7s” to get to the track.  The two types of gaming are total opposites: dark, artificial, smoke-filled casinos vs. bright, outdoor, scenic racing.

But aside from asthetics, adding casino games does not solve the deeper problem racing faces.

What can be done to boost racing itself, which will increase handle?

I can see a day in the not-too-distant future where some of these racinos will lobby to dump racing completely to focus on the money-making slots and table games.  This worst-case scenario is playing out in Rhode Island, where Twin Rivers Racing and Casino, a greyhound facility, has lobbied the state for permission to discontinue dog racing and become a full-fledged casino.  True, greyhound racing has faced tremendous pressure from animal welfare groups that has shut it down in most other New England states.  But the same forces are working against horse racing as well.  A business that is successful is a lot easier to fight for than one operating with huge losses.

There are a few racinos that have reinvested their windfalls into racing.  Sunland Park in New Mexico hosts the Grade 3 Sunland Park Derby, which Mine That Bird used as a launching pad to his Kentucky Derby victory.  Prairie Meadows in Iowa hosts the Iowa Festival of Racing, with three graded stakes that attracted full fields of competitive, quality horses in 2010.

But these success stories don’t lessen the greater worry about racinos – a quick fix that ignores the core, a beautiful, wonderful game that has much to offer on its own.  In my next entry, I will describe my ideas to boost racing itself and stave off the creeping menace of racinos.

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