JAN 15, 2019--A New York Times report on Dec 15, 2018, described McKinsey & Company as the company to hire if the goal is to raise the stature of authoritarian and corrupt governments, autocrats, despots, looters, oligarchs, torturers and abusers of human rights.

McKinsey’s rebuttal the following day was not a denial, but one that said it broke no laws.

There are three big three consulting firms in this space: McKinsey & Co, Bain & Co, and Boston Consulting Group. McKinsey is so good that in 2012 US Republican presidential candidate Mitt Romney, once an owner of Bain, talked of his intention to hire McKinsey to "fix" the American government.

The Jockey Club is well familiar with McKinsey having retained them in 1990 and in May 1991. The company delivered a report entitled, "Building a World Class Drug Detection System for the Racing Industry: A National Strategic Plan."

It is nearly 30 years later and Thoroughbred horseracing is still an industry rife with drugs and animal abuse. As an aside, during this time frame, McKinsey expertise helped turn China’s laggard economy into the second largest in the world.

McKinsey was unable to achieve the level of China’s success for our sport because it cannot change the public’s perception of horseracing. Simply stated, we are our worst enemy.

Horseracing’s reputation is on a collision course with Animal Welfare organizations. Animal welfare is the most popular cause for Americans, according to a Ketchum study released on April 19, 2018.

Ketchum is a global public relations firm headquartered in New York City, and animal welfare has been a top-three concern in each of the three years that Ketchum has conducted its Purpose’s Causes Americans Care About survey. It is again on track to hit the top three on the list for 2019.

Meanwhile, the collective blown mind of all things racing on Twitter last month shattered violently when the three contestants on Jeopardy could not name the 2018 Triple Crown winner.

Newsflash, racing fans, horseracing is not close to being one of the most popular sports in the U.S. In fact, it is not in the top ten. But tennis and golf are.

According to SportsBusiness Journal, not one of 2018’s Top 50 Most Influential People in Sports Business are from the sport of horseracing.

Horseracing is ranked 25th by Ranker.com, nestled between fishing and cycling. I would bet the same Jeopardy contestants know Lance Armstrong and can name one fish.

Even though the public does not know Justify’s name, they know that horses race on drugs. It’s right there in the official program. People do not venerate drugged athletes, apparently including those with four legs.

In the Internet age, when most people read only headlines and pictures, the public has shown neither the time nor inclination to seek out details. And so they hear and read about drugged horses, and see horses that died in a race.

“The solution is to ban Lasix and pre-race NSAIDs, as is the global integrity standard,” said Sid Gustafson, DVM. “Lasix facilitates sophisticated doping schemes.”

The horse Big Mischief broke down approaching the turn in Aqueduct’s fourth race on December 23, 2018, and subsequently was euthanized on the racetrack. Following the death, Gustafson observed, “Lasix continues to work overtime hollowing bone and breaking legs at Aqueduct.”

And even this might not be so bad if horseracing’s image was simple opaque, but it is worse than that. And that is why The Jockey Club hired McKinsey. We are a target rich industry.

I am not an expert in the field of mind shifting, and maybe McKinsey can lighten the conversation of horseracing and animal abuse. Thus far, however, it has failed to do so.

Though the drug problem and animal abuse is obviously very bad for the sport, the feigned efforts of the industry to reign in these problems serve as a distraction from horseracing’s biggest problem; the lack of gambling dollars needed to sustain the sport.

Yes, the numbers were up three percent last year but that hardly makes up for the 20 percent downturn over the past two decades. The sad fact is that it is a small number of big bettors, “whales,” that are keeping the game afloat.

Mainstream bettors, including horseplayers who wager at the track, off-site, or through an ADW, account for about 80 percent of the national handle.

But whales, defined here as players whose annual handle is $1 million or more, account for one out of every five dollars in the betting pools, and that affects all horseplayers.

Whales are the MVPs of the betting game and as such are compensated with a large discount, aka rebates. Rebates for whales can range anywhere from about eight percent to 10 and higher based on that individual or group’s own handle.

These generous rebates allow a million-dollar-a-year player to earn $100,000 annually--if he can manage to break even. Those dollars pay the bills while the whale’s bankroll stay intact, thus incurring even greater costs for the mainstream player.

Between superior (or paid-for) inside information, sophisticated algorithms, and rebates, the everyday player is being priced out of profits even when he wins. Add that to the drug issues, legal and otherwise, and the future doesn’t look very bright.

That is why our leaders are betting on The Horse Racing Integrity Act of 2017 (Barr-Tonko) as a way out of the muck pit. As all know, Barr-Tonko relies on United States Anti-Doping Agency to regulate doping in horseracing. But the USADA is not infallible.

Tomorrow in Part II: Some Ways Cheaters Avoid Detection