Monday, April 28, 2014

As Derby Week Begins, Racing at the Crossroads

SARATOGA SPRINGS, NY, April 28, 2014—From the backside to the executive offices to the press box, the racing community often laments the lack of meaningful media coverage of the sport.

The biggest stories are usually the saddest, the most embarrassing: the Fix Six scandal, the animal cruelty of Ernie Paragallo, the Barbaro and Eight Belles tragedies, the sudden equine death syndrome mystery and, most recently, the PETA/Asmussen tapes.

In the case of the latter, outside events unwittingly took some of the heat off racing created by the undercover sting operation. The NCAA Tournament was in high gear when the story broke. No foul, no harm.

But now, with Derby Week upon us, the sports world is mired in a new obsession; the hideous, hurtful Donald Sterling tapes. However, don’t expect the fallout from the “scandalous” PETA video to disappear anytime soon.

It’s Monday and the Asmussen story already has been dredged up by the New York Daily News, Newsday and a Lexington, KY-based business website.

But whatever coverage this story gets the rest of this week, it will pale in comparison to what will be learned by the general public during the highly rated network broadcast of Saturday’s Kentucky Derby.

If Bob Costas hosts the event again this year, the medication issue certainly will be covered for the weighty matter that it is. Or the topic might be explored by new hire Josh Elliott, former “Good Morning America” news anchor with an ESPN pedigree.

NBC Sports indicated in a press release when Elliott was hired that horse racing would be one of his assignments.

Given anticipated concerns from the industry, whatever the network decides to do, or not do, it would be good if some leading racing organization made a meaningful announcement this week. That message can come in one of two forms:

In what horsemen’s groups hope will be a preemptive strike is an announcement that an accord has been reached among all major racing jurisdictions to adopt the National Uniform Medication Program, based on the Association of Racing Commissioners International’s model rules.

The RCI program would be a very good start, leveling the playing field on the use of legal medication by lengthening withdrawal times and standardizing and strengthening punishment for medication violations, permitted or otherwise.

Gulfstream Park, following the lead of New Meadowlands, has begun out-of-competition [random] testing. Stronach Group owner Frank Stronach has called for establishment of on-track pharmacies that would buy and dispense all medications to all horses on racetrack grounds.

Based on the Hong Kong model, newly constructed “house rules” would prohibit anyone from having any medication in their possession except those that have been properly prescribed in a recognized therapeutic treatment program.

Critics, of course, pointed to the many logistical issues, such as treatment administered at “off track” training centers, or the fact that Hong Kong is a single circuit with a horse population that routinely is double the amount of races run there in any one year.

The Stronach Group plan calls for hiring an equine health and safety director to devise how the policies will be implemented and decreed in consultation with a committee consisting of owners, trainers and veterinarians.

Jockey Club chairman Ogden Mills Phipps proposed that veterinary records of every horse entered in this year’s Triple Crown races be made immediately available. The New York State Gaming Commission does this for the Belmont Stakes, but it only covers a three-day period. Phipps thinks the time frame be lengthened to two weeks.

A large number of prominent owners and trainers have voluntarily pledged to make veterinary records available to the public for all North American graded stakes.

This is admirable, but it should be considered only a good place to start, especially since the public bets most of its money on high quality racing programs.

Among the trainers to volunteer were Roger Attfield, Mark Casse, Christophe Clement, Neil Drysdale, D. Wayne Lukas, Richard Mandella, Michael Matz, Shug McGaughey, Kenny McPeek, Bill Mott, John Shirreffs, Al Stall Jr., Dallas Stewart and Ian Wilkes. There were a similar amount of prominent owners and breeders.

To their credit, many highly visible owners and breeders have expressed skepticism that the industry will make the necessary concerted effort to level the playing field.

Further, these individuals are aware that if currently dormant public perception becomes active, possibly spurred on by the next high profile accident or scandal, powerful conservative extremists could demand that government shut the whole thing down.

If the adoption of the RCI model rules becomes universal, all trainers who use race-day Lasix on 90 percent of their horses will have gained a substantial victory as practitioners but the sport will lose again.

Many of the sport’s most influential and potent owners and breeders don’t trust that the model rules will be enough, that permissive medication policies have only helped to weaken the breed to the detriment of all.

And so they formed a grassroots organization, WHOA, the Water, Hay and Oats Alliance, hoping to rid the sport of race-day medication.

These are not idealists having no financial dogs in this fight but rather are practitioners who take a long-range view, keenly aware that status quo policies have caused a schism in the industry not dissimilar to what’s happening in American life on a daily basis.

“For most all of my career in the third generation, we as an industry have allowed both intentional and unintentional consequences of this use of permissive medication to overwhelm this great sport,” said Staci Hancock of Stone Farm.

“…Far worse, our lack of a coherent uniform policy has given much of our public the impression that we are only interested in exploiting these magnificent creatures,” stated Don M Robinson, owner/breeder of Winter Quarter Farm.

“Horse racing is now perceived as a "win at all cost" sport. Like any other sport, we need uniform rules and transparency. We've waited far too long for our sport to make necessary rules and police itself.

“We can no longer be absentee owners of our thoroughbreds. It's time to clean up our act so our sport can again earn the respect of its fans. They deserve better... and so do our horses,” said Marylou Whitney and John Hendrickson in support of WHOA.

From owner/breeder Joseph W. Sutton came this: “Those charged with administering and regulating horse racing have turned their heads and done nothing. Federal legislation is required.

“Race day medications should be banned; new anti-doping rules should be strongly enforced, and those who cheat should be severely punished. If not, our sport is doomed.”

Although federal legislation endorsed by WHOA may be the only real answer, it need not be the only one.

The recently written Horseracing Integrity and Safety Act would give the U.S. Anti-Doping Agency power to lead. USADA is the independent agency that busted cyclist Lance Armstrong and has a mission “to preserve the value and integrity of athletic competition through just initiatives that prevent, deter and detect violations of true sport.”

The USADA would create testing and stiffer penalty programs for horse racing nationally, replacing the helter-skelter state-by-state mechanism currently in place.

Unlike previous bills which were not enacted, the new bill would enable USADA to act as an antidoping body without amending the Interstate Horseracing Act of 1978, increasing hopes that it could become law.

To offer interstate off-track wagers, the host track and the off-track system accepting the wager must gain the consent of USADA in addition to previously stated conditions as required by the 1978 law.

The industry then would be dealing with the agency directly and not with independent members of Congress, which has to be a plus. However, racing must fund the costs of regulation and enforcement.

“Money can’t be an excuse because there is [money] already out there supporting a flawed, loophole-ridden system,” said Travis Tygart, CEO of USADA.

“Unlike any other sport, real money is at stake for the public, and real people are impacted. The goal would be to actually return the sport to the beauty we all know is there, and ensure that the consumer, or betting public, or just those watching on television, would know that it was a level playing field.

"The USADA is not here to say it must be federal legislation; we are here to say there is a model that can help, and be done much better than it is being done."

"There are really two questions,” concluded Tygart: “How good or not good is the [new] policy? And once you have uniform policies, then the question is whether the implementation of those policies is uniform or not."

Said Phipps, who’s Jockey Club registers all Thoroughbreds: “We fully support, and have shown, that the independent model is the only truly effective way to regulate a sport.”

So, how badly does racing really want to clean up its act? This is about more than Steve Asmussen; it is about the conduct of every horseman going forward. They deserve to have rules that are clear and fair, uniform standards wherever they race.

But horses have rights, too, to compete naturally, and may the best horse win. For those who fund racing itself, the horseplayers, they have a right to expect that what they bet on is what they get.

Written by John Pricci

Comments (16)


Sunday, April 20, 2014

Let the Waiting Begin

EAST RUTHERFORD, NJ, April 19, 2014—Well, the two final Der.., er, Preakness preps have been run--but more on that later.

To say that Cairo Prince’s 3-year-old season has had its ups and downs following a thoroughly comprehensive victory in the Holy Bull Stakes early in the season would be an understatement.

First, came the Florida Derby disappointment which might have been able to be remedied; everything else being equal, which, of course, it never is.

Then following defections at the top of the Churchill Downs points leader board, he was able to draw into the field at #20. That was just; he deserved a spot in Derby 140.

Now comes the unfortunate ankle injury, the source of which remains a mystery to his connections at this writing, that has knocked him off the Derby trail but hopefully will not force him to enter the breeding shed prematurely.

The defection moved Vinceremos up to #20, giving Todd Pletcher a fourth Derby entrant should the status quo be maintained.

We’re not sure that the Sam F Davis winner and Tampa Bay Derby runnerup even has a puncher’s chance with this Derby class but one supposes that for the five-time Eclipse Award winner there is safety in numbers.

With respect to the HRI Derby Power 10 and beyond we’re certain very little will change when the NTRA Poll is released later Monday afternoon. In all likelihood the rankings will be based on voter projections of the likely winner and serious contenders.

At Pimlico, King Cruz did what he had to do, i.e., win as the heavy Federico Tesio favorite. But it would have been interesting to see what might have been the result had Sassicaia found a seam, any seam, anywhere, between the five-sixteenths pole and the wire.

In the language of the place where I witnessed the festivities, the New Meadowlands Race Track, he was raging with pace. While I can’t say I saw the entire gallop-out, the segment I did see had him in front of the winner, and I don’t believe at that point it was that far beyond the finish line.

Sassicaia has always been highly regarded, is in top hands, and will be, with normal development, a player within the division, everything else being equal which, of course, it never is.

Mark Casse called a hell of an audible, and Miguel Mena rode a hell of a race to upset Illinois Derby favorite Midnight Hawk by a last-jump nose with a recent maiden graduate, Dynamic Impact.

Casse cross-entered the colt in the $200,000 Lexington Stakes at Keeneland--where the colt had been training lights out--but at decision time opted for the $500,000 dirt race at Hawthorne.

Mena, from his pole position, actually pressed odds-on Midnight Hawk from the rail position around both turns, a tack that works--I don’t know—maybe once every thousand races?

Midnight Hawk finally cleared Dynamic Impact at mid-turn but Mena stayed on top of the colt, indeed asking to go after the favorite again after shifting course outside at headstretch.

Did Midnight Hawk stay the nine furlongs? Not likely, but he was game, and a lesser recent maiden would not have come up with that final surge RIGHT at the wire.

Watching live, it appeared that the favorite had prevailed but thanks to a brilliant slow-mo of the finish by the closed circuit boys at Hawthorne it was, “hey, just wait a minute.”

Dynamic Impact is coming to hand quickly and could be a factor later on--like four weeks from now. With no qualifying points available—not that he was likely to come back in two weeks anyway—there is no Derby in his future.

Here then is the HRI Derby Power 10, Week 9 Edition:

1. California Chrome (36)
2. Hopportunity (26)
3. Wicked Strong (25)
4. Intense Holiday (22)
5. tie-General a Rod (18)
5. tie-Wildcat Red (18)
7. Danza (12)
8. Samraat (11)
9. Vicar’s In Trouble (6)
10. Candy Boy (3)

Written by John Pricci

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Friday, April 18, 2014

In Wake of Churchill’s Takeout Rise, Talk of Boycott Intensifies

SARATOGA SPRINGS, NY, April 17, 2014—I was trying to think of a possible headline to address the recent takeout increase at the upcoming Churchill Downs spring meet and “tone deaf” immediately came to mind.

Almost instantly, however, that description was too moderate to define this absolute unknowing decision in terms of what’s been learned about the economics of parimutuel takeout in recent years.

HorseRaceInsider has written extensively on this subject since 2010. What I have to say now I’ve said over and over and over and over again. Other websites and bloggers have done the same during the same period of time.

Can racetrack institutions and horsemen’s groups really be this obtuse?

Horseplayers often disagree; it’s in their DNA, their differences making all things a horse race. On this topic, however, they speak with one voice, with the exception of the top four or five percent that account for roughly 25 percent of total handle.

Those bettors, and the tracks that covet and woo them, do so via a rebate system that reimburses personal handle somewhere in the neighborhood of 8 percent. It’s in their vested interest to keep takeout rates high.

They apparently never consider that the laws of diminishing returns will hurt them in the long term. But never mind the long term; get the quick fox now and the hell with tomorrow.

Our position, as Cary Fotias always explained, is that a takeout reduction is the universal rebate the game needs to survive, much less prosper.

If rebates to the best customers were THE answer, why hasn’t this approach helped put a fiscal finger in the dike of a national handle decline of 30 percent in non-inflation-adjusted dollars since reaching its zenith of $15.1 billion in 2003?

The causes for racing’s slide are myriad and can be recited from memory by anyone even remotely tethered to the industry. Undeniably, the biggest reason is that the game’s rank and file have been walking away in droves. And why?

Because they are losing their money at a faster rate than any other popular form of gambling that benefits from residue of “square money.” If racing is to survive its challenges, keeping the fan base liquid longer is a must.

With continued high takeout, the “sharps” will continue to cannibalize each other. As the fictional Larry the Liquidator once opined: continue taking a bigger slice from a smaller pie, down the tubes.”

Unlike Churchill Downs Inc., there are other wagering companies that get it and have done something about it: The introduction of a fractional low-takeout “Players Pick 5” at Santa Anita reversed the negative trends created by the player boycott of 2010.

Die by the Horseplayers Association of North America, who supported the Santa Anita boycott; live by the Horseplayers Association of North America, who introduced the Players Pick 5 concept. *The boycott was spearheaded by the Players

In that case, and virtually all others, lower-takeout fractional bets have not only grown handle significantly but has had positive, unintended consequences of increasing handle in the vertical pools of “Pick” races and in its sub-sets--Pick 4, Pick 3 and Doubles—working at once as an optimizing and hedging mechanism.

The unintended bad consequence is that, even for top “Pick” practitioners, it’s a long time between drinks. Without a significant bankroll, it’s nearly impossible for the average bettor, defined here as a fan starting with $200 per wagering session, to sustain droughts.

There never have been long term studies of the effects a reduced takeout. Tracks, horsemen and the states simply don’t have the patience or believe they’re entitled.

However, every significant short-term study I’ve seen, dating back to the 1970s in New York, has shown that reduced takeout increases churn, understanding that the more money returned to winning bettors the more they bet in return. Call it human nature.

The problem with low takeout “Pick” wagers is that they don’t allow for churn in straight pools and betting to win only is still the most efficient route to horseplaying success. Unfortunately, we’ve become so inured to instant gratification that making a score via complex wagers proves too tempting and for casual players and weekend warriors, too much fun.

The rake on losing wagers remains 100 percent.

With respect to the Churchill increase, it’s amazing how non-gambling execs put pen to paper and came up with a percentage increase they believe will raise money for purses and increase revenue, hanging their decision on the Derby’s extreme popularity.

The problem comes in the Fall meet when lower handle will result in reduced purses or fewer races.

If Churchill executives haven’t learned anything from the past re the economics of player liquidity and churn, they probably also are underestimating the resolve of today’s horseplayers that have become an Internet force to be reckoned with.

Horseplayers, through the auspices of HANA and various social media are united as never before. Chat rooms, forums and player-centric sites like HRI are full of players set to boycott Churchill Downs racing, including the Kentucky Derby.

Many of those have closed their Twinspires wagering accounts and the idea of an organized boycott is gaining momentum. Players have demonstrated their disapproval in the past by not supporting racetracks they view as player-hostile, choosing instead to make their wagers on player-friendly circuits.

For an example of how increased takeout results in handle loss and vice versa, the Equinometry website has a comprehensive study based on the California that goes beyond the player boycott at Santa Anita’s in 2010 into 2011. The trend began to reverse in 2012 and 2013 due to the low-takeout Pick 5 cited above. (

Parenthetically, checkout Tom LaMarra's Wednesday post on the Bloodhorse site which contains excellent background on simulcasting.

While CDI is certain to make revenue gains in the short term because of the unusually high number of Oaks-Derby fans, price sensitivity won’t be a strong factor until Fall when rank and file horseplayers again will dominate the pools.

To reiterate: Increasing takeout decreases handle. Lowering takeout increases handle. Boycotts have been very effective in the past and players are more united than ever. Very interested to see how this one shakes out going forward.

*Correction addendum posted 10:33 am 041814

Written by John Pricci

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