Wednesday, December 22, 2010
Racing’s Top Stories of 2010
SARATOGA SPRINGS, NY, December 21, 2010--Pick any recent year in Thoroughbred racing history and what you’ll get is a mixed bag, just like the year that‘s mercifully coming to an end, on many levels.
All who are engaged in this sport; the owners, trainers, jockeys, backstretch workers, racetracks, racing organizations and the media will have their take on whether or not, 2010 was a good or bad year.
However, there are two other groups engaged in the sport. Eliminate either one and there is no game: They are, of course, the equine athletes themselves and the fans who make the whole thing possible.
The following is one man’s opinion regarding the news made the game go throughout the year--again, some good and some bad. Depending on your own point of view, the following likely turns out to be an equal sampling of both. To wit:
1. Zenyatta, Racing’s Queen:
The great six year old mare was the only horse in 2010 to put the game into the sports mainstream. Her story never about how much she was worth, the overriding element that controls the game, more often than not to the sport’s detriment. It was about what was for many, the horse of a lifetime.
It was about remaining perfect until she reached her ultimate goal, and she did just that, all in Grade 1 company. It wasn’t Zenyatta’s fault that the Reigning Horse of the Year was suffering a case of burnout.
Had the meeting with Rachel Alexandra taken place at Oaklawn Park, there would have been no talk of the soft schedule. But somewhere in the story of Zenyatta it must be acknowledged that she really didn’t need to race at all.
Credit Jerry and Ann Moss for their sportsmanship, or the Queen could have retired with a perfect record in tact after becoming the first female winner in Classic history. That would have been enough to keep her legacy in tact.
Credit John Shirreffs, too. He conducted himself with all the pomp and circumstance of the trainer next door. He managed Zenyatta’s career as well as any horseman ever has managed any horse in history.
Shirreff’s handling was perfect even if the mare came up a head short of going 20-for-20. The class and grace he demonstrated under pressure, both in victory and defeat, is a template for what a role model is supposed to be.
But it was the Queen herself, with an electrifying style that went looking for trouble every time postward. Even in defeat, she never failed to fire. She put on a show, unlike any I’ve seen in four decades, before, during, and after her races.
A star of the highest magnitude, she finds herself embroiled in her second consecutive Horse of the Year battle with the only horse ever to finish ahead of her on the racetrack, Breeders’ Cup Classic winner Blame.
For the second consecutive year, Zenyatta finished second in the Associated Press poll for Sportswoman of the Year, this time to Olympian Lindsey Vonn. For her sake, and her connections, it is hoped that scenario won’t be repeated at Eclipse time.
2. The Closing of New York City-Off Track Betting:
The organization had been on life support for some time, but no one really thought it would come to this. An outdated business model, bloat, and mismanagement ultimately did it in. The ramifications of the loss of the billion-dollar bet-taker will be felt into 2011 and beyond.
NYC-OTB’s handle was so critical to the fiscal health of this country’s largest racetracks that it could hold tracks hostage if it didn’t agree with its rights’ fees prices, and it often did. Sooner or later, the tracks would capitulate and compromise.
It’s demise resulted in the loss of a thousand jobs and left the NYRA holding the bag for eight figures, the state’s breeders for seven. Chances are strong that its final chapter has been written but given the course of politics in the Roman Empire State, anything’s possible.
3. New York Racing Association Gets VLT Franchisee:
It took nine years--nine years
--for New York State to finalize a deal, ultimately with Genting New York. The delay cost the state’s taxpayers billions based on projections at that time VLT approval was granted.
Now, a decade later, Yonkers Gaming and Raceway has solidified its place in the metropolitan area market. NYRA has missed a golden opportunity to establish its gaming brand. With the state entertaining overtures from Indian Tribes to establish casinos in the Catskills, oversaturation, despite favorable projections from gaming experts, remains a possibility.
4. Churchill and Magna Pull Out of NTRA:
What does that say for the health of racing’s only national marketing arm and its chances to be effective going forward? That question will continue to challenge the industry when racetracks need to be more responsive to shareholders than the sport’s long term health.
NTRA has replenished some of the lost revenue but the organization remains on shaky ground. Resultantly, what it can do is limited. It takes a good deal money to get horse racing on national television, funding that the organization has found harder to come by.
5. Horse Shortage Hits Full Stride:
The state of a failed economy since 2008 has put a tremendous strain on the breeding industry. Dollars to spend in the marketplace dwindled to the point where fewer horses were bred, and farms have had difficulty securing bridge loans that carry them from mating date to sales ring.
The number of horses needed for racing over the next three years is expected to drop by more than 25 percent. With significantly less stock to go around, tracks already having difficulties filling races are going to feel a greater strain to do so. Further contraction of racing dates, with weaker tracks failing altogether, is inevitable.
The number of race days in 2010 will be down about eight percent by year‘s end. Breeding farms having either shrunk their operations, moved to states with slots-infused purses and breeding funds, or both.
Like the NYC-OTB scenario, this issue will continue to having a negative impact on the sport going forward. Until the economy truly recovers, And until employment turns around significantly, it’s hard to know where tomorrow’s customers with disposable income in hand will come from.
6. Monmouth’s Boutique Summer Meet:
The experiment held at racetrack on the Jersey Shore is considered by many to be a template for the racing industry to follow when inevitable contraction continues. It’s hard to argue with that logic looking at racing’s traditional indicators.
The less is more approach--in which dates were cut, higher profile race days were bolstered by more and better races, with bigger fields and lower takeout-- created huge spikes in attendance and handle. But it’s difficult to gauge whether it was successful at the bottom line.
If contraction inevitably improves the quality of the product, that would be another welcome result from this experiment. A recent study showed that wagering on the higher class races is up significantly, approaching 20 percent, a remarkable figures when seen in the light of handle losses. The trick then becomes producing better horses from smaller foal crops.
With total industry handle down again, it’s fair to ask whether Monmouth made sustainable gains given its sizable Atlantic City subsidy and whether its gains were the result of winning the simulcast wars, attracting handle away from other circuits. Cannibalization, another element sure to lead to further contraction.
7. Life at Ten Debacle:
With its lack of uniform drug rules, constant threat of catastrophic injury at a national event, the industry’s laissez faire attitude when it comes to adjudicating rules violators adds to the perception that the game’s not always on the level and a double standard exists when dealing with issues.
Rightfully or not, the fact a horse was permitted to race after its jockey told a network television audience something was wrong with his mount, then failed to follow proper reporting procedures while racing officials never considered taking precautionary measures by notifying the state veterinarian at the starting gate themselves, then watched the second betting favorite be eased immediately after the start, costing the betting public millions, was and is indefensible.
The Kentucky Horse Racing Commission is still fiddling with its ruling while the betting public continues its slow burn for nearly two months awaiting an official ruling.
8. Santa Anita Back To Dirt:
For the first time since a state mandate to install synthetic surfaces at all major Thoroughbred racing venues in California, a major racetrack will return to a dirt racing surface beginning opening day, December 26.
Bowing to pressures from leading horsemen and a major segment of the betting public, the Magna group installed the new dirt surface at its own expense without even waiting for state approval, only recently granted.
The entire state is likely to be rooting for the dirt surface to rekindle interest in California racing, to boost field size, provide relief from the negative publicity generated by industry infighting, the takeout increases at Los Alamitos and soon Santa Anita, and restore the quality of the California racing product.
9. Takeout, Handle and Fractional Wagering Trifecta:
While handle losses this year were not as precipitous as early season trends indicated it would be, the continued decreases remain alarming. When measured against inflation rates, national handle has been halved over the last seven years as fans have walked away and higher takeout rates have taken a toll.
While wagering aspects continue to be largely ignored, strides have been made by racetrack executives who are beginning to respect the concept of churn and how it works. On balance, tracks that have introduced lower rates have seen handle grow. The coupling of lower takeout with fractional wagering unquestionably has proven popular with racing’s rank and file fans; one of the few positive developments of 2010.
10. Growth of Internet and Grass Roots Organizations:
Led by the Horseplayers Association of North America, which is sponsoring a boycott of the upcoming Santa Anita race meet in protest of takeout increases, horseplayers, a notoriously apathetic group, are beginning to take themselves seriously as potential change agents.
It is not the intention of the organization to disrupt handle on a national basis. With nine of every 10 dollars bet at simulcasts, HANA suggests that betting dollars find their way into other pools. The idea is to send a message to tracks that the customer matters.
HANA has attracted support from several betting syndicates and large players and has seen over 1,750 horseplayers pledge to boycott the Santa Anita meeting, according to the number of registrations on PlayersBoycott.org. It is now considering a new starting date to commence the Santa Anita boycott in 2011.
Written by John Pricci
Friday, December 17, 2010
Horseplayers Need to Represent and Be Represented
SARATOGA SPRINGS, NY, December 16, 2010--With apologies to Gil-Scott Heron, the Revolution will
be televised, and those watching will be the revolutionaries themselves.
Santa Anita Park, newly installed dirt track and all, will open for business in nine days, the day after Christmas. It’s always a welcome rite of winter, a reason to get excited about Thoroughbred racing again.
But if the revolutionaries keep their promise, all they will be doing is watching, not betting, striking a blow for horseplayers everywhere.
It’s very difficult for any grass roots organization to make a difference in the big picture. These days there’s just too much cynicism, too much apathy, too little character and too many powerful interests to go around.
But horseplayers, those of whom are still betting, apparently ARE made as hell and, not only are they not going to take it anymore, but collectively, big bettors and small, are taking proactive measures to do something about it.
The organization that’s spearheading the boycott is called PlayersBoycott. When the Horseplayers Association of North America, HANA, recently polled its membership, 70 percent of organization voted to officially support the PlayersBoycott organization. HANA now has over 1,700 members.
“I also polled my customer base and asked what appropriate action should be taken in light of the takeout increase at Santa Anita. Over two-thirds voted to support the boycott,” explained HANA President Jeff Platt.
“The customer matters. We can send a clear message to the California Horse Racing Board and the Thoroughbred Owners of California that a vote for higher takeout can have repercussions.
“We’re not just lashing out in anger. We want to shine a light on the issue so that the CHRB and TOC understands that the players need representation.”
A majority of the membership of these two groups have promised to boycott the Santa Anita races because of the increased takeout rates, which have gone up two or three percent depending on the exotic pool tier.
Platt, a serious player, will support the boycott. He also received commitments from several batch-wagering computer syndicates to not only support the boycott but take proactive measures as well, taking out ads in trade journals, the Los Angeles Times, etc.
Some computer bettors would sacrifice short term gains for long term profits. “We believe in lower takeouts for everyone,” said one syndicate manager. “If takeout was lowered to acceptable levels, we wouldn’t need rebates.”
Only after polling its membership did HANA openly lend its support to the upcoming boycott. Computer syndicates cannot take this tack, however. If they are large enough and become public, they could become fair game for running afoul of anti-trust laws by acting in restraint of trade.
Resultantly, this action needs to be taken by a grass roots advocacy group such as HorseplayerBoycott which can attract more horseplayers so that their greater numbers can make a difference.
Organizers project that a successful boycott by computer bettors can effect the handle by as much as 10 percent, although it still could be considered a success if it didn’t reach that figure. Several thousand names in support could make a difference.
What’s clear is that if horseplayers don’t look out for themselves, no one in the industry will--at least not in California if events in 2010 mean anything.
In January, the CHRB decided to raise the takeout for the Los Alamitos quarter horse meet. It asked HANA to monitor the effects the takeout increase would have on handle.
CHRB Chairman Ed Allred said at the time that if takeout were adversely effected, he would rescind the hike. Allred resigned shortly thereafter and could not act on that promise.
On-track handle at Los Alamitos was down 27 percent year over year. But when that result first came up for the revenue, CHRB ordered that the handle comparisons would be measured on a handle-per-day, not a year-over-year basis.
The skewed figures presented a completely different picture, that handle losses were minimal. At a meeting with the CHRB in the spring, HANA objected to the change in methodology.
The change in methodology was covered up. HANA later learned that the CHRB had lobbied the legislature behind its back, seeking a takeout increase on Thoroughbreds.
After the CHRB, TOC and the racetracks found that there was a backlash to the increase, track managements at Santa Anita, Hollywood, Del Mar and Golden Gate worked hard to kill a bill that also contained a provision lobbied for by Betfair to allow exchange betting.
The Betfair provision was approved but an agreement was fashioned delaying its implementation until 2012 while further study was conducted.
At the CHRB meeting in October, when it was learned that a takeout increase for Thoroughbreds was signed into law, the news was greeted with a standing ovation, according to HANA.
“It’s clear that the CHRB is nothing more than representatives for the owners and trainers, not the players.” said Platt.
“The industry has spent hundreds of thousands of dollars on research and chooses to ignore recommendations made on the positive effects of reduced takeout.
“When the Lottery takeout was lowered in California, the amount of revenue to the general fund increased by $50 million. That also happened in other states.”
When asked, Platt conceded he was aware that a return to dirt would be supported enthusiastically by horsemen, resulting in larger fields and a potential for lots of carryovers, making it difficult to weigh the effects of a boycott.
“I expect there will be euphoria at the start of the meet but it will be short lived, with or without a boycott. As the meet progresses and the higher rate will takes its toll, you will get a negative effect on handle at the end.”
The Horseplayers Association of North America, with the support of computer bettors, and making a concerted effort on the behalf of horseplayers from every region in this country.
They are looking for a few good men and women to lend their support to the cause. Simply click through to http://www.playersboycott.org
and add your name to more than a thousand horseplayers and computer syndicates. Be part of a solution. The money saved might be your own.
Written by John Pricci
Thursday, December 16, 2010
Add to New York’s Troubles an Unnecessary, Mindless Distraction
SARATOGA SPRINGS, NY, December 15, 2010--With the year winding down and compilations of “the year in review” have begun to appear, one news organization dubbed 2010 “The Year of Hubris.”
So, why shouldn’t New York Racing Association executives join in on the party? However, before dancing on perception’s grave, there are other considerations that need addressing.
One of the biggest acknowledged reasons for New Your City Off-Track Betting’s failure is that in both perception and reality, the organization was a patronage haven for the politically connected. The weight of that bloat and inefficiency ultimately brought the company down.
Meanwhile, NYRA employee morale had reached its nadir in 2009 as it began addressing its own inefficiencies while it scrambled for money to keep its doors open and pay horsemen their purse money.
According to NYRA data, its unionized work force was trimmed by 160 jobs and when administrative employees are added to this total, by next year the NYRA will have seen its work force diminished by 262 workers, about 22 percent.
With 78% of the new workforce providing 100% of the labor needed to run what is still considered America’s #1 Thoroughbred circuit, a 3% pay raise, with a 5% boost for senior managers, even in these economic times, is not unreasonable over what will become a three-year duration.
Additionally, the fact that remaining employees have seen their health premiums escalate by one-third and, paid below industry standard in many cases while living in one of America’s most expensive regions, and have taken on added responsibilities, is defensible on its face.
However, the by-product of the action taken by NYRA executives to increase its salaries by 5.5 percent is a disservice to the entire racing community already reeling from an approximate $30-million hit taken by NYRA and the state’s breeders. And this excludes ancillary businesses.
The executive pay increases has led to more cheap shots from the usual places; the editorial boards of New York City tabloids and the New York Times, which after 40 years even now refers to OTB as a “failed bookie” rather than a parimutuel outlet. It still portrays racing patrons in the same stereotypical fashion, as degenerates and losers.
In a recent editorial, the New York Post referred to NYRA’s declaring bankruptcy in 2008 and collecting a $105 million “taxpayer bailout” that same year and “snagged” another $25 million this year with a state guaranteed loan.
OK, for the moment let’s forget for the that the newspaper business loses money, too.
There was no mention in any editorial I saw that the “bailout,” like the $25 million loan, were advances against future VLT revenues, not “bailouts,” a hackneyed headline grabbing buzzword.
There was no mention that the three NYRA tracks, now owned by the state, is the same state whose legislators cost New York’s citizens hundreds of millions in revenue by delaying the VLT franchise process for nearly a decade after the measure gained approval in 2001.
There was no mention of the $375 million paid to New York State upfront by the VLT franchise operator Genting Group for the privilege of conducting gaming and the construction of a new high-end revenue generating facility on Aqueduct Race Track grounds.
And there was no mention that since NYRA’s inception in 1955, horseplayers recently have contributed on average $2-billion a year to New York State’s urban, suburban, and urban economies.
This excludes revenues from the state’s regional OTBs that does about one-third of its business on the NYRA racing product.
That’s significant dollars for the people of this state; not bad for a “dying business.” And the only way this revenue stream will stop completely is if Albany kills it dead. It’s had plenty of practice doing just that.
It’s been documented that NYRA executives do not get paid an industry standard when compared to other major racetrack organizations. In the private sector, their salaries would be chump change. But those arguments would miss the point here.
“Imprudent; tone deaf; a stick in the eye; blinders on; unconscionable; irresponsible; indefensible” are just some of the words or phrases used to describe the executive raises issue a mere 24 hours after the country’s largest parimutuel retail company went out of business. To this list add the word arrogant.
Is this really the message that New York racing’s top executives want to send to the citizens of a state which itself is in a hole for a projected $9 billion in the fiscal year 2011-2012, not to mention high unemployment, rising costs, and a cut back in basic services?
Isn’t this comparable to the federal government’s extending tax cuts to the richest Americans in exchange for an extension of unemployment benefits and tax cuts for an already overburdened middle class? These pay raises might not be as disproportionate, or the situation as dire, but in the minds of many it’s certainly analogous.
Given all the issues confronting racing, even as it’s future is charted by those same politicians New York’s new chief executive has promised to eliminate widespread corruption from their ranks, did Thoroughbred racing, given recent events, really need such disheartening, boneheaded distraction?
Written by John Pricci