Thursday, December 13, 2012

Chairman Skorton and the New NYRA Board: Perfect Pitch

NEW YORK, 12.12.12-- "I really do not know much about horse racing." That quote from David Skorton the day before the President of Cornell University was officially elected Chairman of the Board at the new New York Racing Association raised plenty of eyebrows in the racing community for obvious reasons.

But hasn’t that always been the common wisdom; that the people who run the Thoroughbred industry don’t know enough about how to manage the business they’re in? Is racing even a sport, or is it strictly a betting vehicle meant to sustain itself while simultaneously filling the coffers of state government?

Everywhere in this country, especially here, New York was universally regarded as the nation’s capital of American Thoroughbred racing. But much has happened to and in the gambling business in the last 55 years. No one thinks that these are the good old days.

It was against this backdrop that Skorton was introduced to not only the racing world but to anyone with an interest in Thursday’s NYRA Board of Directors meeting in Manhattan, held in open forum and webcast via the world wide web on the NYRA’s own website. The association’s founders never could have envisioned anything like this.

When NYRA was conceived 55 years ago, Thoroughbred racing was the Sport of Kings and the moneyed class. Back in the day, the only lottery anyone talked about was the Irish Sweepstakes, betting off-track was still 20 years away, casinos only could be found in the Nevada desert or Monte Carlo.

And the NFL, the current 2000-pound entertainment and wagering gorilla, was nowhere near becoming a national pastime that would supplant baseball, where it says “no betting allowed” in every locker room.

Today, no one waits for a horse-drawn cart to deliver ice or sharpen kitchen utensils and now an entire country awaits the result of a national Powerball lottery--especially when there’s a carryover, just like in racing--nine of every 10 dollars are bet away from the track and there are mom and pop casinos on virtually every street corner in states that permit it and more money is bet illegally on football than is wagered legally on horse racing. The new normal seems to be anything but.

While it might help, it’s unnecessary for Skorton to know anything about horse racing to fix what’s wrong with the racing business in New York. Admittedly, he knows nothing about race horses but doesn’t that beg a question? Why is an industry that’s been run by experts in New York and everywhere for so long falling from favor so precipitously?

Skorton does not get paid to find the answer to all these mysteries, only to come up with practical business solutions for a local agribusiness that survives by riding the backs of American Thoroughbred racehorses--healthy ones--animals that can’t refuse to take an aspirin even if it wanted to. Gov. Andrew Cuomo thinks he was the right man for the job. And he just may be right.

Handicapping qualifications notwithstanding, who would be more qualified than the President of Cornell University, an academician who enlisted Michael Kotlikoff, Dean of Cornell’s College of Veterinary Medicine, as a special advisor to provide a knowing set of eyes to see that a new, shorter version of the NYRA Mission statement that includes the welfare of the animal in the front row stays the course.

At the Board meeting, it was suggested the mission should be “meeting the highest standards of racing and horse safety,” which is what it was in the glory days. Skorton then said that the statement wasn’t a notion he wanted to ram through and asked for feedback. At that point, a board member was heard to say “perfect.” And it was, an appropriately short and correct response to an appropriately short and correct idea. Standards matter.

Even amid server interruptions, the web coverage provided more than was ever previously witnessed at a NYRA Board meeting in about 67 years. One sensed a spirit of cooperation free of ego and acrimony, as if the newness of transparency would provide a light to lead the troubled organization out of the wilderness and on a path to a brighter future for New York racing, the animals, and, by extension, the Empire State. Alas, political theater at its finest.

Skorton, who said he was honored by Cuomo’s suggestion that he head the Board, strongly suggested that NYRA make its third-quarter receipts available to the press, a sharp right angle from the secretive manner the association most often conducted itself in the past. When business is conducted according to the State Open Meetings Law and the Freedom of Information Law, good things can happen.

Other agenda items were approved such as prohibiting NYRA officers from making political contributions and even making a bet. The same applies to horsemen's groups but Board members may continue doing both. At first, the prohibition of wagering seemed a bit overwrought until Skorton explained that NYRA officers represent the state which is charged to serve the public. He hinted that betting could be a distraction.

Transparency and accountability together might take some getting used to.

Apropos, too, is the idea that the new NYRA should no longer do business as a “not for profit” institution but rather as a public benefit corporation, at least for three years when, as promised by Gov. Cuomo, NYRA becomes eligible for privatization. New York racing will need those three years. There’s much to be accomplished before profit again can incentivize good racetrack management.

The issues discussed were both quantitative and qualitative: How to restore New York racing to preeminence instead of being “somewhere in the middle,” according to a board member who added that an infrastructure needed to be built in support of the racing product sooner than later. “We have this money, let’s use it well.”

After having very little to smile about following the takeout scandal, Thursday’s board meeting was a promising start, a new beginning with hope that the positive energy, spirit, and cooperation on display Thursday will not lose momentum. The Board knows it must be ready for the next legislative session. There’s no time to waste in what promises to be a long, difficult road.

So far, I’m inclined to bet that Mr. Skorton and friends are capable of getting the job done. It’s day one at the new NYRA and everyone starts out even.

Written by John Pricci

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Saturday, December 08, 2012

Presque Isle Experiment Could Teach Industry a Lesson

SOUTH OZONE PARK, December 7, 2012—Pending approval from the Pennsylvania State Horse Racing Commission, Presque Isle Downs & Casino will shift its racing program to a Sunday through Thursday schedule and drop racing on Friday and Saturday.

Weekend programs normally draw bigger crowds, of course, especially when first post is 5:25 p.m. So then why drop those popular days? Because destination venues and boutique race meets notwithstanding, the live gate no longer assures viability.

The popularity of a simulcast signal is no longer a luxury; it’s an absolute necessity. If simulcasting fails, slots are the last resort, but tracks like Presque Isle need viable racing, too. And if that fails, yet another shopping mall becomes the reality.

It matters not that tracks get a bigger slice of the wagering pie from the live product than it does from its simulcast product, not when “all-sources” rules. If a racing model is to succeed, betting handle, not Lotto receipts, must fuel purses.

There’s still a big place for on-track handle, of course, but only if you own a destination venue, or run a boutique meet, or have the right location…location. Think Oaklawn… Oaklawn. That’s the sad fact of life in this brave, not-so-new simulcast world.

In no small way, then, is it ironic that the 21st Century racetrack has a much better chance to build its brand through the simulcast marketplace than in their own back yards.

Why concentrate on Erie, Pennsylvania when you can target the world?

And that’s what Presque Isle is attempting to do with this move. Schedule changes have worked at other tracks and it can work for them, too. The track will find out if it gets that opportunity when the PSHRC convenes next Thursday.

Reality dictates that the Presque Isles and Parxes of the racing world cannot compete with the Aqueducts and Churchills; Hawthorne on a Saturday afternoon is no match for Gulfstream. Quality of competition and branding matters.

While it’s true that large fields of claiming horses will out-handle small fields of allowances horses, selling platers are no match for class masters when placed on even footing at the entry box, everything else being equal. The Jockey Club has studies to prove it.

Presque Isle management gets this and is taking proactive steps. The elephant in the room is: What’s taking the rest of the B-level and C-level tracks so long to figure this situation out? Apples can compete with other apples, but they won’t beat oranges.

In fact, here is the first bold prediction for 2013: More smaller tracks will change their schedules to fill the simulcast void left by the majors on Dark Mondays and Tuesdays. If they are to remain viable within the racing community, it’s inevitable.

In fact, smaller tracks can do for racing what racing has failed to do for itself. Smart scheduling will have the same effect as the creation of major and minor leagues. It will be no different than when tracks schedule post times not to conflict with parimutuel rivals.

With B and C level tracks competing with other B and C tracks, all will be on equal footing with no thousand-pound gorillas to take on. Tracks such as Parx and Presque Isle, and next-level venues such as Laurel and Delaware could OWN Dark Mondays and Tuesdays.

Consequently, tracks might figure out a way to cooperate instead of compete. A 10 percent, 50-Cent Pick 5 shared among three or four tracks, similar to the Stronach wager wager a few years back, could attract significant handle by bundling the best races. Low takeout rates could be sold to state houses as a “marketing” expense.

And if this long chance ever became a reality, simulcast coordinators and racing offices should guard against making the races impossible to handicap.

In their greed for short term handle, tracks fail to realize that many serious handicappers eschew impossible sequences but rather are attracted to those offering potential “singles” and a reasonable chance of success.

Think of it this way: Whales want minnows in the pools.

The Pick 4, for instance, even with a 50-Cent minimum, can be too costly for the average fan that has the capacity to wager “only” $200-$300 per day. Force him to stretch his bankroll chasing a score and churn goes up in smoke, along with most tickets.

By the way, the 50-Cent Pick 4 offers a reasonable chance of success, especially when compared to the $2 Pick 6, but the bet is no gimme.

We congratulate Presque Isle for using a common sense approach to competition and wish them success with their experiment. That might lead the way for other smaller tracks to own their share of the racing week and build their brands simultaneously.

There’s only one Saturday and so many weekend warriors to go around.

Written by John Pricci

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Monday, December 03, 2012

Gulfstream Park Opening: Present, Past and Future

HALLANDALE BEACH, FLA., December 2, 2012—The first weekend of the 2012-13 Gulfstream Park meeting is in the books and there are plenty of smiling faces lighting up the immediate area.

The widest cheers appear to be a triple dead heat among Claiming Crown “King” Ken Ramsey, jockey Joel Rosario, and Gulfstream President Tim Ritvo.

And if Thoroughbred Owners and Breeders President Dan Metzger were still in town, it would have made for an all pearly-whites superfecta.

In effect, Gulfstream Park may have saved the Claiming Crown. When the event was held last year at the Fair Grounds, five races attracted five small fields with no buzz whatsoever.

But with Gulfstream’s marketing department aggressively promoting the opening day event, that effort paid dividends.

It wouldn’t qualify as an upset, then, if the Claiming Crown found a permanent home in South Florida.

With purse help culled from an agreement with the Florida horsemen, and with a $25,000 staging fee from Gulfstream, seven Claiming Crown races drew 135 entrants, albeit with a handful of cross-entered horses.

On Sunday, Ramsey was still basking in the glow of his personal superfecta on the Claiming Crown card: Four wins, including the centerpiece Jewel with 16-1 chance Parent’s Honor.

Rosario, making his first full-time foray into Gulfstream Park, jumped out to a fast early lead with six winners in the first two days of racing via a pair of riding triples.

Parenthetically, we’re sure that Corey Lanerie, making his first visit to Gulfstream, is smiling, too. He has only one win, but it was a big one; the Claiming Crown Emerald with Nikki’s Sandcastle.

Of course, the talent waters will become much deeper in the coming weeks. And it’s worth noting here that Javier Castellano, last year's defending riding champion with a record 112 wins, won the meet lidlifter.

Ritvo, meanwhile, is amazed that a featured card boasting starter allowance claimers could generate handle from all sources of $12.2 million. Those are big day-like numbers, Donn day-like numbers.

And consider that a race like the Donn might handle over $2 million on its own; the balance of the card accounting for the rest of the betting. By any measure, opening day was remarkably successful.

The positive trend continued on Sunday. Handle was up 10 percent with nine races vs. 2011’s 10-race card. Even the Rainbow 6, introduced with seed money last year but without a $50,000 sweetener this time, attracted $23,000 worth of dimes in its meet debut.

And wouldn’t know that the jackpot was hit; the lone ticket-holder taking down over $17,000.

But it’s not all sunshine and smiles in South Florida. It seldom is.

With Churchill Downs Inc. charging Calder-based horsemen $10 per horse, per stall, per day, and backstretch workers $10 per unit, two people to a room—essentially a cot without the three hots—Florida’s infighting tradition continues.

The levy, which rank and file Calder horsemen can ill afford, has caused a dispute with Calder management and resulted in an unofficial, partial boycott of the Gulfstream entry box.

In response to the fee, only 77 horses were entered for Wednesday, a program that offers only eight races, as does Thursday’s, for which 91 horses were entered.

It will be interesting to see how horses many remain after scratch time.

Insiders report that Gulfstream is dealing with the issue quietly. In the interim, temporary stalls are being added at Gulfstream. Over 200 stalls are available at Palm Meadows in Boynton Beach until it hosts a horse sale in mid-January.

The announcement that Calder horsemen would be made to pay stall rent was not made until after Gulfstream’s racing schedule was set and stalls were allotted for those intending to race in Hallandale Beach.

The elephant in the room is nothing short of the fate of top class Thoroughbred racing in South Florida.

Since getting slots and poker, any improvements made at Calder have been on the casino side, not the racing side. The backstretch there is badly in need of attention.

However, the future success of Gulfstream is linked inexorably to an expansion of the Gulfstream Village, which the Stronach Group now owns in total.

The future construction of a stand-alone casino and hotel, tied to a more equitable tax rate, is needed not only for the successful implementation of Stronach Group’s entertainment-destination vision but the near term viability of the complex’s commerce and continued good health of world class Thoroughbred racing.

For this to occur, an agreement must be forged between Calder, which shows no indication that horse racing will be emphasized in the future, and Gulfstream Park, whose future also includes playing host to the Breeders’ Cup once again.

To make South Florida racing whole, year-round racing at Gulfstream Park appears to be the only reasonable solution. In the big picture, Calder’s decision to charge its horsemen stall rent looks like a possible opening salvo.

Perhaps the positioning for forging future agreements already has begun.

Written by John Pricci

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