Friday, November 07, 2014
NYRA Should Take Lead on Hong Kong Inspired Reforms
LOS ANGELES, November 6, 2014--The recent on-line petition calling for increased barn surveillance and harsher penalties for medication violations has already succeeded in applying pressure on racing regulators.
This was demonstrated at the October 23rd California Horse Racing Board meeting when the Executive Director complained about 'bloggers and such' who “villify” the CHRB “without having the facts.”
As I listened to the archived audio, the CHRB commissioners and directors didn't come off as villains, but rather as collectively incapable of meaningful reform – perhaps more so than their counterparts in most other state racing regulatory bodies in this country.
The problem is that too few individuals, nationwide, have any experience doing it a better way.
In the past, like many others, I've advocated for a National Horse Racing Commission that would reform racing from the top down. I now believe a prototype constructed in a single jurisdiction that – once proven successful – is more likely to affect duplication or expansion elsewhere.
In a recent Op-Ed debate at the Thoroughbred Daily News, Jerry Brown and Barry Irwin both praised the Hong Kong Jockey Club as a “Central Authority” that oversees drug-free racing at the highest levels of integrity.
Irwin wrote, “The reason the wagering pools are so astronomical in Hong Kong is because the horseplayers know that the integrity of racing is without question... the one unifying theme that pervades all of the schemes brought to bear to clean up the game is that honesty is at the core of the efforts. ”
Brown replied, “... Hong Kong takes the cheating issue maybe a thousand times more seriously than we do here--they test more horses, do it thoroughly and professionally (which is NOT being done here) ...”
Indeed the handle at the two HKJC tracks dwarfs that of all U.S. tracks combined, and pays for the unparalleled scrutiny focused on approximately 1200 horses (and owners), 24 trainers, 35 jockeys, and 83 annual racing dates – one at each track per week.
The not-for-profit operation employs approximately 5,700 full-time and 18,000 part-time staff, and generates a surplus exceeding one billion dollars after taxes for charities benefiting the Hong Kong community.
Executive Director of Racing, Bill Nader, described the HKJC's “defining trait” as “outstanding customer service and public confidence.”
At least, let’s give some credit to their monopoly on legalized gambling: It’s good to be the only game in town.
Their unsurpassed customer satisfaction is achieved by delivering: a top quality racing product, i.e., large, competitive fields of fast, sound, and consistent horses; the confidence that competition will be conducted honestly, fairly and with transparency; a wagering menu reflecting consumer demand, and the availability of extensive data and analytical tools on its website.
With no local breeding industry, all horses are imported and subject to comprehensive screening and monitoring. Each horse is assigned a handicap rating following each performance in a race at one of five class levels.
Entry eligibility based on this rating system ensures extremely competitive fields. All races are conducted on grass and there are no claiming races. Horse ownership is limited to HKJC membership which reflects immense prestige.
It's my understanding that takeout in some HGJC pools is a little over 17% in some and 25% in others. Rebates of 10% are offered only on LOSING wagers of approximately $1,300.00 US or more.
I haven't yet been able to determine which wager types fall into which categories, or what minimums apply to each. Nor am I familiar with the wager types that are not offered here, or how per capita statistics compare.
But there are blocks that exist upon which a better U.S. model can be built, assuming, of course, that the conduct of racing at a proven higher level of integrity is truly preferred by the horsemen.
Horseplayers should conduct themselves appropriately as well.
Fairness in the pari-mutuel area is a major integrity component, one which has been a point of emphasis for HKJC: pool integrity and fairness; rebates that are limited to losing wagers only with no high- volume wagering qualifier so that rebates are available wherever a qualifying bet is placed.
As with any enterprise, there is still room for improvement. A greater degree of fairness could be achieved by enabling smaller wagers to qualify once their total reaches a required minimum. A $10 bettor should have the same rebate rate as a $200 player.
If Brown's assertion that only 10 percent of U.S. handle is bet by the rank and file player, this should hardly represent to the high-volume bettor--especially if rebates are paid as a bet-only voucher.
Isn’t there one U.S. jurisdiction able and willing to seize the opportunity to expand its business by focusing horseplayer attention on a more trustworthy product and process?
Given the anticipated re-privatization of NYRA, New York seems a most promising candidate for immersion into increased integrity. The NYRA announced this week its intention to hold four customer meetings a year at which players could voice their concerns.
Perhaps NYRA would be willing to show their appreciation to the small, everyday player via rebates on losing wagers, instead of carryings very high qualification minimums on personal handle, proving they’re interested in more than paying lip service to customer issues?
Maybe Kentucky’s, California’s and Florida’s top class circuits might also wish to be proactive by following, however strictly or loosely, the Hong Kong model? With an eye toward the present and future, have at it.
Is the HKJC group potentially the most desirable bidder for the New York racing franchise? That’s something to ponder, a move that goes beyond local politics.
We’re sure the recently reelected Gov. Andrew Cuomo could demand—and get—very top dollar. After all, the international gaming Genting organization is already in place at Aqueduct.
Hopefully, Frank Stronach will begin to put in place and support his stated preference for on-track pharmacies in the very near future and one day could establish Gulfstream Park as the top handle grosser from December through March; they already have the product in place.
Unfortunately, Stronach’s Santa Anita property has not shown itself to be a strong candidate for integrity leadership, considering the self-interested control of racing there by the Thoroughbred Owners of California and the impaired regulation of the CHRB.
The image of the latter was further tarnished on Breeders' Cup weekend by the widely perceived inaction in the steward's stand; once again, and again, renewing the call for uniform rules in racing.
But until and unless one U.S. jurisdiction can demonstrate a willingness to increase handle growth emphasizing integrity in all things, the next Triple Crown winner will emerge before higher standards of conduct of are applied equally across all jurisdictions.
Written by Indulto
Thursday, October 16, 2014
Who Will Step Up to Save the Game?
LOS ANGELES, October 15, 2014--Catching up on my reading after weeks of contemplating Florida sunsets, I found a few items worth examining more closely.
The first was Churchill Downs Incorporated's announcement
that they had restored the Hollywood Futurity -- citing its production of six previous Derby winners -- to its list of Kentucky Derby 2015 qualifying preps after dropping it from the original line-up last year.
Shared Belief's victory in that race's final renewal in Inglewood earned him 2013's two-year-old championship; a consequence that could have proven an embarrassing oversight by CDI had an injury not forced the champ off the Derby trail.
The new home of the Futurity is Los Alamitos Racecourse -- not yet a Grade I venue, but a candidate for national recognition should Shared Belief collect a $5M bonus for winning the Breeders' Cup Classic in addition to both the Los Alamitos Derby and the Pacific Classic.
According to Churchill Downs Racetrack President Kevin Flanery, "The robust commitments by the team at Los Alamitos suggest a strong desire to be included in our series, and we’re confident the race is likely to attract aspiring and compelling Derby prospects…We’re delighted to welcome the Los Alamitos Futurity to the Kentucky Derby ‘Prep Season."
The preceding congeniality, however, still doesn't flow in the direction of Hawthorne Racecourse whose Illinois Derby was rendered virtually meaningless by CDI when it changed the basis for Derby eligibility from earnings in any graded stakes race to points earned in races it designates.
That competitor-crippling action was uncalled-for, and surely emboldened CDI rival The Stronach Group to deploy similar tactics to eliminate racing competition at Calder which succeeded this year.
Indeed, CDI's karma is presently so bad that it just announced it will add an executive position charged with improving its image in the wake of handle losses suffered at consecutive Churchill meets and at its Arlington Park property. CDI is also facing intervention from the state of Louisiana regarding its Fair Grounds property that has already lowered purses for their next race meet.
As CDI is now considering selling the above properties, an era of new civility might best be initiated by negotiations with Hawthorne to add the Illinois Derby-- at least as a second 2015 wild card qualifier two weeks before the big dance.
Given the cold shoulder it has given boycotting horseplayers in the past, it was a pleasant surprise to see that Daily Racing Form
commented positively on the effectiveness of this grass roots movement:
"Churchill is seeking to fill the position at a time when it has come under fire from some horsemen, legislators, and horseplayers over its policies. In addition, handle at two of its tracks, Churchill Downs in Louisville, Ky., and Arlington Park outside Chicago, has plummeted this year, in part because of urging from some horseplayers to boycott the company’s tracks because of a decision this year to raise the takeout at Churchill."
The individual most responsible for that effectiveness is Jeff Platt who I often think of as the Clark Kent of horseplayer advocacy. Platt is not only President of the Horseplayers' Association of North America but also the talented developer of the Jcapper racing data base software.
As the webmaster of playersboycott.com and the HANA website--as opposed to the HANA blog and Jcapper product sales and support website--Platt has evolved into perhaps the sport’s most influential horseplayer advocate.
He is already the most inspirational as was demonstrated at the paceadvantage.com forum when his commentary on that chat room helped lead to the creation of HANA and more recently by his contributions at playersoycott.org that took no prisoners in Louisville despite his mild-mannered demeanor while delivering data-driven handle analysis before California Horse Racing Board commissioners.
Members of the CHRB board later emphasized how civil that meeting turned out to be--but failed to give any indication that there was some actual progress in addressing the issue of optimal takeout rates.
If there's anything that could prove as debilitating as kryptonite it's Platt’s advocacy for lowering takeout through rebates rather than lowering rates across the board for the benefit of all. A level parimutuel playing field is as vital to the industry’s health as effective uniform drug rules.
Rebated players are generally immune to takeout hikes but increases in California and at Churchill Downs went to purses rather than result in larger margins ADWs could share with select clientele. Both those boycotts legitimately sought relief for all players. It remains to be seen, however, whether any rebated player would vigorously support a boycott for fear of losing the edge those players hold over their parimutuel rivals.
Another long-time advocate of rebating also made news recently while supporting the continued use of Lasix with a weight penalty applied. Jerry Brown
, President of Thoro-graph, claimed a personal handle of “seven figures” annually, and estimated that 10% of players now generate 90% of handle.
If this is true then racing not only is no longer a sport but neither is it a fair game. More than in the past, betting on horses has become an investment vehicle for predatory deep-pocketed professionals; a currency shredder for everyone else.
Think about it: Is "90/10"% sustainable in the long term? This ratio suggests a drop in player participation, as troubling as the decrease in the foal crop.
Racing is viable on its biggest days but what about the rest of the time? More and more, recreational bettors are turning away from high-cost, low-quality product racing and the incredibly shrinking small-fields racing.
If recent handle declines at Del Mar and now Santa Anita is any indication, California's isolation will force them into weekend-only racing scenario sooner than other major league venues: New York and Florida are likely to benefit most from any consolidation in California or elsewhere.
Sadly, the obstacles to reform are no longer limited to the traditional public and private fiefdoms but extend to today's powerful pari-mutuel predators. Rebated whales and their enabling ADWs are today's barbarians--and they reside inside the gate.
If racing were truly civilized, the continued pursuit of larger portions of a shrinking pie would be replaced by a cooperative effort to grow the pie. A central authority committed to leveling the playing fields of both horsemen and horseplayers is the obvious solution.
Will the real Clark Kent please stand up.
Written by Indulto
Saturday, September 06, 2014
Standing Up for Horseplayers Everywhere
OLDSMAR, FL, September 1, 2014—Watching and wagering in air-conditioned comfort while my wife enthusiastically engaged the tropical humidity of a Tampa summer elsewhere, I couldn't help wondering why horses were still forced to compete when and where the weather is inhospitable to both man and beast.
As I lounged, listening through my laptop, my fellow horseplayer advocate and friend, Andy Asaro, stood in front of the California Horse Racing Board (CHRB) last week and experienced how difficult it is to effectively deliver a message challenging the status quo; particularly as an individual--an independent one at that.
The experience led me to conclude that chilly receptions for some horseplayers aren't just limited to wintertime. It's not easy being a stand-up guy.
Imagine yourself trying to clearly and comprehensively communicate multiple aspects of a complex issue within three minutes before answering questions from your audience, some of whom probably preferred that you hadn't showed up in the first place.
Now suppose those questions came from someone that had little official standing in the proceedings or a stake in its outcome; how do you think this would all shake out?
Usually in these cases the speaker would be ignored, but even the CHRB knew better than to say nothing, not in the wake of the recent boycott of Churchill Downs, an action that succeeded in denying CDI's highly-compensated executives as much revenue as the previous year when takeout was extracted at a lower rate.
The CDI team made their intended “killing" on the Kentucky Derby/Oaks weekend but then witnessed a major fall-off in handle for the remainder of the meet.
In California, it’s the Thoroughbred Owners of California (TOC) that controls takeout rates, not the racetracks.
Asaro got his message across. However, the response he received exposed the CHRB’s apparent disinterest in, if not incapacity for, dealing with the issue of optimal takeout rates despite its potential to horsemen, the state, and horseplayers.
You can listen to that portion of the meeting which occurs near the beginning of Segment A of the CHRB meeting chive for 8/21/2014
In a dramatic moment, CHRB commissioner and former TOC board member Madeline Auerbach expressed concern that manipulating the takeout numbers might cause people whose money, lives, and careers were invested in racing to go out of business.
When Asaro asked why she anticipated that result, Ms. Auerbach indicated that she didn't know for certain but suggested his own conclusions were no better.
The problem here is that Ms. Auerbach's comments appeared to contradict both the CHRB's mission statement and her own stated goals while serving as a TOC director. The former
includes such concepts as "… regulating pari-mutuel wagering for the protection of the public ..." and "promoting ... wagering opportunities."
mentioned "increasing the handle" and "making the racetracks more fan friendly environments."
Surely, Ms. Auerbach is aware that horsemen are not the only participants invested in this game. Bettors also invest their money, their lives and their careers pursuing the game and are just as entitled to a fair gamble and return as owners.
Since decreasing handle pits owners against players in the never-ending struggle for larger slices of the wagering pie, growing handle is essential to the best interests of all stakeholders.
Lower takeout and larger field sizes have historically attracted more handle but California racing’s leadership is either unable or unwilling to apply the best elements of those principles.
The result is that fewer people stay interested and potential new players instead find alternatives that separate them from their money at a slower rate.
Clearly, it is more difficult for bettors to come out ahead unless they receive rebates on their wagers – win or lose. That not only is unfair, it’s unsustainable.
How "fan-friendly" can an environment that subsidizes professional players and powerful horsemen at the expense of rank-and-file bettors be? What percentage of the population view six-horse fields with heavy favorites as desirable betting opportunities?
Ms. Auerbach’s demand that Mr. Asaro ‘guarantee’ that optimal takeout would improve the situation for all participants was amusing considering that the CHRB in 2011 failed to demand that added takeout rates when applied to purses would guarantee field size would increase.
It was rumored that the Board might invite Jeff Platt, President of the Horseplayers Association of North America, to work with them on this issue. That could be a very good thing if done in an open forum including non-rebated bettors and players outside of HANA.
Had Asaro not stepped forward forcing the issue publicly, this possibility likely would never have reached even the rumor stage. Until learning otherwise, I'll assume such a move was meant to delay any meaningful takeout-rate reductions.
I have admiration for player advocates such as Asaro, Platt, Barry Meadow, Dr. Caroline Betts and the late Roger Way; all of whom answered the call to face off with California racing's power elite in 2011 after takeout rates were increased for exotic wagers.
I might not agree with each of them on all facets of the issue but I know that if I support individuals like them, eventually we will see an industry that treats all of its customers with greater respect and fairness.
I cannot help but think that the CHRB and TOC are really concerned that the upcoming fall meet at Santa Anita will suffer a fate similar to that of Churchill Downs in the spring. Santa Anita may be even more vulnerable because its big days occur later in the meet.
It is no longer difficult to motivate bettors of California racing to ignore unappetizing wagering propositions created by short fields, high takeout and questionable medication policies and enforcement.
Should there be another boycott, I have some slogans at the ready:
. Let them learn to let us churn
.Go betless until the equine stars come out
.Save your scratch for Super Saturday and your bread for Breeders' Cup.
Written by Indulto