Thursday, January 28, 2016
Seminole casino deal could push decoupling to back burner
The contentious issue of decoupling pari-mutuels and slots and card rooms is on Florida's legislative agenda again this year but it is liable to get pushed aside by a bigger gambling debate, a new casino compact with the Seminole Indians, which promises the state $3 billion over seven years. However, decoupling isn't going away.South Florida's dog tracks have a backdoor strategy to rid themselves of greyhound racing.
MIAMI, Jan. 28-2016--Floridaâ€™s thoroughbred industry, which has marshaled its efforts and built cross-breed alliances in a rare show of strength against decoupling, can probably take a breath. Unless years of legislative precedent are abandoned, there is little chance decoupling will be approved during the current legislative session.
But the breath can only be a short one. The issue is sure to keep coming back.
Florida lawmakers traditionally meet in March and April. To get out of the way of the presidential primaries in March, they are convening in January and February in 2016. The prevailing attitude among lawmakers when it comes to pari-mutuel issues always has been, get everyone to agree on a clean bill, bring it to us and weâ€™ll pass it. We are not going to referee intramural squabbles.
There is little chance of a clean bill in the short term because of how decoupling--allowing South Florida pari-mutuels to keep their card rooms and slots operations without staging dog, harness or quarterhorse races or jai alai gamesâ€”has split the industry. The pari-mutuels other than Gulfstream are all in on decoupling. Since theyâ€™ve introduced lucrative slots and card rooms, their former businesses are considered a nuisance and a big money loser, if they can be believed. Creative bookkeeping can produce any outcome you want.
The horse industry has assembled a formidable coalition of Gulfstream, the national and local HBPA, breeders, the American Quarterhorse Association and standard bred organizations in opposition. The Ocala Star Banner has editorialized against decoupling. Thatâ€™s a cacophony of loud voices the legislature doesnâ€™t want to hear.
This is especially true inasmuch as decoupling is a small line item in a big picture, debate over a new gambling compact with the Seminole Indians, which promises the state $3 billion over the next seven years. Decoupling promises zero dollars.
The compact negotiated by Gov. Rick Scott has not been universally embraced by lawmakers for the usual reasonsâ€”religious groups against what they see as an expansion of gambling, DisneyWorld corridor businesses fighting anything with the potential to pull dollars out of their neighborhood and the usual partisan politics.
The debate has the potential to be so rancorous that some are predicting it will be put aside for a special session so that typical legislative business can be tended to during the regular session. With all the wrangling expected, lawmakers are unlikely to want to make another divisive issue a part of the deal this year, even in a special session. So the issue could be tabled until at least 2017.
A lot of hysteria has been generated about decoupling eventually leading to the end of thoroughbred racing in Florida. I donâ€™t believe this, as I wrote in a previous column. Thoroughbred racing means too much to the state in terms of revenue, tourism and maintenance of green spaces.
However, I have come to appreciate the horsemenâ€™s fears. There is universal agreement that as long as Frank Stronach is running Gulfstream Park, there is no chance thoroughbred racing will be pushed aside. However, Stronach is 83 and mortality is a reality for all of us.
Horsemen reasonably ask what happens when Frank is no longer around. Supposedly, there is a succession plan in place but trying to find out what it is elicits the same reaction as asking Donald Trump for a detailed position paper on any issue.
Andy Stronach appears to be the crown prince. However, in the wake of his Sweepstakes 6 brainstorm at Portland Meadowsâ€”formless culls racing two furlongs to build huge jackpotsâ€”Iâ€™m affording a lot more credibility to the doomsday scenario horsemen have created for life after Frank.
Suppose Churchill Downs were to buy Gulfstream to expand its casino footprint in South Florida. What used to be Calder provides all the evidence needed about CDIâ€™s attitude toward racing. Five years ago, people would have scoffed at the notion of the abandonment of racing.
It wouldnâ€™t have to be Churchill. Any number of mega-casino corporations with no regard for racing could bid for Gulfstream for its casino license only.
That said, Gulfstreamâ€™s objection to decoupling has little to do with the preservation of racing and a lot to do with the preservation of its casino. Gulfstream is against decoupling out of fear that the other pari-mutuels, especially Mardi Gras Casino (formerly Hollywood Greyhound Track) right up the road, will use the money that now goes to purses to create incentives and perks to lure slots players from Gulfstreamâ€™s casino.
If the non-thoroughbred pari-mutuels are relieved of the obligation to stage races and games, it will de facto create six new stand-alone casinos in South Florida to operate against Gulfstream. This is in addition to the fabulously prosperous Seminole Hard Rock Casino. Their advertising and promotion dollars will go 100 percent to touting their casinos while Gulfstreamâ€™s marketing budget will be split between racing and its casino. Racing could come out on the short end of that.
Itâ€™s revealing that Hollywood Greyhound Track now goes by the name Mardi Gras Casino; Flagler Dog Track is now Magic City Casino; Pompano Park Harness Track is now The Isle Casino and Miami Jai Alai is now Casino Miami.
The South Florida greyhound tracks feel they have a pocket ace. Izzy Havenick, the third generation to run what was Flagler Dog Track, has been quoted as saying if the legislature doesnâ€™t give the greyhound tracks decoupling, they will go at it another way--a referendum to outlaw greyhound racing as cruelty to animals.
Consider the gall of that. Nevertheless, Hecht expressed confidence, probably well founded, that this would easily pass with voters, just as it did in Massachusetts in 2008.
But the dog tracks will be running a gamble that could backfire. Iâ€™m sure their thinking is, if dog racing is outlawed, they can go to the legislature and say, â€śWhat can we do? Our hands are tiedâ€ť and plead to be allowed to stay in the casino business. Granted this would be like a child murdering his parents then asking for mercy because he is an orphan. But considering what Florida is allowing Churchill Downs to get away with at Calder, theyâ€™re probably right.
But itâ€™s not a sure thing. The other South Florida pari-mutuels and the Seminoles could pour millions into lobbying efforts to rid themselves of a couple of competitors by getting lawmakers to tell the former Flagler and Hollywood dog tracks, â€śYou made this bedâ€¦.â€ť
What a delicious possibility.
Written by Tom Jicha
Thursday, January 21, 2016
$12 million race? Why not $100 milliion? Neither is going to happen
Frank Stronach thinks big. It's one of his virtues. But he doesn't always think things through. His proposal for a $12 million race is unworkable in countless ways. Maybe it's just a distraction from the National Racing Club Sweepstakes 6 in Oregon, the worst idea ever inflicted on thoroughbred racing.
MIAMI, Jan. 21, 2016--Frank Stronachâ€™s ideas fall into two categories: brilliant and visionary or â€śwhat is he thinking?â€ť
Rebuilding Gulfstream as part of a vast entertainment and shopping complex and keeping the track operating year-round falls mostly into the first category. The track is doing magnificently, the bars and restaurants are doing mostly OK but the retail stores are struggling, largely because they are within walking distance of one of the grandest malls in Florida, Aventura. This should have been considered in advance but Stronach is a big picture guy, who rarely gets into details.
This is at the heart of the issues with his latest grandiose scheme, a $12 million race in January at Gulfstream or Santa Anita. He announced the idea at a Thoroughbred Owners Conference last week, part of Eclipse week at Gulfstream. Plaudits to him and the Gulfstream staff for elevating the Eclipse Awards from one night in a hotel ballroom into a week of festivities.
Maybe Stronach wanted to make a splash in front of potential new blood in the game or maybe he just wanted to steer the conversation away from the godawful National Sweepstakes 6 at his Portland Meadows track. It's astonishing that only now are racing officials beginning to realize that races with horses all owned by the same entity, Frank's son Andy, whose stated goal is to create life-changing jackpots, is not the best idea for the sport.
The $12 million race, under the terms he unveiled, has as much chance of coming to fruition as the twin hotels he promised to sandwich around the Gulfstream grandstand and the elaborate water theme park in the north parking lot. That is to say, no chance.
What would be the worldâ€™s richest race is clearly Stronachâ€™s attempt to top Dubaiâ€™s World Cup. But while the World Cup is funded by the black gold being pumped out of the desert sands, Stronach is proposing that 12 investors fund the event by purchasing shares at a million bucks apiece.
This would give them the right to enter a horse in the big race and share in 70 percent of any profitsâ€”Stronach keeps 30 percent-- generated by TV rights, sponsorships and the betting handle on the race. This is where Stronach went off the rails.
Peeling $1 million off a bankroll without knowing if you would have a horse good enough to race in such an event is not something a lot of horse people are going to be anxious to do, even with the opportunity to sell or assign the starting berth. Using the standard purse distribution model, a horse would have to run no worse than third in the projected 12-horse field for the shareholder to recoup the investment.
The purse would be the only means of recouping anything on the investment. The race would have to handle more than double the Kentucky Derby to generate the $12 million purse from the trackâ€™s share of the takeout.
Television pays a rights fee for the Triple Crown events because they draw millions of eyeballs. Otherwise, racing has to pay TV, directly or through guaranteed commercials, to get coverage. Scheduling would be a challenge with football bowl games and NFL playoff games dominating TV on most January Saturdays. No ratings, no rights fees and no big commercial rates.
This is also the period on the calendar when the previous yearâ€™s thoroughbred stars are laying up between seasons or have already headed to the breeding shed.
The gargantuan purse might induce some owners to keep a horse in training but luring a dozen worthy of a race with such an unprecedented payoff is more wishful thinking than reality. Forget Euros. Theyâ€™re back home hibernating in their winter coats. Itâ€™s more likely you would wind up with the equivalent of the Halâ€™s Hope for about 80 times the purse.
Stronach could make just as big a splash by bumping up the purses of the Donn Handicap at Gulfstream, the Big Cap at Santa Anita and the Pimlico Special at his Maryland property to $2 million apiece with a $6 million bonus for a sweep. This would have the added appeal of diminishing the big race in Dubai by keeping the American stars at home. Thanks to the worldwide collapse of the oil market, the World Cup might not be around too much longer anyway.
A classy show
Getting back to the Eclipse Awards, the industry can be proud again of the polished show race track people, most of whom are not regularly seen or heard on TV, presented. Jeannine Edwards, one of the few with extensive TV experience, has become to the Eclipse Show what Billy Crystal used to be to the Oscars.
She kept the show bright, breezy and moving despite not always getting cooperation from the winners. Immediately after she prefaced the presentation of awards by making a plea that winners not filibuster by thanking everyone they have ever met in racing, the first honoree went ahead and did just that. Thankfully, most of the other winners played by the rules. If they hadnâ€™t the show would still be going on.
The only segment that dragged was Jay Hovdeyâ€™s moving but long-winded tribute to Award of Merit recipient Leonard Lavin of Glen Hill Farm, who wasnâ€™t able to attend.
James â€śMattress Macâ€ť McIngvale was characteristically less than gracious in failing to recognize Maria Borell, who trained his Sprint Champion Runhappy to five consecutive wins, including the Breedersâ€™ Cup Sprint. His boorish behavior was a surprise only to those unfamiliar with him.
However, the enduring memory of the night is Team American Pharoah being summoned to the podium five times yet finding something appropriate to say on each visit. Classy horse, classy people, classy show.
No more free parking in Vegas
Horseplayer advocate and friend of HRI Andy Asaro alerted me to a piece in the Los Angeles Times that reveals a number of hotels on the Las Vegas Strip plan to start charging as much as $10 per day for parking.
The hotels that have come out in support of this plan are the Aria, Bellagio, Circus Circus, Delano, Excalibur, Luxor, MGM Grand, Mirage, Monte Carlo, New York-New York and Vdara.
I can see the higher end hotels, where pricing is not an issue with their well heeled clientele, getting away with this. However, I suspect the more moderately priced hotels, where prices are part of the appeal, such as Circus Circus and Excalibur will take a steep hit.
Other properties are undoubtedly waiting to see how this trial balloon floats before deciding if they will take part in this price gouge. Another factor could be if every hotel on The Strip suddenly, after free parking forever, decided at the same time to introduce a fee, they could be facing the mother of all anti-trust price fixing suits.
The only hotels who have said they have no plans to charge for parking, according to the story, are the Venetian and Palazzo.
This could turn into a bonanza for off-the-Strip hotels such as the Station properties, the Orleans and South Point (which is on Las Vegas Blvd, but well south of The Strip). Horse players especially could be expected to gravitate toward racebooks where there is not what amounts to a $10 cover fee.
This comes a few years after the furor over another consumer fleece, resort fees. These hidden charges, which range as high as $25 per day for things that used to be free, including parking, started at a few hotels and has now spread to just about all of them. I fear this will be the case with the parking fee as well.
Written by Tom Jicha
Thursday, January 14, 2016
Jackpot bets could bring the end of racing as we know it
First there was the Pick 6. This begot the Rainbow 6. Unfortunate byproducts of both were stakes races being moved out of their featured positioning because they had an overwhelming favorite or not enough entrants to bolster the number of possible combinations. The trend has hit rock bottom with a new wager in Oregon in which quality and form are undesirable. Horses unable to compete at mainstream tracks, conditioned by trainers who can't attract clients and ridden by novices, are racing in six two furlong dashes with the goal to build a lottery-like jackpot. If it builds the bottom line, the incentive to attract better horses with higher purses will no longer exist.
MIAMI, Jan. 14-2016--Thoroughbred racing Armageddon has erupted at Portland Meadows . It could be coming to a track near you.
The Oregon facility has created a new jackpot bet that (hopefully) brings chasing-the-dream wagers to their nadir. The de-evolution from Pick 6 to Rainbow 6 to now National Racing Club Sweepstakes 6 is hopefully complete.
Other pie-in-the-sky wagers were manageable through solid handicapping. The Sweepstakes 6 is all but impossibleâ€”by design. The idea is to make the races so difficult to handicap that you might as well just pick numbers, like playing the lottery.
This could be the least of the problems for racing because of the way the bet is constructed. Portland Meadows will run six races with 12 horses in each after its regular Monday cards. This, of course, is for starters. If the Powerball-rivaling bet catches on, itâ€™s 1-to-9 to become a daily fixture.
The horses who will be competing, the trainers â€śconditioningâ€ť them and the jockeys aboard them invite tragedy, which will tarnish the entire sport, even though the relationship of the Sweepstakes 6 and traditional horse racing is virtually non-existent.
The thoroughbreds, which have been purchased en masse by Portland Meadows, have been culled from herds of horses who can no longer compete even at the lowest claiming levels on regular racing circuits. In many cases, this means animals with serious infirmities, making them candidates to break down with their next stride.
The races for a purse of $3,000 will be two furlongs. Laymen might think the short distance isn't too demanding. In reality, the necessity to run hard every step puts more stress on a horse than longer races in which they don't have to run full-out for at least part of the trip.
These slow and broken down animals will be prepared by trainers having trouble getting clients. Someone who canâ€™t attract horses at Portland Meadows is probably a wannabe, who should be in another line of work. They will be ridden by novice jockeys trying to break into the game.
To summarize, a dozen horses on their last legs, trained by wannabes with unskilled riders aboard will break balls to the wall from the gate. I cringe to think of what might happen. The likelihood of carnage is so great, The New York Times might station a full-time reporter at the track. You can be sure PETA will be monitoring closely.
Bettors also will be taken for a debilitating ride. The track will assign horses to each race so that there are no obvious favoritesâ€”i.e., singles. The goal, of course, is to build an attention-grabbing jackpot as quickly as possible.
It shouldnâ€™t take long. If Portland Meadows can find 72 horses who can walk to the starting gate without breaking down, there will be almost 3 million possible combinations. (2,985,984 to be exact, according to my calculations.) With a base wager of 20 cents, it would take about $600,000 to cover the board.
The takeout is an outrageous 22 percent but thatâ€™s only the start of the horse player abuse. If there isnâ€™t a single ticket winner, 40% will be carried over to the next Sweepstakes 6.
For round numbers, letâ€™s say $10,000 is bet. The 22% takeout skims this down to $7,800 to be returned to bettors. Subtract another 40%--$3,120--for the carryover and only $4,680 is left to be paid to winners. Thatâ€™s an effective takeout of more than 53%. State lotteries are a bargain in comparison.
If, God forbid, the Sweepstakes 6 catches on, racing as we know and love it will be on a slippery slope to oblivion. Once tracks realize they can bolster their bottom lines by rolling out bottom-of-the-barrel horses for minuscule purses and fans will respond the way they do to Powerball, the incentive to attract better horses with higher purses will dissipate. Breeders should shudder.
We should have seen this coming once Grade 1 races started getting relegated to the early races on the card because they had an overwhelming favorite or a short field, both of which decrease the number of reasonable combinations in the jackpot bets.
Coincidentally, even before I became aware of the Sweepstakes 6 I was going to comment this week on where jackpot bets are leading. The catalyst was last Saturdayâ€™s card at Gulfstream, which introduced an early Pick 5 this season.
Gulfstream generally makes an effort to card races for the better horses on Saturdays. But this seems to be on its way out. Last Saturdayâ€™s sequence included a pair of $12,500 maiden claiming races and an open $6,250 claimer, which is where most winners of $12,500 maiden claiming races go. These are horses who are candidates to be bought and shipped to Oregon for the Sweepstakes 6.
To illustrate how impossible these races are to handicap--which is the idea--even with the Marshuaâ€™s River included and Sandiva winning at even-money, no one was able to pick five. There is no carryoverâ€”executives at Gulfstream are probably wondering how they let this happen--so four out of five paid $584.
This emerging emphasis on creating lottery-like payoffs over quality racing might be good for race tracks' bottom lines but they are bad bets for players and have the potential to sabotage everything there is to love about the sport.
Written by Tom Jicha