Indulto

"Players Up" blogger Indulto is a retired computer programming residing in SoCal and has been betting Thoroughbreds since the days of Kelso, cashing his first ticket at Saratoga while in college.

Indulto is well known in racing's cyber world as a participant on the Ragozin Sheets message board, the PaceAdvantage Forum, Paulick Report, and has made important contributions to the industry's audience as an HRI Readers Blog contributor.

Indulto was active in the formation of the Horseplayers Association of North America and with former HANA colleagues worked on the Players' Boycott of California racing when takeout rates were increased by the legislature there.

Taking his nickname from the King Ranch color-bearer of the 1960s, Indulto now devotes his time to advocate for the recreational player and hobbyist, but prefers lower takeout rates for all rather than subsidized rebates for the few.

Indulto supports the creation of a centralized racing authority to establish uniform rules for racing and wagering and for those standards to be enforced consistently.

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Monday, August 06, 2012


On the Backside or Frontside, Racing’s a Numbers Game


In an era where horses struggle to compete at classic distances, the 9-furlong Haskell offered three-year-olds the best first post-Triple Crown opportunity for a Grade 1 win and a million dollar purse.

You’d think trainers would be lining up at the entry box but this year’s renewal, won by Paynter, attracted only 6 starters; hardly a vertical exotic player’s dream and a surprising disappointment to the leadership of the horseman-operated Monmouth meet struggling to stay solvent.

The Grade 2 Jim Dandy at Saratoga, run the same weekend, historically has cannibalized the Haskell field. But now that NYRA also cards the ungraded Curlin at the same distance as the two graded stakes, fields shorter on quality and entrants is virtually guaranteed.

One thing seems certain; without slots revenue to fuel purses--a situation to which NYRA could revert—all tracks will have to alter their strategy for funding marquee events.

In a breakthrough if not breathtaking announcement, Churchill Downs introduced a change to the eligibility criteria for its Kentucky Derby. No longer would earnings determine which horses entered the Derby starting gate. Rather, performances in fewer qualifying events regardless of purse size will determine eligibility.

Stronger fields are the expected result for an event in which field size is now never less than excessive. No other race enjoys such urgency of participation among horsemen. It remains to be seen how the purses of the impacted preps will be affected in the future.

However, it’s the relevance of the established system for grading stakes races that is the real victim of CDI’s ground-shaking edict. Indeed the current process is a controversial, subjective one where the quality of competition in actual races is not as important as subsequent performances in fields that may have been diluted by injury and non-cooperative scheduling.

Although perhaps suitable for juveniles, current grading is a better tool for breeding than handicapping--or for qualifying performances for either race eligibility or Eclipse awards.

I can’t argue with those who feel there are too many graded events for the good of the game, especially in the light of steep declines in recent foal crops. If there were a National Horse Racing Commission (NHRC), it could trim the fat from stakes schedules more equitably and eliminate divisional conflicts.

Absent that, the answer may be to ensure that horses are rewarded with purses and graded-based rankings that more accurately reflect what actually happened on the track, and which horses showed up to compete.

We could start by reducing the purses of all graded stakes to the minimum for its current grade and then increment it by an amount assigned to the highest [and/or latest?] graded-stakes Win-Place-Show performances of each entrant.

Now, suppose any stakes race for older horses could receive an automatic upgrade effective when the starting gate opened for a full field of graded-stakes winners with a specified minimum number of winners at levels above the original grading for the race?

Further suppose that any graded stakes race would similarly receive an automatic downgrade if no graded stakes winner at the original level or above were in the field?

With some adjustment, such a system could maintain itself without questionable choices by a committee of breeders. If the horses won’t go to the mountain to compete, let the mountain come to where they will compete and when.

Where is it written that excess leads to success, anyway? Graded stakes aren’t the only races suffering from small field sizes, but motivations differ between connections of horses seen to still have a future and those whose horses only have a present: One could argue that the likelihood of increasing field size by increasing purse size is inversely proportional to the value of the horses involved.

There is increasing evidence suggesting excess leads to even more excess. The industry is awaiting results of a study of breakdowns in low-level claiming races whose purses were elevated by slot subsidies to nearly 5 times their claiming price. The fear is that such reward relative to risk reduces inhibitions to run horses of questionable soundness.

That spotlight on subsidies to horsemen should be shared by subsidies to horseplayers through rebates on wagers placed predominantly on non-stakes races, if only due to their overwhelming numbers: Non-stakes handle is dependent upon racing’s core customers, i.e., the dedicated, the determined, and the deep pocketed; whereas stakes races attract media attention and recreational handle as well.

Excessive takeout, excessive purses, and excessive margins awarded to off-track bet-takers have combined to destroy what was once a symbiotic relationship between horsemen, track operators, and horseplayers. By failing to maintain the delicate but workable balance between takeout, handle and purses, racing’s “leadership” has already lost several generations of customers.

Excessive direct takeout rates enable off-track bet-takers to play Robin Hood in reverse, i.e., rob the “poor” to give to the “rich.” The practice of rebating players selectively based on their wagering volume (and/or state of residence) is based on the premise that a smaller piece of a larger pie is more profitable to the bet-taker. Few foresaw that the pie would eventually shrink because players either fell off the tilted playing field or were turned off by it; never to return or be replaced.

If direct takeout were equally lower for all bettors, more money would be returned to all winners in the form of higher pari-mutuel payoffs. What’s happening instead is that some players are being rebated an amount reflecting a portion of the high direct takeout on their wagers which is “returned” whether the bet itself wins or loses.

The benefits to those recipients are at least five-fold: 1) the effective takeout rate is lower on their wagers, 2) the effective return on straight wager investment is higher, 3) more exotic wager combinations can be purchased for the same actual outlay, 4) there is always something left to churn the next time and 5) a marginally unprofitable player might be turned into a profitable one.

The practice is defended --by its beneficiaries as well as its enablers -- as discounts on volume purchases to their best customers and with claims that the overwhelming majority of players are not profitable anyway.

A friend of mine sees the categories of winners and losers as being in a state of flux--containing most players at one time or another. Such statistics are somewhat dubious. When it’s “winning time,”, whether the game is slots, sports, craps, cards, or Thoroughbred racing, one wants the full benefit of ending up a winner.

Written by Indulto

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Wednesday, July 25, 2012


What We Have Here Is an Opportunity to Communicate


By Indulto

An on-line petition is being circulated requesting the U.S. Senate to establish a National Horse Racing Commission (NHRC).

The driving force behind this effort is Sean Kerr, who is listed as the Interim Executive Director, Bladerunners: National Horse Racing Commission Movement.

The following passage appears in the petition:

"The purpose of establishing NHRC is to protect all those that are involved in this sport. That includes owners and trainers. Many trainers come under scrutiny for violations, where in another state it may not be so. This causes confusion among ranks and damage to their reputations and livelihood. This contradiction within the system causes failure for viability and protection. This must change.

With a NHRC in place all jurisdictions will fall under the same rules; it will level the playing field. We believe that fairness in business and all transactions has the utmost value to bring the sport of horse racing into a modern model of sportsmanship and clean competition...”

My concern here is the possibility that racing's customers are once again being left out of the equation. A friend of mine closer to the situation has assured me that "level playing field" and "fairness in ... all transactions" is intended to encompass wagering as well as racing, but as my mother always told me: "Be sure to get it in writing."

The Senators and the witnesses attending the recent hearing on "Medication and Performance Enhancing Drugs in Horse Racing" may actually support the concept of uniform rules of racing and wagering with harsh penalties for violators that are enforced consistently, but there is little uniformity of opinion as to what those rules and penalties should be.

Banning race day medication has become an issue as contentious as Obamacare. "Put the horse first" may be the rallying cry of reformers, but "make the horse finish first" is the cheater's mantra.

Like some of the owners and trainers in control of racing now, there are some horseplayers who are also vested in the status quo. For them, "No news is good news" and the best change is none at all. It's the little guys among owners, trainers, and players -- forced to compete on playing fields tilted toward deep pockets -- that need to be organized to collectively influence a correction through strength in numbers. The petition authors may not appreciate how much all have in common.

While some racing participants seek Federal intervention, in New York State the Governor has decided to intervene in the operation of the New York Racing Association based on takeout "irregularities" that involved overcharging takeout and underpaying winning bettors by a total of $8.5 M over a 15-month period. So far no petitions have appeared in NYRA's defense, even though their loudest critics were those in charge of oversight bodies charged with preventing such fiascos.

If the wayward Hayward was the monkey that spoke no evil (but keyed it), then the ornery Sabini and the angry Megna were the state-appointed sapiens who neither saw nor heard any: The former claimed it was simply an oversight, but the others demonstrated spectacularly that they didn't provide any.

Indeed, this joint commission to control the criminally clueless - if not the crooked and corrupt -- were caught napping on the job.

Consider: Was the situation scandalous? Yes. Did it involve betting? Yes. Did winning bettors lose money they should not have? Yes, but the practice of rebating high-volume bettors at the expense of players without such subsidies has the same effect (and more than 1% worth); a fact ignored by racing regulators and operators for the benefit of the perpetrators.

Enabling professional gamblers to "Beat the System" while destroying the game is the real betting scandal.

I tried to find the member of the news media who first tied that term to the thwarted takeout termination uncovered finally, if not snappily, by DiNapoli. Googling '"betting scandal" NYRA' proved inconclusive, but it did reveal the term's most frequent repeater, "reporter" Adam Sichko of "The Busness Review" at bizjournals.com.

This prolific columnist's audience appears widened by references and links in "The Capital Business Blog," "World News, Inc.," "buzzbox.com," "Sports Betting Review," and others. After reading his related columns in chronological order, the uncharitable among us might equate his unquestioning and unchallenging articles on the State's takeover of NYRA to administration press releases.

Whatever his agenda, Mr. Sichko's coverage appears to have played a significant role in promoting the public's acceptance of the Administration's actions against the association.

Regarding new NYRA board appointments, only the "NY Post" seems to have a source within the administration. Frederic Dicker reported that the existing board and executives will continue until the end of the Saratoga meet.

"The source said Cuomo's office has been flooded with experienced racing hands interested in being appointed to the board. State Operations Director Howard Glaser is coordinating the appointment process," and that "the governor's office has heard from about 200 experienced racing executives interested in that post."

Also, according to the source, "We're getting interest from people around the country, and the selection won't be limited to New Yorkers."

"These are people interested in becoming part of the New York family, and it may make sense for us to have expertise from people from other states."

"The hope is to bring entirely new blood onto the board, people who perhaps know more about horse racing outside New York rather than the current group that's been very insular."

"There are some former executives from Churchill Downs [in Kentucky], as well as other prominent racing venues."

One can only hope the above reflects the Governor's intent to work cooperatively with other jurisdictions to develop model rules with best practices from all venues for conducting racing and wagering in New York; one that other states would also be willing to adopt in lieu of Federal intervention.

If Mr. Kerr were to read this, perhaps his organization could persuade Congress to mandate the formation of an NHRC board as a rotating representative body from racing states to facilitate joint action toward uniformity with funding from those states.

Like the UN Security Council, there could be permanent members; CA, FL, LA, KY, and NY, as well as multiple rotating member tiers completing [as an example] a nine-member board, with three members from AK, DE, IL, MD, NJ, and PA, and one from AZ, IN, MA, MN, MS, NM, OH, OR, TX, VA, WA, WV, etc. All states would be kept in the loop for input and ratification.

When the model is proven workable, the Federal government could then use the IHRIA to mandate its implementation in all states with enforcement by a commissioner who would serve at the pleasure of the NHRC board.

Once the Federal government is willing to act, it should also make it legal for adult residents of any state to wager on-line -- at least in the privacy of one's home -- on races at any racetrack at a direct and effective takeout rate which is the same for all pari-mutuel pool participants

Written by Indulto

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Sunday, July 15, 2012


Where is Press Spotlight on NYRA Board Appointment Process?


By Indulto

Blogger Tom Noonan has emerged as the leader of opposition to, and foremost critic of, the state's takeover of NYRA. His first piece on the subject, "Something Fishy About NYRA Controversy" from May 18th, provides a valuable and objective history of the events resulting in the takeover of NYRA by New York State government.

His ongoing series on the topic continued on May 30th with "'This is integrity for New York racing,” in which he wrote,

"If threats and intimidation were not enough, the Governor and his allies found a media all too eager in the effort to portray a NYRA that is "institutionally rotten" or one that has "veered from scandal to criminal scandal." While there are those naive souls who think the Fourth Estate is an essential check on the abuses of government, some in New York's print media have too often been a lazy and complicit abettor."

He later added, "We have a media that has gone along all too willingly, either because they do not want to ask rather obvious questions, or because NYRA has become a convenient punching bag."

Yet in his first article he appeared to single out a possible exception to the media cheerleaders he condemned: "I had initially decided to write a post on the NYRA issue when I read the report in Friday's Saratogian by Paul Post (who is a conscientious journalist and doing an excellent job reporting this ) that the Governor was considering adding more state-appointed members to NYRA's Board. My only thought was "are you kidding me?" As someone who spent an entire career working for government, I am not one of those who reflexively reject government involvement. But ..."

I wonder if Mr. Noonan would be as complimentary of Mr. Post’s work of July 3rd, "Source: Familiar names floated as possible NYRA Reorganization Board members." In it, he included 43 names that MIGHT BE under consideration for voting positions according to a source he did NOT identify. They are "potential board candidates, a source close to the process said.

"These are names I came up with after discussions with racing, gaming and political officials," the source said."

Included are current and former 1) judges, 2) elected officials, 3) political appointees, 4) elected politicians, 5) other attorneys, 6) harness racing executives, 7) OTB executives, 8) horse owners (thoroughbreds?). 9) a trainer, 10) a jockey/jockey agent, 11) a track announcer, 12) a former executive for a losing racing franchise bidder, and 13) two current appointees to racing oversight positions.

Interestingly, 40 of those same names were previously included in a similar article, "NYRA board suggestions". Author David Lombardo actually identified the source of those "suggestions" in his June 23rd piece:

"Gary Greenberg, a minority owner of Vernon Downs [harness track] who is familiar with statewide gambling issues and predicted the details of the state takeover, came up with an extensive list of names he thought would be appropriate, ...

... His list also includes representatives from most racing, breeding and gambling organizations in the state.'I think the appointments will be non-political," Greenberg added. "The more likely names ... have a connection to racing.'"

After perusing all the names presented in both pieces along with their current/former positions (but not how they might contribute going forward), the cynical among us might speculate that Mr. Greenberg was the source for both articles with an agenda to pack the board with other than thoroughbred racing interests at best, and historical NYRA adversaries at worst.

If so, it would appear that Messrs. Lombardo and Post made media mountains out of this molehill; manufacturing misdirection, if not misinformation, in the process.

Mr. Noonan's challenges to Governor Cuomo’s actions and motivation continued in his subsequent pieces, “Something fishy about NYRA controversy - Part 2” from June 8th, and "Transparency’ for New York racing?” on June 18th, are also worth evaluating even by the most ardent supporters of the Governor’s now legislature-approved plans.

The former explores the Governor’s involvement in the expansion of gaming and examines his relationships with gaming operators.

In the latter he wrote, “The pretentiously titled bill, "New York State Franchise Accountability and Transparency Act of 2012," provides for neither. …

… So what does it do to advance the laudable goal of accountability? Uhh, not so much unless you believe that state government's controlling racing, by definition, ensures accountability. This would be the state government that so botched the 2010 Aqueduct VLT procurement that the Inspector General referred his report to various law enforcement agencies. Or, the state government that could not manage gambling facilities so as to make money in the City of New York. Or, the state government that had four of its agencies responsible for overseeing NYRA, yet none of them uncovered the alleged excess takeout percentage for the 15 months it was in place. Or, the state government that had 11 members on the NYRA Board who also missed the takeout issue.”

Absent from Mr. Noonan’s diatribes is any reference to the proceedings in Michigan which may have inspired Governor Cuomo’s impatience with intransigent racing insiders. “Detroit narrowly avoids state takeover” describes the effects of“… a controversial year-old Michigan law that gives the state more power to intervene in financially troubled cities and school systems. Emergency managers have the power to toss out union contracts and strip locally elected leaders of authority. …”

So the question remains, “How can we motivate members of the press to serve as advocates for meaningful reform; to promote true transparency that will ensure accountability?”

Another ineffective, if not insincere, media attempt to influence the Governor was "AN OPEN LETTER TO GOV. ANDREW CUOMO," posted on June 11th in which Ray Paulick questioned the motives of former and current Governors Cuomo:

“Governor, quite frankly, you seem angry about this horse racing business, and I don’t fully understand why. It’s not just about the wealthy, conservative Republicans who have controlled the New York Racing Association for so many years, the people you and your father before you have battled with. You’ve won the battle, accomplishing what your father Mario, who also served as New York governor, couldn’t do: a state takeover of horse racing from the NYRA board of trustees.”

He went on to say, "A government-run horse racing industry scares me. All I have to do is think of how poorly the state's off-track betting system - controlled by politicians and their cronies - has been operated, competing against instead of cooperating with the racing industry. NYRA has been far from perfect, but it has survived that corrupt OTB system and a sometimes hostile state government. It has even survived bankruptcy and financially challenging times that have prevented sorely needed capital improvements to its racing facilities."

He concluded with, "I hope you'll stop focusing on the racing elite, those people who have controlled the game in New York for so long. Our industry is as diverse as the sidewalks of New York. Visit the backstretch of a racetrack sometime, the breeding farms, the horse sales. All of us - not just New Yorkers, but people throughout America who make our living in this game - are depending on you to do the right thing."

Mr. Paulick seemingly struck a responsive chord with his audience as those commenting on his piece appeared overwhelmingly supportive, regardless of any previously expressed criticism or support of NYRA by some of them. The numbers may not be statistically significant, but the unusual harmony was noteworthy.

However, without committed follow-up as to specific NYRA Board appointments -- providing recommendations and reviewing candidates already under consideration -- how will the Governor be made aware of what the best interests of racing's participants are, much less act accordingly?

New appointments by the Governor as well as by the State Assembly and Senate are reportedly scheduled to be completed prior to the opening of Saratoga, so little time remains for outsiders to influence these decisions.

A determined press, however, could still have a positive effect by putting a spotlight on the appointment process. Credentials of the newly appointed should not be enhanced by the extent to which they opposed the "Old" NYRA in the past, but rather by the goals, expectations, and abilities they bring with them to the "New" NYRA.

I'm among those who regard the failure to observe the sunset provision of the intended 1% temporary increase in takeout for more than a year as sufficient reason to seek organizational reform.

I believe Hayward's position was indefensible, but so may have been those of Sabini and Megna as well. Their own as yet unpunished failures to catch the "illegal" takeout hardly merit either appointment to the NYRA board or maintaining their current positions.

It should not be forgotten that NYRA survived its franchise renewal crisis because most people believed they were the only bidder that was as interested in keeping New York racing viable as it was in sharing slots revenue. That may still be true, but the competency of those of remaining from earlier boards must be questioned not only for the takeover-initiating takeout fiasco, but also for previously ceding ownership of track property to the state, and then placing themselves in a position that prevented them from defending their very existence when challenged.

It will take men and women of character, good will, and good judgment to keep New York racing in its position of leadership within the industry, and it is the Governor’s responsibility to find them.

Will Cuomo be remembered as a man of vision and accomplishment or just a continuation of his politically-motivated predecessors, Pataki, Spitzer, and Paterson who all caused delays in slots implementation while presiding over NYRA’s descent into bankruptcy.

The Governor’s appointment of Bennett Liebman as an advisor suggests to some that he has higher standards than Paterson, who appointed Sabini and Megna. Perhaps they were already in the dog-house when pressed into attack service.

Written by Indulto

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