RCI Report On Drug Violations: C'mon Man

That Racing Commissioners International report called the 2011 Report on Drug Violations really insulted my intelligence. I'm sure I am not alone.

Their major findings: Less than 1 out of 200 tested samples came up positive. And 94% of those positives were overages of "legal" drugs.

From this, they were hoping that the conclusion is that horse racing is a very clean business, and that it gets a bad rap.

The reality is that the drugs tested for are limited. Trainers and vets will go out of their way to prevent overages of known drugs, they would have to be completely dimwitted not to. But what about the drugs that aren't tested for? And what about the concoctions which make even the testable drugs undetectable? How can they possibly make the assertion horse racing is clean? It is mind boggling.

The hype from this RCI report is similar to making the assumption that from 1992 to 2007, Bernie Madoff was running a clean investment firm.

To my knowledge, most if not all the tests were after race testing. Actually, the RCI could have even used this as more propaganda, by stating that winners and usually another horse in every race is tested, and using this logic, and the assumption that overages enhance the chance for a horse to win, it would make sense that horses that lose are less likely to have a positive.

Also, and this is a big also, to my knowledge, outside of out of competition testing by some jurisdictions, drugs like EPO, DPO, ITPP, snail venom, and cobra venom are not tested for. For a longer list and what these drugs do, check this out.

And then you have things like electric shock treatment which will not yield any positives,
tapping of joints, and hyperbaric oxygen treatments (which works the same way as milk shaking), only it is legal.

Trainers sporting 30% plus win percentages aren't clean, and they are a detriment to the game, not only when it comes to bettors confidence but when it comes to attracting new owners, and keeping current owners in the game as well.

Sorry, but horse racing deserves the rap of being a drug tainted, performance enhancement game, and the RCI report is nothing but a farce. Was the report spurned on by those who don't want lasix banned?, or was it a hokey marketing attempt to get the public to rethink their prejudices against horse racing? Either way, I'm not buying into at all.

Now For Some Good News

Charles Town

Beginning September 19th, Charles Town has decided to cut takeout on trifecta, superfecta, pick three, and pick four wagers to 22% from 25%.
Charles Town takeout wasn't relatively terrible to begin with, as they ranked 19th in takeout score according to HANA's 2011 chart. This cut will easily catapult Charles Town into the top 10, probably closer to 5th or 6th in best overall takeout score.

Back To More Mind Numbingness
There is absolutely no consistency at Woodbine when it comes to thoroughbred fair starts, refunds and disqualifications when a horse obviously opens the gate earlier than the rest of the field.
Here we go again. Watch the 6 horse, Bossman's Blues at 4-5, break from the gate. Put the video on pause at either 21 seconds or 22 seconds:

Bossman's Blues finished second. There was an inquiry, unlike the Fifty Proof debacle a while back. What do you think the result of the inquiry was?
A refund (which would have cost Woodbine quite a bit of money since he was such a heavy favorite)? A DQ from 2nd to last for having an unfair start? Or no DQ and no refund? The answer will appear at the bottom of this post.

WHAT THE HECK IS GOING ON WITH ALL THE BUMPING AT WOODBINE
I checked out the charts for Woodbine from Saturday and Sunday and saw all these "bump" comments next to the racing lines. I decided to count them. 19 in total. Oh, and one even resulted in a DQ.

Maybe they should stop playing this video in the jock's room:


Now the answer to the quiz. Obviously, no change in the order of finish was decided upon. I wonder if the stewards draw sticks or if they pick cards from a deck before making these decisions.

Woodbine Is Heading In The Right Direction

Woodbine just announced that they are lowering the takeout on thoroughbred triactors to 25% from 27%. This is definitely a step forward and an attempt to keep the positive momentum Woodbine has been achieving, relative to the rest of the industry, mostly since the departure of David Willmot early last year when Nick Eaves took over.

This isn't champagne cork popping news though. Even with the drop to 25%, Woodbine is now only tied for 27th when it comes to lowest triactor takeout rates out of 69 tracks.

Woodbine still has a way to go to be number one. Keeneland and Churchill Downs have the lowest blended takeout rates in thoroughbred racing with a 16% takeout on WPS and 19% takeout on all other bets.

Amazing that back when Secretariat ran, Woodbine has a takeout of 17% on everything. Horse racing was very popular, and was pretty much a gambling monopoly back then. I still don't get how when an industry loses monopoly status, that they would even think about increasing prices to the consumer (track takeout). That goes against every economics book ever written, but it explains why horse racing is in the state it is in right now.

Lowering takeout increases churn and allows Horseplayers to last longer. The longer they last, the less likely they are to play other forms of gambling as much, and the more likely they are to eat and breathe horse racing more, and therefore get family and friends exposed to the game, which could lead to more growth.

I would say that racetracks benefit the most by giving their live patrons (and in Woodbine's case, their own ADW customer) the biggest breaks, whether that be lowered takeout or increased rebate. That is how to grow your customer base. I'm not sure that Woodbine has begun to successfully build their business that way, yet.

This lower triactor takeout, like I said previously, appears to be looking towards building on the momentum Woodbine has right now when it comes to US bettors.

Constructive Criticism
Woodbine needs to stop bean counting when it comes to specific wagers. Pay track odds no matter if the takeout at the host track is 12% or 30%.

I have had quite a few private conversations with Horseplayers who admittedly bet less or have gone offshore (with Betfair etc.) at least partly because Woodbine pays less on certain type of wagers than host tracks pay out (eg. Keeneland and Churchill Downs triactors and superfectors).

The amount of money Woodbine grabs off the customer when doing this isn't worth losing the customer over. Let alone the fact that most Horseplayers will bet back the extra money, and even if they don't because the hit was "too big," the positive vibes of coming home with money is worth more than spending money on advertising.

Good vibes go a long way. Gulfstream Park is experiencing this.

Canada is full of gamblers and Woodbine would love to grow at the same pace gambling is growing in Canada, but bad vibes go a long way too, especially in the information age. If you don't believe me, check out the California Handle Massacre. Updated handle numbers out of California are atrocious.

I think the TOC and CHRB deserve this for increasing takeout (not me in the video):


The track owners are scrambling to figure out how to stop the bleeding, but I don't think band aids like introducing a low takeout bet will work at all. The takeout hike needs to be rescinded, and even with that, California tracks are going to have to really work at trying to get back the customers who have simply stopped following their tracks. The longer the takeout isn't rescinded, the harder it will be.

Fort Erie still hasn't announced any takeout reductions. Do they see what is happening around them? More and more tracks are announcing lower takeout bets or are reducing takeout on a few wagers. I am expecting Fort Erie to have an especially brutal year if they don't grab the bull by the horns. Fort Erie is ranked 67 out of 69 when it comes to blended takeout rates.

There are three types of people in this world, those who make things happen, those who watch things happen, and those who say what happened? When it comes to takeout rates and competing with other tracks, Fort Erie's management right now are in category 2, but sooner or later Fort Erie management and horsemen will be in category 3.

This is pretty funny. Even slot operators are talking in terms of takeout and competition. A casino is being reopened in Omaha:

In addition to adding new machines, (CEO Bill) Walsh said officials checked out the competition and set the takeout on the CasinOmaha machines one percent lower than other casinos.

“We feel that by setting the machines lower, people can leave here with a little money,” Walsh said.

HANA adviser and bettor extraordinaire has written a piece with solid solutions that the industry would be foolish to ignore.

The last thing we need is to waste time with another study. The problems are evident. High takeout, drug integrity, signal availability, and tote integrity. The first two problems are racing's biggest, but high takeout is number one, as Daryl Wells used to say, by a good margin.

I do disagree with Fotias about having too much racing. We need grass root tracks as owners and trainers bring in new potential players and tracks are needed within major town limits to expose newbies to the game. Nothing makes a Horseplayer a Horseplayer than the live experience does, but once they are a Horseplayer, the live experience isn't so much needed....but we desperately need new Horseplayers right now.

At this minute though, there is too much racing and too many wagering types because there are not enough bettors or betting dollars to go around. Lowering the blended takeout in North America will solve that problem.

One more thing. The centralized ADW idea is a bad one. Look at what has happened in Canada with HPI. They chased big Horseplayers offshore and to Betfair because they thought they were a monopoly (not to mention the fact that they don't even pay track odds sometimes as cited earlier in this post). If there was healthy competition in Canada (like rebate shops), horse racing handle and profits for purses would be seeing much stronger growth. A centralized ADW in North America would lead to negative growth as rebate players (the only thing in horse racing that is growing right now) would fall off the map, and new players would never be created. The problem is that Horsemen and tracks to a certain extent have a "right now" approach. A long term approach as been sorely lacking in our industry.

Until takeout is 10-12% everywhere, the idea of a centralized ADW with no competition will only help destroy the game over time. If takeout were reduced to 10-12% everywhere, rebates would not be needed to compete, the game would be beatable by enough players to create a buzz, and a centralized ADW would work just fine.

Shhhh! Golden Gate Quietly Decreases Purses

It appears that Golden Gate has quietly decreased purses. By comparing Condition Book 2 and Condition Book 3, horsemen are now running for less. Bottom level claiming purses are around 2-4% less, while allowance races are lower by 8-10%.

For example, I noticed that an allowance non winner of one other than dropped from $34,000 to $31,000.

I can see why this has been kept quiet, there are a few 3 or 4 letter organizations that have their tails between their legs right now. The infamous takeout hike in California, which put the cart ahead of the horse, has been an abysmal failure. Not only has the higher purses not led to bigger field size (Golden Gate is down around a quarter of a horse per race this year), but it has led to an unprecedented Horseplayers Revolt that may or may not be responsible for the 20% decline in handle at Golden Gate so far this meet.

For sure, there is less value for Horseplayers. Higher takeout means lower probable prices, and they break the regular Horseplayer quicker as well, causing them to pay less attention to racing in general over time.

Santa Anita came out with "their" numbers to date. "They" claim they are only down 7.9% so far this year. But for those watching carefully, including "them," the recent numbers look like a horror story.

In the last four weeks, total handle is off over 20%, while total purse money given out is only up 4%. Two major things here, one is that the Mid Atlantic Co-op didn't start taking Santa Anita's signal until the last week of January last year. This meant that for the early part of Santa Anita's meet this year, Santa Anita had around a 10% larger audience than it did a year ago. Comparing the same potential bettors to the same potential bettors could only be done the last four weeks to date. Here is how those numbers look:

The other important thing to keep in mind is that they have cut Wednesday's out. This means they are giving out more purses per race, but running less races. And lately, the Horsemen, jockeys, jockey agents, etc. have only been competing for 4% more money. How long before they are competing for less money than last year. If the 20% decrease in handle keeps up, it won't be very long at all.

Solutions to California's problem cannot be solved by raising prices to the bettor. That wouldn't work if Wal-Mart was in trouble, and it won't work in horse racing either. The costs to own horses horses need to be cut. No reason why it should cost $100-$125 a day in California and only $55-$65 a day at Penn. Sure, maybe a little higher, but not that much higher.

Lower prices means more owners. Yes, purses are important too, but for many, it isn't how much you win but how much exposure to losses you have.

The powers in charge are very aware right now they screwed up. Hollywood Park owner Jack Liebau met with a huge group yesterday including 3 HANA members.

Craig Walker chimes in about California racing. He says that drastic changes are needed.


WOODBINE CUTS PURSES 2%, BUT DOES IT THE RIGHT WAY
Woodbine's bottom line, as speculated here, was down a bit last year despite a handle increase which bucked the industry trend.

“Even though our handle was up last year a lot of that increase was coming from outside Ontario, which means lower commissions for us, and the contribution to the purse account was minimal.”

Woodbine finally allowed the big rebate shops to take their signal last year. This created larger pool sizes and has helped put Woodbine on the map amongst some of the biggest bettors in North America.

Sadly, they have failed domestically, and this is due to higher than average track takeouts, which their live customers have to deal with.

Woodbine is on the improve mentality wise since David Willmot left the boat and they are doing things right, finally.

Things like cutting the major stake races exorbitant purses to not so exorbitant purses is proof of that. Giving out $1.5 million for the Canadian International instead of $2 million will not hurt the quality of the field going forward one bit. And that is now $500,000 more that doesn't have to be taken away from the domestic horsemen.

Another great move is to move the big races to Sunday, when there is less competition as most of the American tracks card their big races on Saturdays. Now that Woodbine is on the map, Sunday's can be Woodbine's day.

Woodbine has good momentum right now. But now with a very good foundation in place, it is mandatory that they lower takeout rates and start to grow domestically.

Some Recent Historical Takeout Info About Woodbine

It isn't very easy to find historical takeout info, outside of archived newspaper articles, it is especially tough to find old takeouts for Canadian tracks. I used to think they were found in the program. I have some old Queen's Plate programs from the 1960's, and couldn't find it.

I was over at my brothers house the other day, and he showed me his keepsake Daily Racing Form from Secretariat's last race, which was at Woodbine in 1973.

Incidentally, that was the first day I started selling racing forms. I was 12. Sold around 300 forms before the first race, got paid peanuts, and spent the rest of the day in the dining room (my mother was a regular and had a table).

Back to the the old form. Takeout information was in the charts. Eureka. So here are some findings from that form and a few Breeder's Cup forms I have kept through the year:

Woodbine's takeout in 1973 was 17% for all bets. 9 1/2% went to the track (for the track and purses), 7% went to the Provincial government, while another 1/2% went to the federal government. Back then, there was a daily double on the first two races, and 3 or 4 exactors on each card...that was it. Money was churned a lot more efficiently back then, that is for sure.

I'm working on finding some info from the 80's or early 90's, because lots changed from 1973-1996. I'm not sure when takeout on exotics shot up, but they certainly did.

One huge change happened the year Woodbine hosted the Breeders' Cup in 1996, the Ontario government dropped their cut on bets from 7% to only 1/2%. But takeout only dropped a bit on WPS that year. The takeout back then was 15.2% on WPS, 26.7% on exactors and doubles, and 28.7% on triactors and the Win 4. The federal tax was up to .8% from .5% in 1973 (today, the combined tax the government retains is still 1.3%).

In 1998, I notice that WPS was up to 16.2%, while other bets remained the same.

Woodbine got slots in 1999, but there was no immediate relief for the Horseplayer. Even with a cut from the government and slots, Woodbine (and Fort Erie for that matter) didn't even try to cultivate its horse racing customer.

I have some data on Fort Erie from 1999. 17.2% on WPS, 28.7% on triactors, and 26.7% on doubles and exactors.

Somewhere between 2000 and 2001, Woodbine finally made a significant move and dropped takeout in exactors and doubles to 20.5%. Fort Erie never followed suit.
WPS was up to 16.95%, triactors were 28.3%, and all other bets were 26.3% at Woodbine.

The only other changes that have happened at Woodbine since 2001 was a short experiment in reducing the Win 4 to 15% for a couple of years. It was raised back up to 25% on the hush. Just over a year ago, Woodbine reduced takeout on triactors from 28.3% to 27%.

Fort Erie hasn't changed much since 1999. WPS is now 16.95%, while triactors are 28.2% and all other bets are 26.2%. And they wonder why they can't grow their business?

Some other takeout rates from 1999. Aqueduct: WPS 15%, Tris/P3s/P6/Supers 25%, all other bets 20%. Gulfstream Park: WPS 15%, DD Ex 20%, All other bets 25%. Keeneland 16% on all bets. California A tracks had takeouts stay the same except they raised 1/2% in 2004 on exotics, and recently apparently just blew themselves out of the water by raising takeouts on exotics 2-3% at the beginning of this year.

For an up to date chart on track takeout click here.


Speaking of California, predictably Santa Anita is looking to rescind the takeout hike racing dates in March by eliminating Wednesdays.  What happened to promise of bigger fields thanks to the hike in purses from the extra money coming in from the takeout hike?  Well lets see, handle is down, field size is down (despite cutting to 4 days this year in January and February (though they had a few rain outs last year), and most importantly, the racetrack is losing a lot of money each day they run in comparison to last year.

Personally, I get as much of a rush these days looking at the end of the day handle from Santa Anita and Golden Gate while comparing it to last year's handle, as I did betting their product (I stopped the day the bill was signed by The Terminator to raise takeout).   Maybe David Israel is right,  horse racing is entertainment (at least when you aren't betting on it).

Lately, especially since the impact of the Mid Atlantic Co Op can be seen (last year, Santa Anita wasn't on their menu until January 22), handle at Santa Anita is consistently down every day anywhere between half a million and close to $3 million (last Saturday).

Meanwhile handle from Tampa Bay has been amazing.  Management there should send the TOC and CHRB a huge thank you letter.  For example, on Saturday, they did over $8.2 million in handle compared to last year for the same Saturday and same amount of races when they did $6.7 million.  I don't think Woodbine does anything close to $8 million on their biggest days.  


Andy Beyer has a new article out about Microbets.  The two pluses when it comes to making fractional wagers on supers, etc. are that it allows smaller players to participate better when it comes to chasing big payoffs, and most importantly is the tax advantage (a lot less winning bets are subject to withholding tax which takes money out the system that could be churned back). 

Canadians don't have to worry about withholding taxes, thankfully, but it is no reason to have such high track takeouts.  

I especially like Beyer's line..."Gulfstream promoted the Pick Five by offering it with a takeout of 15 percent (compared to the extortionate 26 percent it takes from trifectas and superfectas."

One negative when it comes to microbets is that they entice Horseplayers to usually higher takeout bets. Some the same money that used to be churned at lower rates in WPS or exactor bets (which usually have lower takeouts) is now being directed to superfectas which typically have higher takeout rates. This generally moves up the blended takeout rate that Horseplayers now have to overcome, which at the end of the day, makes a bettor go broke quicker than before.

The other negative is that Americans betting through and American based bet taker cannot play microbets offered in Canada, and visa versa. With the Canadian dollar and US dollar close to par, this rule needs to be dealt with. It really gives the local Horseplayer an unfair advantage, especially when allocating dollar wagers on possible pool shot combos or split pool shots that can be had for 10 or 20 cents.

For example, Woodbine offers 20 cent supers and Pick 4's, but Americans have to play them with a $1 minimum and Canadians betting through HPI or at Canadian tracks or simulcast centers can't make microbets on US tracks.

This includes the Gulfstream Park new Pick 6, which Beyer calls a suckers bet. I think Beyer is missing the point in that this bet can draw fringe Horseplayers to bet on a card they wouldn't normally bet, and more importantly possibly entice slots and lottery players to cross over to the "dark side."

Any hoot, it looks like Andy Beyer has officially coined the term microbet. I like it because I was very uncomfortable using the term "fractional wagers."

Why Didn't David Willmot Hear Himself Talk

With handle still plummeting across North America, I though I'd bring out a brilliant speech by none other than David Willmot back in 2001 when he accepted The John W. Galbreath Award for Outstanding Entrepreneurship in the Equine Industry. Racing execs everywhere should take live by the observations he made in the speech. it is a shame that Willmot himself didn't live by those words.

In 2001, Woodbine was doing great. Some history, Willmot took over the reigns at the OJC around 6 years earlier. They were on the brink of bankruptcy, unable to compete with lotteries, the Blue Jays, and Charity Casinos which were popping up all over Toronto, Willmot first sold some of the tracks non-income producing (and/or losing) assets (paintings, Fort Erie, etc.), and also got involved in optimizing the payroll.

But most importantly, he lobbied the government to drop their cut from takeout to next to nothing, while simultaneously bring slots to Woodbine which fueled purses. What he failed to do was cut takeout by the amounts he didn't have to pay to the government anymore. This is one major reason that after 2001, business slowed down.


The other important thing he did was start up phone betting which made it very easy to get into internet betting without any delays when the technology was in place.

Yes, Willmot made it very easy for customers all across Ontario and all of Canada to wager on many horse races a day. The problem of course, was and still is very steep takeout rates which makes winning impossible.

Willmot's failure to compete in the first decade of this new century gave medium and large gamblers no choice but to give Betfair and offshore bookies their action. Woodbine lost close to a generation of new bettors, and Willmot could have saved at least half the loss if he had only acted on what he said when accepting the award.

By not taking his advice, Willmot just allowed Horseplayers to lose faster and faster as more tracks are available from just about everywhere to everyone now. But you won't find any Chris Moneymakers' betting the ponies in Canada, at least into a 21% blended takeout rate. And that is the problem. Winners create new players, and hideous track takeouts only creates losers.

Here is his speech:

Thank you, Bob. I am delighted to be here. My wife, who is from Lexington, was editor of the now-defunct Thoroughbred Record when I met her and brought her to Canada. She found the following words of George Bernard Shaw that were often quoted by John Galbreath. Let me read them to you.

“I want to be used up when I leave this earth. For the harder I work, the more I live. I rejoice at life for its own sake. Life is no brief candle to me; it is a splendid torch, which I have got hold of for the moment. And I want to make it burn as brightly as I can before passing it on to future generations.”

When I read words like that, I am so honored to be associated with an award that is named after John Galbreath. As a younger man in racing, I saw him manage Darby Dan, and I saw him operate the Pittsburgh Pirates. The combination of sportsmanship, business talents, and integrity that Mr. Galbreath possessed was astounding.

I couldn’t be happier to be here today, especially to talk to students in this program. I majored in economics and then law, but my minor was history. All my friends say that I am a frustrated history professor. I love to lecture to students, but I won’t go on too long. When I was in college on a Thursday afternoon, I didn’t want to listen to some guy go on about himself. I wanted to get out. "Where is the nearest pub?"

What I do want to talk briefly to you about are some of my earlier experiences as a breeder and horseman, and how I feel about the business. For me, the epiphany came when I went into track management after almost 30 years on the other side of the sport. It was astounding for me to realize that I knew absolutely nothing about the business of conducting horse racing.

The first race I ever saw was the 1964 Kentucky Derby won by Northern Dancer, a huge Canadian hero. That was the day that I fell in love with the business of horse racing. I love horses. I admire their beauty and courage. But what I have always felt passionately about is the business and the challenge of horse racing. Competition. Can you nick your mares better than other people? Can you raise a better horse? Can you train them better? Can you manage their careers better? And will any of that equate to success at the racetrack?

Kinghaven, the farm that I owned with my father – he died in 1994 – and that I have owned since, has bred over 90 stakes winners, a lot of good horses. During those years I spent on the backstretch, I thought I understood what this business was all about. It was pretty simple. You tried to breed a good horse, you managed it, and then you tried to make sense of your income statement. Of course, everybody that showed up at the racetrack was there to watch your horse run.

In 1984, I was appointed to the board of the Ontario Jockey Club – the youngest member of the board. I am now 51, and it says something about the place, and about horse racing boards, that I was still the youngest member until this past year. But after I went on the Board, I, along with many others in the industry across North America, watched racing go into a serious decline. There were lots of reasons and finger pointing about why horse racing was getting into difficulty.

In 1995, the OJC, which was 120-years-old, operated five tracks. In terms of racing days, it was the largest racing organization in the world before Churchill and Magna became holding companies. The Board asked me that year to go in as the CEO. I had been the “angry young man,” and I think they’d had enough of listening to me complain about how we were messing things up. So they said, “If you are so smart, come in as CEO.”

I had been involved in other businesses: insurance, oil and gas, bottled water, and computer supplies. I had managed to turn some companies around and had done well buying and selling them. A friend of mine, once the head of Hockey Canada, another not-for-profit, where there is a lot of politics and nobody has real ownership, said to me, "David, don’t go in as CEO up there until things get really smelly. Because they are not going to let you do what you think has to be done until things get smelly." By 1995, things were getting pretty smelly at the OJC. In fact, they were so smelly that I began to wonder why I was in that business.

I would look out the window at my farm thinking, “Am I nuts to have money invested in this business? It’s a dying, contracting business, and a dangerous place to have your money invested.”

When I went into the OJC as CEO in 1995, we were about three months from having the Bank of Montreal call our loans. My first meeting with them – I remember well – I was asked to go down and meet with the bank. I thought it was an introduction, just one of those get-to-know-the-new-CEO meetings. When I walked into the room and saw these five faces, I knew this was no introductory meeting. This was a “come-to-Jesus” meeting. I was there to be informed by the bank that if things didn’t change, and quickly, they planned to pull the loans.

The unusual thing about the OJC – we have since changed our name and I will talk about that in a minute – the unusual thing about the Ontario Jockey Club is that it is a dual breed organization. Its harness racing product is on a par with the biggest and best in North America, the Meadowlands. Our Thoroughbred racing is not quite that high, but we would probably have about the fourth best product in North America on Thoroughbreds. Between the two arms of racing, there are about 40,000 jobs in the province of Ontario that rely on the business.

So, I felt a huge pressure to try to make sense of this business that was in difficulty. The first thing that I realized, aside from the lecture from the bank that we had better start proving that we were a business, was that I didn’t really know what business we were in. And it is pretty hard to turn a business around when you don’t know what business you are in.

During the first month that I was CEO, I had a meeting with about eight or ten of our biggest gamblers. During our discussion, I used the word “fan,” and talked about our “fans.” And one of these guys looked at me and said, “Don’t insult me.” I said, “Well, what do you mean?” He said, “I am not a fan of anything that you or your rich friends do around here. And don’t call me a "patron" either, because I’m not a patron. Those are people who give money voluntarily, like for the arts. Philanthropically, I am not a patron. I am a gambler. I am your customer and I want to be treated with the respect that a paying customer deserves.”

Since that day, we have never used the terms fan or patron around our company. It is customer. Since that day, everything we have done to turn our business around, and to resurrect horse racing in the province of Ontario, has been customer driven.

One of the difficulties in this industry, and I say this as a horseman myself, is that there has been too much focus on the supply side. This is the side of the business that provides the product, the horses to the tracks, and includes breeders, trainers, and backstretch employees – and I spent years on the backstretch. But there is a demand-side of the business also. The customer, bettor, gambler – who provides the capital; those purses that enable the rest of it to make sense.

Over the years, the thinking in this industry – certainly among management of tracks across North America – has been driven by this supply side. Everything has been, “What can be done for the horsemen. How can we fix up the backstretch? Let’s do whatever the horsemen want. If they want more racing, then we should have more racing, even if that means smaller fields.”

But if you sit down with the gamblers, it is pretty simple what they want. They want field size, they want pool size, and they want low takeout. Frankly, they don’t care if a horse is by Mr. Prospector or Santa Claus. The truth of the matter is, racing is a gambling business 99.8 percent of the time and a sport the other point-two percent. Granted, it’s a sport for a lot of those people who supply the product, but for the industry to work, we have to take care of the customer. I think for decades we have not.

The customer doesn’t want small fields. He doesn’t want “trickle-down economics” like a lot of horsemen do. Horsemen figure, "if we race all year round and have five horse fields, I will pick up enough fourth- and fifth-place finishes that I might make sense of this." Well, racing is still competition. It is not there to guarantee anybody a way of life. You have to be good at what you do, be competitive, in order to provide a product that the customer wants to bet on. And the customer wants things that I just mentioned plus quality racing, but if you don’t give them the fundamentals, five-horse fields of well-bred horses won’t encourage the bettor to bet.

A Philadelphia Park executive said to one of his biggest bettors on Breeders’ Cup Day, “Who are you going to bet on in the Distaff?” He said, “I like so-an-so, and I am watching that race because I’m interested in it.” (I think the race had six or seven horses in it) “But I am betting on the eighth race at Finger Lakes. It has 12 horses in it.”

We have to realize that the customer does not want the same things that horsemen want, and that the customer’s best interests are not served by what horsemen want. But we have to deal with the customer side. Bring the customers back and give them good value for their entertainment and gaming dollar. Only by doing that will we get purses up high enough to make the participants, the supply side of the business, healthy again. It is happening – slowly. Keeneland is dropping its takeout rate. New York is dropping its takeout rate at Saratoga this year. These are terrific signs that a few racing organizations – and I include ours among them; organizations that used to look at things only from the horsemen’s perspective – are beginning to look at them from the point of view of the customer.

So, beginning back in 1995, we adopted a customer-driven philosophy. We lobbied the Provincial government to reduce the pari-mutuel tax, and we were successful after years of trying because we were able to make the argument that the lotteries, the commercial casinos, the charity casinos, the scratch-and-wins, the break-open tickets – all of the things that the Provincial government introduced to compete with horse racing – were being taxed at a lower rate than racing. After years of crying poor, to which the government wasn’t going to respond, we found an Achilles heel, and that was fair taxation. For the first time, when we went to them and said, “We want a reduction because you are unfairly taxing us,” the argument was made, it was accepted, and the tax was lowered. And immediately, some of the tax reduction was passed on to our customers through a lower takeout.

At the same time, we had been lobbying very hard to get the enabling legislation for slot machines at racetracks. It took us three years of negotiating with government on the final deal and the entire industry had to hang together for the Province to agree to a deal that was fair and a true “win-win” scenario for government and the industry. The fact of the matter is that slots are merely a second product line at an existing gaming destination. They don’t create an expansion of gaming locations. This is a politically safe and socially responsible way for government to raise more gaming revenue without introducing more gaming locations in a jurisdiction.

The key is to try and convince government and to be proactive. I think this is one of the challenges that Kentucky has. The key is to convince the State or the Provincial government to put expanded gaming in the racetracks only; don’t put VLTs or slots across the road in bars and restaurants or casinos. That will hurt the horse racing and breeding business. With slots, yes, there is additional capital for purses, which brings back financial health to the business, but you also bring more people back to the track…customers that you can then convert.

Now, a lot of gaming consultants, and you have one on the faculty of this university, will say that racing is cannibalized by slot machines and that you cannot cross a slot player over to racing. But we believe that we are proving every day that that is not true. When we brought slot machines into Woodbine and Mohawk, our two tracks, we physically integrated the machines in such a way that no one coming to the slots could not be exposed to horse racing, as opposed to going in and out for the slots and not knowing they were at the races.

We built or modified our plants in such a way that slot players, whenever they go for a walk, find themselves on an attractive racing floor. We spent millions improving our racing floors so that when slot customers went up the escalator, they didn’t walk out onto what we used to call “1956 industrial Woodbine” – gray steel pillars, gray walls, stereotypical racetrack, cigar-smoking guy standing in front of the TV saying things you don’t want to listen to and throwing paper on the floor. We completely renovated and rebuilt our tracks so that they were modern, clean, safe – we beefed up security, and barred about 50 of the worst actors. Incidentally, since we’ve done this, female attendance is up about 40 percent and families are coming back.

We want customers to have a very entertaining experience in attractive surroundings, and to feel they are getting really good value for their dollar.

At one of those early customer meetings, that gambler I told you about, said, “For years, what you guys have done for those of us who want to bet on the horses, is drag us in, turn us upside down, shake the money out of our pockets, and then kick us back out. And you think the only reason we are here is to watch you, your friends, and your brown furry animals enjoy your elitist activity.”

Those are pretty harsh words, but he was right. That is how customers at racetracks have been treated. They’ve been dismissed by management as people who will be there no matter how they’re treated. Well, we spent $120 million on our tracks, which was funded by turning our business around, by bringing people back to the tracks, by restoring the confidence of our bankers, by the general turnaround in the industry, and by the prospect of slots. We created facilities that a lapsed customer would come back to and feel comfortable and that a new user would come to and say, “This is not what I expected from a racetrack. This is very nice.”

At the same time, we realized that we had to distribute our product off-track. Our TV department now has over 100 people in it, which makes it as large as a station in a large city. We have gone out on three platforms. We have gone out with what I term hard-core, medium, and soft-core distribution of our racing product in Canada. The hard core is The Racing Network Canada (TRNC). The TRN in the U.S. went broke competing with TVG for several reasons, including a high cost of distribution. TRN Canada, which is owned 100 percent by our company, has been very successful. In just three years, our telephone account betting has grown from zero to $60 million, and it is because we are putting our product into the home. If you have TRN Canada, you basically get barraged with racing and betting information.

Our soft-core product is SportsNet, where we have a lot of racing on basic cable. It is more the TVG style; that is, explaining to people how to bet, although they don’t use horseracing jargon. They wouldn’t talk about a horse running for a “tag.” If you had never watched a horse race, what does it mean? A dry cleaning tag? What’s a tag? So that product is much more geared toward exposing racing and converting new people to racing.

In the middle is full-card simulcasting. We have 426 live race programs a year, so we have a lot of product we send out to various simulcasting networks across North America.

You folks are obviously in this program because you are interested in the business side of the equine industry. For those interested in racing, the opportunities for skilled management are endless. As the industry starts to turn around, the opportunity for exciting and challenging employment is growing dramatically.

In our company, the Food and Beverage Department has 450 employees and does $30 million a year in business. Our Television Department has over 100 employees. There are more than 400 employees in the Mutuels Department. It goes on and on. We have 26 teletheaters, which is another department. So, there are a number of different areas that you could look upon as a potential career opportunity, and those are in addition to the racing departments. Presumably, you like the equine industry, and may like being involved with horses. But the business of racing needs capable, bright, young people who have had formal business education.

For years, racing used to rely on people coming up through the backstretch for the management side. But we are desperate for bright, young people who can come in and look at the horseracing industry as a business. Who can understand demand side and supply side and what has to be done in the way of marketing. You have to understand your product before you can sell it, and you had better understand whom your customer is before you can sell that product to them.

We have an incredible opportunity in horse racing today. We have the bubble of the baby boomers for the next 20 years. Racing probably has the best demographic of almost any business in North America in the sense that it is basically 45-year-old-and-up people who have disposable income and discretionary time for racing. I’ve heard people say we need to get more young families out to the races. But I know that when I was younger, going to the races didn’t make an awful lot of sense. Our two kids did not want to go and we were too busy.

We have a great demographic. If we can build on that demographic, give them what they want, give them security, give them good transportation, give them good food, give them good surroundings and give them good racing product that is based upon all the fundamentals of what a good gambling product is, we can succeed. If we are ever going to expand horse racing, if it is going to regenerate itself, then we do have to bring new people into the business.

A few years ago, Andy Beyer referred to racing as “a gambling game.” I believe it is more often that than a sport. It is a sport on Kentucky Derby day, and on Breeders’ Cup day, or on Queen’s Plate day at our track, but it is not a sport most of the time. Most of the time it is gambling. A $20,000 claimer on a Thursday afternoon is not a sport. Jerry Bailey may be brilliant when he wins the Breeders’ Cup on a horse, but he is a bum when he gets beaten on a 4-to-5 shot in a $20,000 claimer on Thursday. At that moment, he is not a sports hero. He is simply a means to a gambler winning his bet, and if Jerry blows it, that gambler is very upset.

So, we have this hybrid between sport and business. Over the years, by convincing ourselves that it was purely a sport, we let the business slide. We lost track of those people who come to the tracks, why they come, what they want by way of product, value, and entertainment for their dollar. I believe we are starting to bring them back and I think we have to just not be naïve about what brings them back.

We have two teen-age sons, 14 and 16. If I am watching TRN Canada at home and they walk into the room, they will ask, “Do you like anything?” If I say, “No, I’m just watching,” they are gone out the door. But if I say, “Yeah, I like the five horse in this race,” they’ll ask, “Can I have a piece of your bet?” They will sit and watch with me because they have $2 or $5 riding on the race. Even though our foaling barn is 50 yards from our house, our sons have not taken much interest in “the horse” or “the sport,” but they like to gamble. We can talk about juvenile gambling, but forget that. They are going to be on their own soon and I want them as customers.

So the fact is, we have got to attract the next generation of fans by making it a fully and excitingly interactive in-home product. I don’t think with conventional marketing that you can get many people who have never been to a racetrack to go.

We have to get people out to the tracks for reasons that are necessarily associated with racing. They have to come out because the food is good, and the ambiance is good. They feel the entertainment experience as well as the racing experience. We will soon have fully interactive in-home wagering where the picture comes up – you put up your account – you build your bet – you place it – it is automatically credited or debited. When that kind of legal in-home wagering becomes common, I believe that young people of today, who are computer literate, who love that interactivity, will start betting on racing just because it is a gambling game.

Ultimately, they may become interested in the horse and the sport and will one day ask, “Why don’t we actually go to the track and see what this is like live?” I believe that is the way to bring new fans to the racetrack. But when they get there, they had better be able to find a combined entertainment-sport-and-gaming product that will satisfy them. At the very least, the track can’t be so empty that they walk in and say to themselves, “What’s wrong with me that I am here?”

People are coming back to tracks today and it’s a challenge. It is going to be a long row to hoe, but I think racing is over its worst days and has its brightest days ahead.

When I started as the CEO of the OJC, we had negative cash flow of $10 million. Today, we have positive $40 million in cash flow. In terms of perception, our name sort of fit our management. We were the Ontario Jockey Club, a bunch of elitist, self-perpetuating, self-appointed guys, running their horses, and hoping the public came and bet enough money that they could make sense of their “elitist activity,” as that gambler told me. We have now changed our name to the Woodbine Entertainment Group. We are not-for-profit, but we don’t think of ourselves as not-for-profit. We are a business with over 3,000 employees that does $1.3 billion a year.

Today, just the change of name evokes for customers and potential customers the fact that we are an entertainment experience and not an outdated club. Our vice-president of human resources was meeting with the Deputy Minister of Labor, and when she put her business card in front of him, he said, “How many jockeys are in your club?” So we changed the name to change the image of racing.

Thank you very much for having me today.

A couple of final things. Willmot did drop takeout on doubles and exactors around 2000 by a point. The thing is that the government gave the track around a 6% cut. The good majority of it was split between the track and the horsemen and not the bettors, though some more was given to larger bettors through a very minor rebate program through their betting account system.


I'm hopeful, new Woodbine Chief Nick Eaves will actually follow through on Willmot's superb ideas and observations (the one's I highlighted as his crystal ball was way off when speaking of the future). There are indications that he is as Woodbine handle bucked the trend last year (allowing the big rebate shops to take the signal, getting TVG to feature them, and also being placed in the Eastern edition of the DRF is why). Domestically they still sucked DB's (the first initial is Donkey), as they are priced too high as a competitive form of gambling, though they look like they are starting to get it (the change of direction on their Racing Show on The Score) as they realize that nothing has changed since 2001, 1981, or 1931: Horse racing is fueled by the bettor. The bettor is the customer, not the fan, not the horseman.

Did The TOC Pull A Fast One?

It may not have been the intention of the Thoroughbred Owners Of California (the TOC) to have pulled a fast one on the California racetracks, but the consequences sure makes them look like geniuses while California track ownership and management are looking like pretty bad right now.

The track owners and the Horsemen may have actually believed that bettors would be attracted to the move to dirt at Santa Anita, and that bigger purses would attract more horses and create larger fields which would increase handle attracting new money, more than enough to make up for the lost money in reduced churn (a bigger chunk of the existing pie, though their action will reduce the pie even more).

The reality is that it still costs too much to own a horse in California despite the purse hike, and not very many outfits are bringing horses to compete there.

Trainers charge relatively too much and vets don't help things either.

It is speculated on that trainers who charge high prices look for the smallest field they can find so as to keep their win percentages high enough in order to justify their prices (you can't have a 10% win percentage and have too many owners pay $125 in day rate). This culture doesn't change overnight.

The wild card is that there has been player push back, speeding up the effects of raising takeout. No one was anticipating this.

Despite handle being off, the Horsemen are ahead of the game and here is why the TOC is in no hurry to rescind the recent takeout hike:

In a nutshell, the takeout increase has caused blended rates in California to go from around 18.5% to 20.5%. However, the entire increase now goes to the Horsemen.
Out of State signal fees could range from 3% to brick and mortar locations to much more when it comes to what ADWs pay. It was admitted that California racetracks could not get the full increase from out of state bet takers, but only a little more than half. Still, if the average signal fee was 6% last year, it means that they are now getting 7%, but when you look at it closer, it means that purses now get 4% on average instead of 3% of every dollar bet on their product from out of state. using this example, which means an increase of 33% over last year (again, I'm not sure of the exact numbers, but this is probably very close).

Domestically, from in-state bets, they now receive anywhere between 25-33% more over last year on average. Tracks, meanwhile receive the exact same percentage on every wager, if everything that has been made public is true.

In layman's terms, this means that for every thousand dollars bet last year, the track and horsemen may have received $50 each on average (again, this is an educated guess). However, now horsemen receive about $65 on every $1000 wagered, while tracks still get $50.

If handle is down 15% because of a combination of the Players Boycott and less churning created by higher takeouts, it means that in relative terms, tracks are now receiving $42.50 on every thousand bet, while Horsemen are still receiving $55.25 per every thousand bet (in adjusted dollars). So even with a 15% drop in handle, something devastating for the track, Horsemen purse accounts will be up by 10%.

Now, if you go a step further, the California racetracks could have been actually up this year if not for the boycott and reduced churn. Gulfstream Park and Fair Grounds early success this year may mean that handle might be on the way to recovery. So California track owners are not only down whatever they are down this year, but down what other tracks are up as well.

Unless handle drops at least 25% gross over last year, the TOC is unlikely to be motivated to rescind the takeout hike, unless the tracks are hurt so much that they are forced to cut back dates even more (they are currently running only four days versus five at Santa Anita right now), or even worse, threaten to close down. The tracks may have to run only 3 days a week (to cut expenses down), less races (more per day), and a hope for fuller fields to attract more betting per race.

Both Del Mar and Hollywood Park have a foot in the grave (well at least a big toe) to begin with.

How can this mess be fixed immediately?

The TOC has to be persuaded to look into the crystal ball. It is inevitable that things will be a lot worse for horsemen, and whatever tracks remain standing in California a year or two out. There is zero evidence to show that higher takeout leads to more money bottom line for Horsemen and tracks.

The tracks have now changed percentages on net takeout, and the TOC would be ill-advised to not consider this when negotiating. The cut on net profits need to be readdressed. If the TOC and tracks are reasonable, the Horsemen should now aim to receive between 55-60% of net takeout received on the California product.

This change would be good going forward. As there would now be motivation to make the most net takeout money, which means that the track is free to seek optimal takeout rates.

If blended rates don't come back down to at least where they were in California, California racing is at risk of losing Horseplayers who will never return. Most Horseplayers who are boycotting are not interested in anything but a return to the old rates before they will consider betting another race there.

C'mon guys and Bo, I want the game to grow. Get together and make it happen.


WOODBINE HAS A SIMILAR IMPEDIMENT

Woodbine's blended takeout rate is approximately just over 21%. 1.3% goes towards taxes. That leaves $200 on every $1000 bet to be split between horsemen and tracks. However, Horsemen get an additional 2% on all bets (4% on triactors), which means that on every $1000 bet on track, Woodbine gets $89 while Horsemen get around $111 on average.

If Woodbine drops takeout, the Horsemen get even more of a percentage on net takeout. The HBPA and Woodbine should get together and try to help grow the game, by changing this deal and make it a percentage of net takeout, not a percentage of what is bet. A 55-45% split in favor of the Horsemen on wagers made through Woodbine would not change things one bit, except it gives Woodbine the ability to experiment with lower takeouts.

Of course, if Woodbine could find another way to fund the 2-4% the Horsemen gets, they would be free to experiment with lower takeouts as well.


FORT ERIE SAVED FOR AT LEAST ONE MORE YEAR

Not very many people knew that Fort Erie was even in trouble until early this week, when it came to racing in 2011. They supposedly were good to go for 3 years, but they were not able to make payments for the increased payment to Nordic ($650,000 this year and next, compared to $100,000 last year) and the new HST on time. And they obviously didn't make enough last year to overcome the concern that they could actually come up short this year, and they realized that there is a question of who pays for the shortfall if it happens?

Details are not out, but it looks like a deal was carved out that does not place the indemnify the EDTC (the current managers of the track).

Still, if they think there is a hope in hell to grow a business with a 26.2% track takeout on exactors and doubles, whoever is guaranteeing the losses is guaranteed to be out money.

CLICK TO LISTEN TO A RADIO INTERVIEW OF PROFESSIONAL GAMBLER AND HANA VP MIKE MALONEY
It starts at the 17 minute mark. You might learn a thing or two.



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Go Zenyatta Go, But Not With My Money

I will be rooting for Zenyatta to make it 20 for 20, but I don't think she has a hope in H-E-Double Hockey sticks. For the record, I didn't like her last year either. But this year she running against the top male horses on a dirt track.

She looks like she is at least 5 lengths inferior to Quality Road and my second choice, long shot Musket Man.

But I really want to see her win. She is great for the game.

My main concern is that lightning fast tracks can really hurt horses that try. I don't doubt Mike Smith when he says she has yet to have had to go 100%. Tomorrow will be different. I just hope her heart and desire to win doesn't turn into a serious injury.

I'll be torn if the horses I bet on are running one two with a sixteenth to go and Zenyatta is making her usual move. I actually think I will rooting for Zenyatta in this case.

I handicapped the entire Breeders' Cup for today and tomorrow. You can see my picks as well as those from fellow Thoroughbred Blogger's Alliance members here.


Drugs are in the news again. Here is a New York Times article At Breeders’ Cup, a Volatile Mix of Speed and Drugs Check out the chart in the left hand corner. Jamie Ness leads all top money winning trainers in the starts per medical violation category.


In what is hopefully a positive move, The Racing Medication and Testing Consortium (RMTC) has a list of recommended thresholds and withdrawal guidelines for numerous drugs that are commonly used. It would be great for the game if every jurisdiction is on the same page.


There is an in depth article on undetectable drugs over at Standardbred Canada. ITPP is mentioned. I did a piece on this drug recently.


The horse racing industry should be ashamed of themselves as handle for 2010 now looks like it will drop to 1996 levels. We've seen a handful of tracks recently doing something about it as they try to compete by lowering takeout on at least one of their betting items, but what is needed is a cut everywhere in takeout. Racing is a great game, but there needs to be visible long term winners for the masses to be attracted to it.


CANADIAN BREEDERS' CUP BETTORS BEWARE
HANA (The Horseplayers Association Of North America) is pissed at Woodbine, and rightfully so. There practice of skimming some of the winnings of their customers on low takeout triactors, superfectors and Pick 3's needs to stop.

Tom Says:

Just to get this straight. A bettor makes a wager on a Churchill Downs races and cashes. The money bet actually goes into the pool, and Churchill pays Woodbine based on real track odds. Woodbine keeps some of it and gives the rest to the customer.
Can't Woodbine see how wrong this is? What about the Canadian government? This just isn't right.

I actually have faith that the new regime under Nick Eaves will abolish this practice soon.



Speaking of tracks trying. Western Fair has reduced their Pick 4 wagers track takeout to 15% starting today.


Zenyatta on 60 Minutes. In case you missed it:




HT Standardbred Canada

Big Day At Woodbine Today

Woodbine's Super Saturday is upon us. $3,500,000 in purses (The Canadian and US dollar are almost at par, so it really is $3.5 million) will be given out over three successive races.

Even if track takeout was 30% (Woodbine isn't quite that high), it would take almost $12 million in live handle to pay for those purses alone, and that is assuming all the money goes to purse accounts.

Is it worth giving out that much money in only three races? When you look at the handles on weekdays, I would say no. Not as long as Woodbine still has high takeout levels that stifle growth to the extent that a big show like today is meaningless in the long run.

The total purse money given out today represents half the money Fort Erie gives out in an entire year. I'm not a Communist, but I think it would be best to spread out that kind of dough amongst all the owners, and not just a few. Besides Horseplayers, growth can occur out of new owners who think they have a reasonable shot at breaking even or making money. There is only a tiny amount of elite owners who are in it for the home run.

Before I get to my picks, I have to bring up one more thing that bothers me when it comes to purse distribution, and even betting. It is the what seems to be endless amount of races at Woodbine that have big purses, that are made to go because one trainer enters two horses. If you look back at this year, overnight handicaps with $100,000 purses have been able to go thanks to this loop hole.

The bad thing about the loop hole is that almost every single time this has occurred, one of the trainer's horses mysteriously needed to be vet scratched. I don't blame trainers like Nick Gonzalez, Terry Jordan, Don MaCrae and others for taking advantage of the loop hole, I blame the system which makes this an easy thing to make a mockery of.

Today's first race is a good example of what could happen. A six horse barely bettable race where the one and two are both trained by Sid Attard. These horses have a reasonable shot of running 1-2, but there is a high likelihood one of them will come up with a cough and have to be scratched (at the time of this writing scratches are not out). It would turn the race into a five horse affair, and it is lousy for betting, and lousy for racing in general.

OK, now for my selections.

NEARCTIC STAKES

I've always like Grand Adventure. He has the best figures going, and just needs a little give to the turf and a little racing luck to come out ahead.

EP TAYLOR STAKES

I think Reggane will beat Shalanaya today. It has to do with cycles.

CANADIAN INTERNATIONAL

I didn't want to pick the now infamous Fifty Proof, but because of the way I handicap, and all the angles I consider, Fifty Proof has as good of a chance as anything in this field. This is jockey Justin Stein's biggest race ever, and I do give the connections Kudo's for sticking with him. The horse is vastly improved, and seems to love the lawn and the distance. One thing that could hurt him though is weight. He is picking up 9 pounds, while the horse who beat him last time out, Redwood, is picking up 7. Redwood though is more likely to bounce. The horse to beat is Chinchon.

As an aide, I wonder if the Stewards would at least put up the Inquiry sign if Fifty busts through the gate before the other horses are dispatched today. My guess is yes, and it would rightfully lead to a disqualification this time around.

It is still going to be hard for me root for a horse owned by a bunch of Woodbine board members who wound up receiving extraordinary consideration by the track Stewards and then the Ontario Racing Commission.


Science Stuff from MSNBC: THE SCIENCE OF HORSE RACING
Interesting stuff about the positioning of a jockey on a horse. It explains why a jockey out of the stirrups gives the horse no chance to win.


THIS IS THE BEST WAY TO CLEAN UP CHEATING: TRAINER FACES FELONY CHARGES FOR INJECTING HORSE

Prosecutors have brought criminal charges for a horse-racing violation - believed to be a first in the state of Iowa.

Brian Muse faces three felony counts of cheating at a gambling game for allegedly injecting two animals with unknown substances Sept. 24, hours before their quarter-horse races at Prairie Meadows.

Muse denied it. The Stewards let him go. But tapes showed up. Caught in the act.

Maggi Moss has her panties in a knot, saying this is an abuse of power. She also said that racing authorities are set up to be stricter than any court. Really? When was the last time a trainer was sent to jail by a racing commission?

The reality is that there is defrauding of the public happening here because, people bet their money on races. There is also defrauding of the other horsemen who have clean operations that are run by the book.

A jail sentence could be what is needed to scare the bejeebers out of the cheaters.

By the way, one of the horses injected on tape won a $68K stake race and the other was third is a race with a purse of over $140K.

The horses in question did not test positively, which is not a shocker. Trainers generally stay clear of drugs that are tested for. The big question is what was in the syringes?

It surely wasn't a placebo which was given to fool the horses into believing they were drugged. I don't think horses are that smart.

What I find to be the biggest problem here, is the horsemen's attitude that this should stay out of criminal court. If I was a horseman who trained clean, I would want criminal charges to weed out the cheaters. It makes me wonder if this is not just a rare occurrence but a very widespread one.

Jockeys At Fort Erie Band Together To Make The Wrong Decision

Emotion sometimes leads to stupidity, and stupidity reigned supreme in the jock's room at Fort Erie on Tuesday. For those who don't know, leading jockey Krista Carignan was abruptly taken off her mounts because it was confirmed after a lunch time meeting with the Stewards that she committed her fourth whipping violation of the year on Sunday.

The new whipping and urging rules in Ontario state that the driver or jockey is immediately indefinitely suspended after the fourth violation. Thems the rules, like it or not.

But the jockeys, who have been complaining about the new rules all year long, decided that it was time to take a stand. They banded together and refused to ride any of Carignan's mounts.

First off, the act of getting licensed for jockey, groom, trainer, etc. implies that you will abide by the rules of racing. In other words, the jocks had no grounds to react like they did, though I do not believe they broke any rules by colluding the way they did.

But who did they hurt with this decision? Just about everyone except the ones they have the beef with (The Ontario Racing Commission). Trainers get horses ready for specific races. Carignan being the leading jockey most likely had mounts that would have made relatively substantial money that afternoon. The trainers of Carignan's mounts were all denied an opportunity to make their profits.

The owners got screwed. Probably the odd one showed up to watch their horse in person (scratches were not announced until around the 2nd race as Carignan's first mount was in the 3rd race). Of course, they had to pay for Lasix, but they also pay the day pay that keeps the backstretch going. Now they all have to wait at least another week for perhaps a not so good spot to run in.

Horse racing's growth depends a lot on satisfied owners. They bring friends and family to the track, some owners are potential big owners down the road, and of course friends and family are potential new owners and new horseplayers.

When a track is offering purses on the lower end of the scale like Fort Erie, these unnecessary speed bumps can only do damage.

And the last thing that Fort Erie needs is any speed bumps as they struggle for survival. Handle seems to be down this year (as it is for North America collectively). And Tuesday is Fort Erie's biggest handle day.

Handle for Fort Erie is dependent on two main things: competition and field size. The last thing Fort Erie needed was 6 or 7 unnecessary scratches that resulted in already short fields to be much shorter.

I do agree with the jockeys on their points. Yes, it seems that whipping violations are open for too much subjectivity and also cause jocks to worry about too many things when they are trying to win a race (Carignan's fourth violation was simply holding the whip too high...talk about walking on egg shells), and the fines being equal at both Woodbine and Fort Erie are relatively greater at Fort Erie because of the much larger purses at Woodbine.

I also believe that whipping violations should be subject to immediate inquiry before a race is made official. If a jockey is "cheating" to win, the horse should be DQ'ed. Lets face it, if a jockey was found using a buzzer during the race on the tapes, the horse would be thrown out.

The Stewards turned the indefinite suspension to three days and a years probation, so maybe the jockeys move of not accepting mounts intimidated them and perhaps they will revisit the way the rules are written.

I've made this point before, but as a bettor, I hate these rules because if my horse needs to be whipped to win, I want it whipped without the jockey doing a count in his or her head. Ontario has already moved to a more human whip. And of course, if I thought the horse was suffering due to whips, I would be totally against them (the welfare of the animal is extremely important but I think these rules go too far as a way to appease the PETA types). I guess what I'm trying to say is if whips are bad for the horse, then ban them outright, if not, amount of hits shouldn't even be looked at.

The only good thing that came out of this is Fort Erie got some press. Maybe a few gamblers found out that they still race horses in Fort Erie.


Woodbine Has Momentum

I'm definitely noticing an increase in handle at Woodbine. Lots of it has to do with being featured on TVG. The big fields are helping. Maybe even Race Night on the Score is helping as well. They are probably getting a boost because they are now back on RGS's betting schedule. RGS is an offshore rebate shop that caters to bettors who wager in the millions each year.

Woodbine underperformed plenty under David Willmot's leadership. Things have improved under Nick Eaves, and they have a chance to really blossom now.

If Woodbine would only lower their takeout while they have momentum and newbies joining up, they could catapult themselves as one of the major tracks, when it comes to handle, in North America. Their takeouts for triactors are still 27%, which is embarrassingly too high, as it shows they aren't interested in keeping customers long term.


Hermaphrodite horse at Hollywood Park? He/she/it (Mo Steam) can't run in straight filly races. I guess if I was a hermaphrodite in a public sauna, I'd want Mo Steam too.


Balmoral's 15% Takeout On Pick 4 Successful So Far
According to Pull The Pocket, handle is up 40-50% on that bet.

I hope the management at Woodbine, and especially Fort Erie are taking notes.

Fort Erie still has takeouts of 26.2% for exactors and doubles. If they fail, this will stand out as a major reason. You need to send a customer home with some money, or they won't come back too fast, if at all.


Too Bad Horse Racing Can't Harness This And Get Horseplayer Out Of It
British Columbia launched their now legal online gambling site on Thursday. It lasted only a few hours before it was flooded by too many site hits forcing it to shut down.

Players last playing online poker and blackjack far longer than they do playing horse racing. And even though the games are unbeatable in the long term, they attract gamblers. The learning curve also is a huge factor and keeps players from giving horse racing a fair chance. But still, horse racing with a 21% takeout is unbeatable, so if you have to gamble, why not have fun and last as long as possible?

Horse Racing Needs More Objectivity

There is a lot of subjectivity when it comes to making many rules in laws whether they be in sports or in "real life." For example, in baseball, the rules could easily be 5 balls for a walk, 4 strikes for a strike out where a foul ball on the fourth strike counts as a whiff. Even the size and shape of the strike zone is subjective.

But once the rules are in place, there should be little need for subjectivity by those who enforce the rules, especially in today's day and age with high definition replay abilities and the reality that almost every situation has happened before (when it comes to the major sports, including horse racing).

I started losing interest in baseball when players became loyal to dollars over teams, but what really pushed me over the edge to ignoring baseball was baseball's dissing of modern technology. I remember when the realization hit me, I was at a Blue Jays game sitting directly behind home plate. High enough so that I could see the ball go directly over the plate. The umpire must have been suffering from astigmatism. Balls that were catching the outside of the plate were ruled balls, but balls clearly missing the inside of the plate by as much as a foot were called strikes.

Yes, ever since I followed baseball I heard that every umpire has his own strike zone. Well screw tradition, that is just unacceptable today, so I walked away. Baseball can easily rectify things by using high tech lasers, not only over home plate but also on the foul lines.

That recent perfect game that was taken away by a very bad call, should have been reversed immediately using instant replay. But this is not a baseball blog, lets move on to horse racing.

Disqualifications in horse racing are as subjective as they come. There seems to be no consistency. The exact same thing could lead to a DQ one day and no change the next day. Consistency at one track is bad enough, but when looking for it from track to track, forget about it. This really needs to change. In 2010, horse races shouldn't appear to be determined by a coin toss between blindfolded judges.

Define exactly what a foul is, and don't leave anything to the imagination. Horses can only move in a limited amount of directions, and jockey intent can easily be determined by watching a high def replay.

And what about Ontario's new whipping law? I believe it states (I looked for the exact rule but couldn't find it) that a horse can be whipped up to two or three times in succession, and then must have "time" to react. How much time is time? A nano-second?

The reason I bring this up is that it was brought to my attention, by one of my blog readers, that Eurico Rosa Da Silva whipped the Queen's Plate winner, Big Red Mike, a total of 17 times in the stretch. Twice whacking the horse 3 times in succession. And the time given for the horse to react reminded my of playing steam boat quarterback against a shady fast counter.

I don't ever remember defining how long a steam boat "one banana" was supposed to be, but I do know that those who said banana as if it were a one syllable word were frowned upon.

I want to add right now that I'm no fan of the whipping rules. As a bettor, I want the jockey to carry the horse over the wire if it comes to that. They are using the new feather whips, that should be fine enough...again, my subjectivity versus the subjectivity of what is a rule to begin with. However, rules are rules, and objectivity needs to be minimized if not eliminated.

If the whipping rule is in place because of public perception, Da Silva's 17 hits, the slow mo replay from the tote board side sure didn't look good. And if it was enough to get him fined, than why shouldn't it also get a horse DQ'd. I believe in harness racing, whip violations can get a horse tossed, but not thoroughbred racing in Ontario. Why? Again, the subjective way rules are made.

Isn't excessive whipping a form of cheating? Much like the use of a buzzer? I'd rather bet on the horse that got whipped 17 times in a stretch run against a horse that was whipped only 10 times. I'm going to take the wild assumption that whipping actually increases a horse's chance of winning in most cases, or whips would be abolished by now.

Da Silva, by the way, was fined a whole $200 last year for excessive whipping when winning last year's plate on Eye Of The Leopard. This was before the new urging laws came into effect. This year, if in fact Da Silva did violate the rules after the Stewards subjectively look into it (because the rules allow for subjectivity), it could cost him a lot more dough.

Again, I'd like them to lose the rule, but rules are rules are rules. I'm hoping that Da Silva did nothing wrong to violate the rules by the way (again 17 times in the stretch is fine with me, if I have my money on the horse), but I sure would like to know exactly what those rules are.

This brings me to the case against Bruno Schickedanz. Yes, it was deplorable for him to bring in a 13 year old horse who made $1.6 million in purses back to the races, especially after a three year absence (though people were upset he ran at 8,9 and 10 as well).

However, after reviewing the ORC 2009 Rules Of Thoroughbred Racing, I couldn't find what specific rule he violated. There anything in there about how old a horse can run til or how much time off makes a horse ineligible for life. Certainly there is nothing there about whether he could work out or not.

Possible cruelty? Again, this is a subjective stretch:

15.19 Any act to a horse which, in the opinion of the Stewards, could be deemed
to be an act of cruelty shall be a violation of the rules and the perpetrator is subject to a fine or suspension. In sufficient care or abandonment shall constitute cruelty under this rule.

Was it an act of cruelty to bring in a 13 year old horse for a workout? Where do you draw the line? It is probably more cruel to workout a still sore racehorse who is on the vet list, no matter what age.

The ORC is likely to nail Schickedanz for violation of Rule 24.01 which gives the ORC powers above the law, and the ability to make up rules without having to put them in their 152 page rule book:

24.01 The Commission may impose in its absolute discretion any or all the following penalties for conduct prejudicial to the best interests of racing, or for a violation of the Rules:
(a) Refuse an offender admission to the grounds of an Association;
(b) Expel an offender from the grounds of an Association;
(c) Suspend any Commission licensee for any length or time it may deem proper;
(d) Impose a fine or penalty they deem proper.
(e) Rule an of fender off the turf for any length of time it may deem proper.

Talk about subjectivity! In other words, according the ORC's rules, they have a God-like ability to be subjective when dealing with things that make them feel uncomfortable (because they didn't have a rule in place to begin with like they should have).

Again, I'm totally against what Schickedanz did, however I do believe that a rule should have been in place. There is no do doubt that what happened with Wake At Noon was prejudicial to the best interest of horse racing, but there should have been rules in place regarding the age of a horse with respect to time off to begin with. I cringe when I see a 10 year old mare entered who hasn't raced in 4 years, regardless of how many races or how much money she won. This is not something that should happen (if I can interject my subjectivity for a minute), and a specific rule should be in place. This situation has happened before, it isn't a blip on the radar.

But as it stands now, I think most people agree that bringing back a horse at 13 who hasn't raced in 3 years is completely against the best interest of the sport. But where is the line? Is it a 2 year layoff, a one year layoff, a three year layoff, and what about the current age of the horse. It seems OK to bring back a 5 year old that was laid off since two, or even a 5 year old first timer starter. No matter, make a rule already.

The ORC hasn't ruled as yet, however, Woodbine Entertainment used what appears to be their subjective powers to ban Schickedanz and trainer Tom Marino indefinitely.

I went through the 51 page WEG Thoroughbred Rule Book as well.

When it comes to shipping into the track, there are in-slip rules, which may or may not have been circumvented in this case. There is also a Coggins test requirement as well. Again, those look like the only things where violations could have occurred.

The only rule I see that pertains to Wake At Noon is 6.16, but Wake At Noon appears to be exempt from it:
Any horse 10 years or older that has run for a claiming price under $12,500 in the past 12 months and has not won a race in the past 12 months will not be ineligible to run at Woodbine.

The way it is worded would have made Wake At Noon eligible to race. The word "and" is key, it is not "or." Wake At Noon didn't race at all during the last 12 months, so he definitely didn't run for under $12,500 claiming.

I'm sure the rule implies that a horse who has missed a year and is over 10 isn't eligible to race, but that isn't what it says.

And in theory, if he had gone to Mountaineer as Schickedanz intended and won a $5,000 claiming race, he would have become eligible regardless to race at Woodbine, which again, rubs everyone with a shred of decency, the wrong way.

I also don't see anything about whether an ineligible horse can't workout or even have a temporary stall.

Technically, a horse is not eligible to run until it makes time in a workout at the most 30 days before a race, if off a layoff. But obviously, these horses need to workout to become eligible, so even if a horse is ineligible to race, doesn't mean it isn't ineligible to workout.

There are also all kinds of ponies on the track (many former race horses) who are in their teens. They get stalls.

IFs rule in the land of subjectivity. If Wake At Noon hadn't broke down, Woodbine would have most likely taken no action. If Wake At Noon had his fateful workout at Mountaineer, I do believe no action from Woodbine would have occurred. Had it been at Fort Erie, that is tough to say what Woodbine would have done. They probably would have the same wait and see what the ORC is going to come up with approach that Fort Erie is using right now.

Speaking of IFs, it was uncomfortable for me to watch Da Silva get off Big Red Mike as he suffered from heat exhaustion after the Plate. I know that the odd horse can collapse and die from heat stroke. Now what if he had suffered that fate? The 17 stretch whips would definitely come into play, and Da Silva would be taking a lot of heat away from Schickedanz.

I want to know that Da Silva didn't over whip, without it being a guess, and I want rules in place that make it so owners like Schickedanz can't even think about bringing a 13 year old back after a 3 year lay off.

Horse racing needs rules to objectively cover as many IF scenarios that it can envision, and the rules shouldn't be subject to subjectivity.

I Told You So: Marsh Side Reinstated

I wrote this right after the Northern Dancer at Woodbine last fall:

Stewards Flipped The Coin And Got It Wrong In Northern Dancer
Unfortunately, on this Youtube video you don't get to see the head on (you can if go to Cal Racing or HPI replays), but the disqualification of Marsh Side was a bad call. There was no apparent bumping between Marsh Side and Quijano, and both jockeys were hitting with right hand while moving to the inside in tandem. If anything, Quijano would have squeezed Champs Elysee regardless of whether Marsh Side was in the race or not. Again, if the Stewards have to look at a race for more than two minutes, they should let the results stand.

The eventual winner had the common sense to get away from the rail as his jockey anticipated the tight quarters. Champs Elysee did get shut off, but I have a problem blaming Marsh Side for it.
I am pretty sure that this call will be overturned, and the bettor who picked the best horse in the race, will wind up getting screwed.

Well guess what?

Disqualified stakes winner reinstated

This disqualification was absolutely a horrible call. And it occurred on a race that had over $600,000 bet on it, plus it was the first leg of a Win 4 that had over $100,000 bet into it.

The question is how did the Stewards see something that didn't happen? It was a lengthy inquiry as well if memory serves me well.

This is why Stewards should be given 3 to 5 minutes tops to make a decision. And only use visual evidence. There is really no point to hear a jockey plead his or her case and give what must amount to a very biased opinion, possibly swaying a Steward or two.

The public wants decisions based on visual evidence. They can live with it. And given a choice, I'm sure most bettors could live with a horse being thrown out in an appeal, but this reinstating the best horse who was thrown out is simply (pardon my French) bull crap.


Another Good Article On Current Fort Erie Leading Rider Krista Carignan
Good to see a jockey go to the tapes in an effort to improve her game. And learning from a trip handicapping trainer isn't a bad move either.



Arlington All Source Handle Down 31%: Purses Slashed
Lets see: High Takeouts (Arlington Ranks 40th out of 69 tracks in HANA's Takeout Ratings). Restricted signal (not all ADWs have Arlington on the menu). A high distribution fee for its signal. And the restricting of ADWs to rebating a maximum of 2%, unless the bettor bets more than a million a year.

In today's betting environment, where many Horseplayers who bet good money are shopping around to give them the best chance to make a profit, the way Arlington is doing things is a recipe for disaster. And polytrack doesn't help, but by far, that isn't the main reason the track had such dismal results.

The Horseplayer has been awakened, and racetracks better realize this or suffer the consequences.