Bettor-Friendly Legislation Passes Kentucky Senate

By a vote of 33-1, the Kentucky State Senate has given their stamp of approval to Kentucky House Bill 607, which modernizes the taxation of pari-mutuel wagers and, in a major victory for horseplayers, eliminates the dime breakage than has been the standard for many years in favor of penny breakage. The change in the breakage will put more money into the pockets of horseplayers and is the first such measure to be introduced in the United States. The lone dissenting vote came from Republican Senator Whitney Westerfield.

“For more than a century, horseplayers have never received a full winning dividend and today the General Assembly in Kentucky affirmed that it is beyond time to change that and respect horseplayers anywhere betting on races from Kentucky,” said Patrick Cummings, Executive Director of the Thoroughbred Idea Foundation (TIF), which has championed the cause dating back nearly four years.

“Across just the last three decades or so, approximately $1 billion has been retained from winning bets across America. The passage of HB 607 will put some of this money back in the pockets and accounts of winning bettors from future bets.'

“We are thankful for the leadership of bill's House sponsors, Representatives Adam Koenig and Al Gentry, and Senator Damon Thayer in guiding its passage.

In addition to the favorable breakage rules, HB 607 calls for taxation on pari-mutuel wagers at 1.5%, the same rate assessed on Historical Horse Racing (HHR) machines. The standardization of taxation means that bets made through and ADW by Kentucky residents will be taxed at 1.5%, up from 0.5 %.

“Horse racing must relentlessly pursue every method to make its product as competitive as possible,” said Bernick. “The market pressure on racing is stronger than ever with the rapid legalization of sports betting across the country. We hope that operators realize the importance of retaining all customers and driving their participation through the presentation of competitive racing with competitive pricing.”

HB 607 was sponsored by Representative Adam Koenig. A house committee approved the legislation Mar. 16 before referring it to the Senate for its consideration. The bill now returns to the House for concurrence, but it is expected to sail through and head to the desk of Governor Andy Beshear for his signature.

The Kentucky Equine Education Project (KEEP) released a statement Tuesday, applauding the General Assembly for the passage of HB 607.

“A tremendous amount of work went into crafting this new tax policy and KEEP is grateful to the legislators who served on the Pari-Mutuel Wagering Taxation Task Force for the time and effort they put into fully understanding the economic structure of Kentucky's horse industry,” the statement read. “We would also like to applaud Senate Majority Floor Leader Thayer and Representative Koenig for their leaderships as co-chairs of the task force. The resulting legislation was able to strike a delicate balance between increasing revenue for the state, while at the same time not arbitrarily raising tax rates in a way that would damage the economic success of the industry.

“The entire horse industry was engaged in this process and KEEP was proud to work closely with legislators to ensure that they had access to the full picture of what economic benefits the industry has on the Commonwealth.

“KEEP will continue working on behalf of Kentucky's entire horse industry and community to advocate for policies that benefit everyone within the industry's economic ecosystem. Growing the success of the industry's more than 60,000 jobs and $6.5 billion economic impact on the state benefits all Kentuckians.”

Once signed off on by Beshear, the provisions of the bill are due to take effect come August.

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Weekly Rulings: Mar. 22-28, 2022

Every week, the TDN publishes a roundup of key official rulings from the primary tracks within the four major racing jurisdictions of California, New York, Florida and Kentucky.

Here's a primer on how each of these jurisdictions adjudicates different offenses, what they make public (or not) and where.

California
Track: Santa Anita
Date: 03/23/2022
Licensee: Liparit Gharibyan, owner
Penalty: Reinstatement of good standing
Violation: N/A
Explainer: Owner Liparit Gharibyan, having complied with the provisions of California Horse Racing Board rule #1876 (Financial Responsibility–$146.13 to So. Cal. Equine Foundation) is restored to good standing. LATS #21 ruling issued at Santa Anita Park on January 15, 2021, is set aside.

Track: Santa Anita
Date: 03/24/2022
Licensee: Umberto Rispoli, jockey
Penalty: Four-day suspension
Violation: Failed appeal to overturn prior careless riding ruling
Explainer: Official Ruling of the Board of Stewards Santa Anita Park Winter/ Spring Meet (Association) March 24, 2022 (Date) LATS Ruling #76 Having received notice of a Proposed Decision adopted by the California Horse Racing Board that the appeal of DMTD Ruling #45 (August 12, 2021) has been overruled, the original ruling is reinstated. Jockey Umberto Rispoli, is suspended for 4 racing days (April 1, 2, 3 and 8, 2022).

Track: Santa Anita
Date: 03/24/2022
Licensee: Ron McAnally, trainer
Penalty: Thirty-day suspension (all 30 days stayed)
Violation: Substance violation
Explainer: Having received notice of a Proposed Decision adopted by the California Horse Racing Board Trainer Ronald McAnally, who started Roses and Candy in the third race on November 22, 2020, at Del Mar Thoroughbred Club, is suspended for thirty (30) days pursuant to California Horse Racing Board Rule #1887(Trainer or Owner to Insure Condition of Horse) for violation of California Horse Racing Board rules #1843(a)(b)(d) (Medication, Drugs and Other Substances) and #1843.1(a)(Prohibited Drug Substances – 7- Carboxy – Cannabidiol). In accordance with the Proposed Decision, all thirty (30) suspension days are stayed and Ronald McAnally is placed on probation for one year from the date of this ruling and may not have any violation of Class I, II or III drug positives. If Ronald McAnally violates the terms of his probation, the 30 days of stayed suspension shall be imposed following a noticed  hearing. (Read more about the original ruling here and about the regulatory nuances of CBD oil here and here).

New York
Track: Aqueduct
Date: 03/25/2022
Licensee: Eduardo Jones, trainer
Penalty: Seven-day suspension and $500 fine
Violation: Medication violation
Explainer: Having received a report from the NYS Gaming Commission Equine Drug Testing Laboratory of the finding of Phenylbutazone in the post-race blood sample taken from Horse “Pendolino”( #8 ) which finished first (1st) in the 4th race on February 4, 2022, and having waived his right to appeal, Owner/Trainer Mr. Eduardo Jones is suspended for seven calandar days effective March 27, 2022 through April 2, 2022 inclusive, and fined the sum of five hundred ($500.00) dollars. Furthermore, the Stewards order horse “Pendolino” disqualified from any part of the purse and the purse redistributed as follows:

  1. (#9) Sweet Mission
  2. (#6) Chaysenbryn
  3. (#4) Left Leaning Lucy
  4. (#1) Kerik
  5. (#5) Shanes Pretty Lady
  6. (#3) Alpine Queen
  7. (#2) A Ring Thing
  8. (#7) Mia Bea Star

Ordered that during your period of suspension, you shall not directly or indirectly participate in New York State Pari-mutuel horse racing. You are denied the privileges and use of the grounds of all racetracks, you are forbidden to participate in any share of purses or other payment. Every horse is denied the privilages of the grounds and shall not participate in pari-mutuel racing in New York State, that (a) is owned or trained by you, or by any individuals who serves as your agent or employee during your suspension; or (b) for which you during your suspension are directly or indirectly with training, including any arrangements to care for, train, enter, race, invoice, collect fees or other payments, manage funds, employ or insure workers, provide advise or other information or otherwise assist with any aspect of the training of such horses.

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Kentucky Senate Passes Wagering Bill Which Eliminates Breakage, Streamlines Taxes

The Kentucky State Senate passed HB 607 on Tuesday, a bill which streamlines the various taxes on horse racing betting but leaves historical horse racing alone.

Senator Damon Thayer, who co-chaired with Rep. Adam Koenig the task force that led to the creation of HB 607, told the Senate Tuesday the bill: “I believe has us on track to be the most lucrative year-round racing circuit in North America within the next 18 to 24 months.”

HB 607 calls for taxing pari-mutuel wagers off the top at 1.5 percent. That is the same rate currently assessed for HHR gaming. However, the bill raises the current rate for bets placed through online platforms (or Advance Deposit Wagering, commonly referred to as ADWs) from 0.5 percent. The tax rate on simulcast wagers placed at a Kentucky track on an out-of-state race would drop from 3 percent. The majority of bets are now placed through ADWs, while simulcasting has shrunk considerably as horseplayers opt for the convenience of wagering online.

Koenig has received national attention and praise from horseplayer advocates for being a champion of the virtual elimination of breakage. That's where tracks round winning payoffs down to the nearest dime based on a $1 bet. Breakage under HB 607 requires tracks to pay off to the nearest penny, resulting in more money being returned to horseplayers. Koenig cited the example of 2018 Triple Crown winner Justify paying $7.80 on a $2 Kentucky Derby win bet, a payout that would have been $7.92 without the breakage.

The Kentucky Equine Education Project (KEEP) released this statement following the passage of HB 607:

KEEP applauds the Kentucky General Assembly for the passage of HB 607, legislation that will modernize taxation on pari-mutuel wagering.

A tremendous amount of work went into crafting this new tax policy and KEEP is grateful to the legislators who served on the Pari-Mutuel Wagering Taxation Task Force for the time and effort they put into fully understanding the economic structure of Kentucky's horse industry. We would also like to applaud Senate Majority Floor Leader Thayer and Representative Koenig for their leaderships as co-chairs of the task force. The resulting legislation was able to strike a delicate balance between increasing revenue for the state, while at the same time not arbitrarily raising tax rates in a way that would damage the economic success of the industry.

The entire horse industry was engaged in this process and KEEP was proud to work closely with legislators to ensure that they had access to the full picture of what economic benefits the industry has on the Commonwealth.

KEEP will continue working on behalf of Kentucky's entire horse industry and community to advocate for policies that benefit everyone within the industry's economic ecosystem. Growing the success of the industry's more than 60,000 jobs and $6.5 billion economic impact on the state benefits all Kentuckians.

The post Kentucky Senate Passes Wagering Bill Which Eliminates Breakage, Streamlines Taxes appeared first on Horse Racing News | Paulick Report.

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Taking Stock: Country Grammer Boosts Tonalist

Before the G1 Dubai World Cup, Country Grammer (Tonalist) was already a Grade l winner in North America, but that race that he won on May 31, 2021, the Gl Hollywood Gold Cup S. at Santa Anita, was worth only $180,000 to the winner.

Since then, Country Grammer has made only two starts, both abroad and both fruitful: he was second in the G1 Saudi Cup, a $20-million race in Riyadh on Feb. 26, earning $3.5 million; and he won the $12-million Dubai World Cup Saturday, collecting almost $7 million, giving the strapping colt who races for the partnership of Zedan Racing, WinStar and Commonwealth Thoroughbreds total earnings of $10,837,320.

Country Grammer's prize money from the Middle East has catapulted his Lane's End-based sire Tonalist from the back of the field to second place on North America's general sires list with year-to-date progeny earnings of $11,772,495, behind leader and fellow Lane's End sire Quality Road's $13,392,856. Quality Road himself was the beneficiary of a $10-million Middle Eastern boost, as it was his son Emblem Road who won the Saudi Cup from Country Grammer.

For context, Spendthrift's mighty Into Mischief, the leading sire of 2019, 2020, and 2021, sits in third place at the moment with progeny earnings of $6,779,549.

Quality Road and Into Mischief are top-class stallions and are fully booked; the former stands for $150,000 and the latter for $250,000. Tonalist, in contrast, isn't a proven horse, has only three crops racing (not including current 2-year-olds), and has a modest $10,000 fee this year, so he stands to benefit the most from the accumulated earnings of Country Grammer with half the breeding season still ahead of him.

In light of Country Grammer's exploits, a re-examination of Tonalist reveals a horse with impeccable credentials and one who has potential to separate himself from others standing in his fee range. For one, he's a son of the outstanding Tapit, who is establishing himself as a sire maker, notably with Constitution; he's a Classic winner at 12 furlongs (Gl Belmont S.) who also won Grade l races at 10 furlongs (Jockey Club Gold Cup) and eight furlongs (Cigar Mile); he's a standout physical specimen with significant scope and size, attributes he's clearly passed on to 5-year-old Country Grammer, a member of his first crop; and he's from the immediate family of Horse of the Year Havre de Grace, which is to say from the blue-blooded Toll Booth branch of Missy Baba, his fourth dam and also the fourth dam of A.P. Indy. Because Tapit is an A.P Indy-line sire, inbreeding to Missy Baba lurks in the background of Tonalist, too.

Essentially, Tonalist ticks every box, except for perhaps early maturity, and he is the sire of eight black-type winners so far through his first three crops. Among them is the good first-crop filly Tonalist's Shape, who won her first five starts from late September at two to late February at three, when she took the Gll Davona Dale S. at Gulfstream. It's worth noting that both she and Country Grammer are bred on the potent Tapit/Storm Cat cross.

Country Grammer

The type of horse that Country Grammer has developed into is exactly what you'd expect from Tonalist, and this could actually benefit the stallion moving forward. Early maturity, which is prized at 2-year-old sales, isn't exactly what Tonalist is about–he only made one start at two himself and was unplaced, though Country Grammer did sell and win at two. But Tonalist does have the potential to deliver a late fall 2-year-old or an early spring 3-year-old with the potential of staying 10 furlongs, which is what's increasingly sought after these days as the most promising Classics contenders' schedules are delayed to coincide with the high-points races for the Gl Kentucky Derby that are held in March and April. And continued development through four and five can have its own lucrative benefits these days, as Country Grammer has so aptly shown.

Bred by Scott and Debbie Pierce at their Omega Farm in Kentucky, Country Grammer was a $60,000 Keeneland September yearling and a $450,000 OBS April 2-year-old. He made his debut as an October 2-year-old at Belmont at a mile for trainer Chad Brown and owner Paul Pompa Jr., running fourth. He returned at Aqueduct in November to win his next start, a 9-furlong maiden special, which is as far as 2-year-olds are asked to run in North America and a strong indicator that 10 furlongs would be well within reach at three and beyond.

Aside from Tonalist, Country Grammer's pedigree contains some internal structural elements that indicated this as well. For instance, he is inbred 3×4 to Pleasant Colony and 5×5 to Nijinsky –two strong markers for stamina in pedigrees.

Moreover, his tail-female line goes back to filly Triple Crown winner Chris Evert, Country Grammer's fifth dam; Chris Evert won the GI Coaching Club American Oaks back in 1974 when that race was contested at 12 furlongs and held more prestige than the now-Gl Kentucky Oaks, which was a Grade ll race at that time at a mile and a sixteenth.

Juddmonte got into this family when it purchased Chris Evert's Nijinsky daughter Nijinsky Star–Country Grammer's fourth dam–for $700,000 at Keeneland November in 1987, carrying a foal by Conquistador Cielo, and the internationally renowned farm shaped this branch of Chris Evert that leads to Country Grammer.

This family includes, among others, the Juddmonte multiple Grade l winners Sightseek, by Distant View, and Tates Creek, by Rahy, both fillies produced from the Nureyev stakes winner Viviana, a daughter of Nijinsky Star.

Viviana is a full sister to Willstar, Country Grammer's third dam. Like Viviana, Willstar also produced a highest-level filly for Juddmonte in G1 Prix de la Foret winner Etoile Montante, a daughter of Miswaki. Also like Viviana, Willstar was mated to Juddmonte homebred Distant View, producing Prima Centauri, Country Grammer's second dam and a mare that's closely related to the aforementioned Sightseek.

Prima Centauri, unplaced in two starts, was culled by Juddmonte in 2001 and eventually came into the hands of Dixiana, which paid $270,000 for her at Keeneland November in 2005. She was carrying a colt by Forestry, who must have physically impressed Dixiana as a weanling, because the mare was bred back to Forestry in 2007, producing Arabian Song, Country Grammer's dam, in 2008.

The Forestry full brother to Arabian Song made $425,000 as a Keeneland September yearling but never raced. Arabian Song sold for only $40,000 at Keeneland September to Rabbah Bloodstock, but won one race from six starts, a $40,000 maiden claimer at Churchill.

The Pierces acquired Arabian Song after her racing career and bred her first five foals. Among them is the 4-year-old Runhappy Grade lll-placed filly Joyful Cadence, who'd sold for $90,000 as a weanling at Keeneland November in 2018 before making $235,000 as a yearling at Keeneland the next September. The Pierces also sold Arabian Song, in foal to Wicked Strong, at Keeneland November in 2018 for $5,000, to Abdul Aziz Al-Ateeqi, who sent the mare to Saudi Arabia. The Wicked Strong foal is a 3-year-old filly named Gharz (KSA), who is placed in four starts.

Country Grammer Ownership

The topsy-turvy auction history and ownership changes of this immediate family that include Saudi Arabian involvement extend to Country Grammer as well.

After Pompa died in October of 2020, his stock was dispersed at Keeneland January in 2021. Country Grammer, who, as noted earlier, had sold for $450,000 as a 2-year-old, had gone on to win the Glll Peter Pan S. at three and was among those in the sale. Elliott Walden, president and CEO of WinStar, knew of the colt's talents as he'd been in training at the farm, and he was able to surprisingly purchase the colt for the bargain price of $110,000 at the dispersal.

Sent to Bob Baffert, who'd trained Justify for WinStar and partners and had Into Mischief's Life Is Good as the 3-year-old stable star for WinStar and CHC Inc., Country Grammer blossomed last year to win the Hollywood Gold Cup S.

However, both Country Grammer and Life Is Good were transferred later to Todd Pletcher after “Bob got in the penalty box” after the Medina Spirit controversy at Churchill, Walden explained by phone Monday, after arriving in Miami from Dubai. Walden said that Country Grammer was unable to start for Pletcher, however, after sustaining a minor ankle injury and was sent back to WinStar to recover. He was then sent back to Baffert.

Somewhere around this time the colt's ownership changed as well. First Commonwealth, which sells microshares in horses, purchased 30% of Country Grammer, leaving WinStar a 70% stake, until Saudi Arabian Amr Zedan offered to buy the entire horse.

“Amr Zedan is great for the industry and so easy to deal with,” Walden said. “He just told us to put a price on the horse, and we agreed to sell 50% of the horse to him, so we–WinStar and Commonwealth–paired down our interests to bring him aboard.”

And the rest is interesting history. Flying the same Zedan silks as Medina Spirit, Country Grammer gave Amr Zedan some revenge on Life Is Good–the same colt Medina Spirit had chased early in his career.

Sid Fernando is president and CEO of Werk Thoroughbred Consultants, Inc., originator of the Werk Nick Rating and eNicks.

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