August, 2022 | Horse Racing Free Tips

Racing and Gaming Conference Focus Shifts to Horse Racing’s Future

By Scott Finley

After an opening day of casino and conventional gaming panels, the focus of Wednesday sessions was on developments in racing, including a review of the newly launched Horseracing Integrity and Safety Act and a thoughtful panel on how fixed-odds betting can positively impact the American horseracing industry.

Lisa Lazarus, newly appointed CEO of the Horseracing Integrity and Safety Authority (HISA) spoke of the challenges her organization has faced in launching the initial phase of the Federal Statute that created HISA.

Of the 21 states that host live racing, 17 state racing commissions have signed on and voluntarily registered with HISA, with over 34,000 horses and 28,000 owners on board. Yet there have been federal court cases filed in Texas and Kentucky challenging the constitutionality of the federal statute, and a more recent case in Louisiana seeking a temporary restraining order on the implementation of HISA regulations in that jurisdiction.

All three cases lost in the first round but are being appealed. To date, HISA has incurred over $1.8 million in legal fees fighting these legal challenges, making a considerable dent in the organizations initial $14 million annual budget.

The HISA Board anticipates further legal challenges, but has committed to implementing corrections to many of the issues that have generated complaints from various sectors of the racing industry.

“We still have several transparency issues that need to be addressed, said Lazarus, ” and we will.”

“We are a very young organization created by federal statute,” Lazarus continued, “but we are learning as we go and it will get better.”

Fellow panelist Ed Martin, President and CEO of the Association of Racing Commissioners International (ARCI) commented, “It's been a little messy [with the start-up], but it's gotten much better since Lisa showed up.”

At the heart of the disagreements over HISA, across all facets of the industry, is the process of turning over what has aways been a state regulated industry to a federal agency. However, owners, trainers, racing commissioners and multiple industry bodies are all in agreement that uniformity of regulations is essential for racing to thrive, grow, attract new fans and shed some of the negative images that have arisen over the past decade.

Speaker John Kimmel, a leading trainer and licensed veterinarian commented, “On the surface, two barometers here at Saratoga look good: NYRA stands to handle over $850 million for the meet and the average price of yearlings at the recent sales was over $400,000. But, there are looming problems out there.

“Lack of uniformity in state regulations creates havoc for horsemen that race in multiple jurisdictions. We need uniform medication withdrawal times. We also need to overcome differences in managing enforcement for on-track versus off-track stabled [race] entrants.”

HISA can resolve these multitude of different regulatory matters, but all states must come on board for the process to be effective.

Kimmel also suggested the HISA must do a better job of communicating with industry stakeholders and perhaps could create a marketing and public relations department.

“There are lots of rumors out these and complexly inaccurate statements,” Lazarus agreed. “We want to make racing better through uniformity and stability.”

New York is one of the four state racing commissions yet to come to an agreement to fully embrace HISA. Speaker Rob Williams, Executive Director of the New York State Gaming Commission (NYSGC), explained, “NYSGC has not accepted two of the tasks requested by HISA [registering participants by NY State employees and fully staffing drug testing collection].”

Overall, though, NYSGC has been supportive, providing staff and professional expertise to assist HISA in developing rules and regulations. Williams and Lazarus both anticipate that the differences can be worked out and that NYSGC and HISA will resolve the issues over funding and that New York State will eventually join the fold.

Panel moderator Alan Foremen, Chairman and CEO of Thoroughbred Horsemen's Association, “The road to uniformity is so difficult.”

“We are making even more effort to listen to the industry on the pending anti-doping programs,” Lazarus stated. “We are a young organization created by Federal Statute; learning as we go. It will get better.”

Perhaps most encouraging was the level of respect that all panelists and their respective organizations had for Lazarus' efforts to date. All seemed to reflect that all will improve once the growing pains of HISA are worked out.

Ed Martin concluded, “Once the industry begins to trust HISA, that's the key to getting there.”

“Fixed Odds and the Future of Horseracing” the concluding panel on Wednesday, brought together racing executives, service providers and fixed-odds operators to offer their opinions on the current state of fixed-odds horse betting, but more importantly where and how the racing industry can capitalize on the stratospheric growth of legal sports betting by coupling both pari-mutuel and fixed odds betting to the current sports betting content menus.

Dallas Baker, Head of Business Development for BetMakers US, the operator first to market with fixed-odds betting at Monmouth Park, was adamant. “This is THE MOMENT for racing in the USA. We are at a critical point moment.”

“Just think how Illinois Horsemen felt watching the Arlington Million at Churchill Downs this past weekend!” Baker exclaimed. Baker contended that like in his native Australia, fixed odds betting – primarily on win and place markets only–can revitalize a declining USA racing industry, capture younger bettors and fairly remunerate horsemen for purses, so long as the commercial and tax structures are on a level playing field for all operators and content providers.

Colorado is the only state besides New Jersey to have approved and regulated fixed odds on horse racing. Moderator Dan Hartman, Director of the Colorado Division of Gaming, explained how his agency consulted all segments of the racing industry, especially horsemen, and established a tax and regulatory scheme that returns a fair share to purses at Colorado's racetrack. The fixed-odds law sunsets in 18 months unless renewed by the Colorado Legislature. All stakeholders will be asked to weigh in on the future of fixed odds in Colorado at that point.

David O'Rourke, President and CEO of the New York Racing Association, believes that sports betting is a massive distribution channel for racing. NYRA plans to work with all current sports betting operators on ways in with NYRA pari-mutuel content may be added to current platforms and then see where fixed odds fits in.

NYRA recently concluded partnership deals with Caesars Entertainment and BetMGM to add NYRA horse racing content to those sports betting platforms. Regulatory and banking/funding roadblocks have so far limited the launch to only two states.

Paul Hannon, Senior Vice President Corporate development for PointsBet USA, is also bullish on fixed odds attracting a new audience to racing and building on the growth of online and retail sports betting in 30 states just four years after The Supreme Court overturned the Federal Law {PASPA] prohibiting sports betting in all States except Nevada.

“Racing must reap the benefits of Sports betting's growth,” Hannon said. “I believe that within two years of launch, fixed odds sports betting on racing will become the fifth-most wagered on sport, after NFL, NCAAB football, NBA and NCAA basketball.

“Racing fills a content void, especially this time of year between the end of NBA and the start of NFL when sports betting revenue and interest typically decline.”

Michelle Fischer, Vice President for SiS Content Services, also agrees that fixed odds on horse racing will be a successful product and generate new interest in racing from a younger audience.

“Adding fixed odds racing to existing sports betting platforms will only increase the pie,” Fischer stated.

She agreed with Hannon about the massive potential for racing, essentially a 24-hour per day global sports, nicely filling in the down time between more conventional sports. It has done so in the United Kingdom, Australia and much of Europe. It should be successful in America as well.

“Americans want to bet of American sports and American racing,” Fischer said. “We as an industry must give them the opportunity to do so.

“But we need an open market for content and a fair pricing model [as compared to conventional sports betting] to make this successful.”

O'Rourke summed up NYRA's position on the opportunity for racing to offering fixed odds to reach a newer and younger demographic.

“Racing is essentially an entertainment product, but you cannot lose control of your content.”

Tuesday sessions focused on downstate casino development in New York, with most speakers concluding that two of the three licenses are heavily favored to be warded to Genting Resorts World at Aqueduct and MGM Empire City Casino at Yonkers, both of which are well-established VLT “racino” facilities.

The third, and final downstate license is up for grabs, but unlikely to be situated in Manhattan due to community and business opposition.

At a Tuesday panel on “Sports Betting: What's Next?” speakers reflected on the excessive 51% tax rate in New York on mobile sports betting operators and how that may eventually lead to market decline and further competition. Panelists also echoed many of the same sentiments as expressed at the Wednesday Fixed Odds and the Future of Horse Betting session, as the conclusion of most regulators, including in New Jersey, is that “racing is a sport.”

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Six Weeks In, Panelists At Saratoga Racing And Gaming Conference Ponder The Early Days Of HISA

Six weeks into implementation, the big topic at most regulatory meetings this summer is the Horseracing Integrity and Safety Authority. The Racing and Gaming Conference at Saratoga was the latest to feature a panel breaking down what is and isn't working so far about the new system.

The panel included moderator Alan Foreman, who is the chairman/CEO of the Thoroughbred Horsemen's Association; trainer/veterinarian John Kimmel; Authority CEO Lisa Lazarus; ARCI president/CEO Ed Martin, and New York State Gaming Commission executive director Rob Williams.

Predictably, not everyone agreed on all the topics of discussion. A few key takeaways:

–Foreman pointed out that there was considerable skepticism at the same event last year about whether the Authority would indeed be up and running by the July 1, 2022 deadline set by lawmakers, and whether it would be stopped in its tracks by constitutional challenges. Foreman, who is also an attorney, agreed that litigation would continue to be a part of the organization's future and that it may still be going on at the time of next year's conference. He also believes the constitutional question should be largely decided after two federal judges sided with the Authority on constitutional questions.

–Martin said that while his organization, which is comprised of racing commissioners and staff, are supportive of HISA, they're not afraid to point out problems they see with its implementation so far.

“My members don't think this was the right way to go, but we're here now and they don't want this to turn into a mess,” he said.

Martin characterized the plaintiffs in the federal suits as desiring only correct execution of the Authority. For his part, he voiced concerns about transparency of the organization, which has been a touchy issue for him from the beginning. Martin said one RCI member asked to sit in on a meeting of the committee responsible for drafting the anti-doping and medication control rules, which will be going to the Federal Trade Commission this week for approval and should roll out Jan. 1. The member was told they could not attend. Martin also mentioned that some groups (though he did not specify who) had been required to sign non-disclosure agreements with the Authority prohibiting them from discussing their interactions with the Authority.

Additionally, Martin expressed frustration with the oft-cited timeline for the Authority's creation and implementation.

“What I do know in hindsight, because hindsight is always 20/20, is that the nominating committee wasted five months, five critical months, with a legislative deadline through a dog and pony show about a wonderful search to find the most qualified people [for the HISA boards],” said Martin. “Most of the people were already known. That could have been done in December and we could have had an executive director put in place.”

–Lazarus disagreed with some of Martin's points, and was quick to note that the Authority is in the process of overhauling its website to include some of the wish list items that were in Joe Gorajec's op/ed in the Paulick Report last week.

She said the Authority is also mindful of the need to help all industry participants feel they have a voice in the creation and enforcement of regulations. She estimated that 85% of the suggestions submitted by the Thoroughbred Horsemen's Association on the draft guidance of anti-doping regulations were taken on board and prompted revisions in the current draft.

“We had more time with the anti-doping program [than the safety program] and we've tried really hard to make sure we're incorporating things that make sense,” she said.

–The Authority's status varies across states. Seventeen of 21 racing states have some form of agreement to enforce HISA regulations, whether a formal contract or a letter indicating their willingness to use existing personnel to enforce some or all of the national regulations. Five of the 21 have also entered into financial agreements.

Financial agreements mean that the state is accepting responsibility for collecting and paying the HISA costs allocated to that state. If a state does not have a financial agreement with the Authority, then the responsibility to pay falls to the individual racetracks in that state, who will do collections together with horsemen.

New York is one of the states that does not have enforcement or financial agreements with the Authority. Williams said the state declined to be responsible for collecting and remitting assessment expenses, but it also did not accept responsibility for enforcing HISA regulations.

“It's an interesting paradigm from our perspective, because obviously what's important to us is what's the proper expenditure of state tax revenues,” said Williams. “One of the examinations we needed to do is asking, is it appropriate for state regulatory staff to undertake something as a vendor for the Authority? Especially when we don't have legislature authority to sign off on that. We are heavily unionized as a state, with collective bargaining agreements relative to what our employees can and what they can't do.

“We declined to accept that responsibility, but it's not a permanent decision; It's something that's actively being reconsidered and examined,” he said, noting that the state's decision not to use their employees to enforce HISA regulations is likely a temporary one.

Despite this impasse, Lazarus praised New York for being as cooperative as they could be under the circumstances with help from the New York Racing Association and New York Thoroughbred Horsemen's Association.

–Lazarus said that (like this publication) she gets a number of emails from people upset about HISA rules that don't exist. She recalled one call from an exercise rider who was distraught because he couldn't believe the Authority was going to restrict exercise rider weights to 160 pounds or less, which would force him to quit his job. (The Authority does not have any regulations dealing with jockey or exercise rider weights.) Lazarus asked where he'd gotten the idea there was such a rule, and he said he'd heard that through word of mouth.

A reminder that current and draft regulations can be reviewed here.

–There has been a lot of hand-wringing over the costs for the anti-doping and medication control program, which have not been calculated yet but which are separate from the costs for the safety program. Those in small states have expressed concerns about how much more they'll need to pay, particularly if they have been accustomed to cheap contracts and low testing volumes. Lazarus said the question of whether or not state staff will be permitted to pitch in on HISA enforcement will become important here.

The Authority has appointed The Center for Drug Free Sport to handle the anti-doping program, and that organization will oversee a new welfare unit to execute those rules. States will be able to use their existing drug testing budgets to pay for the anti-doping program. If they also allow existing test barn and investigative staff to collect and process samples for that unit the way they currently do for states, then Lazarus said the state will be given a credit for the expense of that employee. That credit can be applied to the state's anti-doping bill.

–Kimmel expressed concern that as the regulations for horses at the track get more stringent, more trainers may seek to get away from prying eyes at farms and training centers.

“I think there's going to be a tremendous inequity in how that's going to be managed,” he said. “It would take a huge police force to make those rules and regulations the same for both parties.”

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Rich Strike Looks to Complete Derby/Travers Double

SARATOGA SPRINGS, NY – Trainer Eric Reed is looking back and ahead as he prepares GI Kentucky Derby winner Rich Strike (Keen Ice) for the GI Runhappy Travers S.

With a firm opinion of what went wrong in the Rich Strike's sixth-place finish in the GI Belmont S. June 11, Reed is expecting a much better performance in the $1.25-million signature race of the Saratoga Race Course meet Aug. 27. He will be the first Derby winner to run in the Travers since Always Dreaming (Bodemeister) finished ninth in 2017. The last horse to complete the Derby-Travers double was Street Sense (Street Cry) in 2007.

Rich Strike was the sensational and shocking winner of the Derby May 7 at odds of 80-1. Under little-known jockey Sonny Leon, he benefitted from a torrid early pace, made a run from far back and wove around a bunch of horses without checking in the stretch. Approaching the wire, he zipped past the dueling leaders, Epicenter (Not This Time) and Zandon (Upstart), on the inside to complete a storybook performance. His connections decided to skip the GI Preakness S. two weeks later and focused on the Belmont, where he turned up as an also-ran.

Reed shipped his colt from Kentucky to Saratoga Sunday and said he has him ready to start the second half of his season in America's oldest race for 3-year-olds.

“He's going to show up and run his race and if he can beat Epicenter and those horses again, good for us,” Reed said. “I know he can. He's done it once before.”

The journey to Saratoga by van was uneventful and Reed said that Rich Strike seems comfortable in his new surroundings at Dale Romans's barn. Reed and Romans have known each other since they were young trainers sharing the same barn at the old Latonia track, now Turfway Park.

“He shipped really good,” Reed said. “When he got here he was bucking and playing in the shedrow as soon as we unloaded him, so the trip didn't seem to take too much out of him.”

Though it's only been a couple of days, Reed said that Rich Strike looks to be smoothly getting over the main track, which is about 200 yards from his stall.

“He seems happier on the track,” Reed said. “He trained great at Belmont, but it seemed to me watching him that he was really putting a lot into it. Up here, he's training as hard but he's not having to put as much into it. I don't know if that's just the difference in surface or what it is, but really in the 10 weeks off he's matured a lot. He's calmed down He's just seemed like he's more relaxed about doing this and not so swelled up trying to show off so much. He's trained great.”

In the 1 1/2-mile Belmont, Reed asked Leon to keep the colt on the outside and away from traffic in the field of eight. He said he realized by the time the field reached the first turn that it was the wrong strategy. Reed said that even though the colt comes from off the pace, he is at his best when he is surrounded by the competition.

“The race was not the right race anyway, for his style,” Reed said. “I think if I hadn't given Sonny those instructions, he could have been down where he wanted to be and he would have tried a lot harder. We'd never, ever had him out in the middle of the track in any race. He's run in the center of the track in the Derby, but he had horses all around him on both sides. And we just learned that if he doesn't have a horse to the right, he just gets too aggressive with the horse beside him. But if they're on each side, he just wants to fight all of them and he'll run through them. I didn't know that. My God, we had one speed horse, we were the deep closer and six gallopers. I said 'the worst, you're going to be two or three wide when you got to run by them. Don't get in trouble.' It was a bad decision. You could see he had his head cocked the whole way around the turn trying to get to the inside.”

While he understands the error, Reed said he hasn't gotten past the disappointment of how the Belmont played out.

“It still haunts me,” he said. “Not because of me, but because everybody starts saying 'I told you so.' But every race that horse ran all year he ran great. The competition got better every race. The races were tougher, every race, and he kept getting better and better and better. The only bad race, or anomaly, wasn't the Derby, it was the Belmont.

Reed looks at the 1 1/4-mile Travers as a fresh start. He hopes he will get his colt to the GI Breeders' Cup Classic and the division title. The veteran trainer said he was never tempted to give Rich Strike a prep for the Travers.

“No, we were going to give him a mid-summer break,” Reed said. “He needs a little bit more time between races than most horses so there was no way we could hit the [GI] Haskell S. or the [GII] Jim Dandy S. because of the timing. The Haskell was on the wrong track anyway, another track for speed horses, and it's 1 1/8 miles. We knew we wanted to give him a little break. He had come off five races, the Derby, the Belmont and then he's had six breezes. He got 30 days of light training, which to him is still pretty hard training. I think we're right where we always wanted to be.”

Reed will work Rich Strike a half-mile early Friday morning.

“'I'm not going to go fast,” Reed said. “He had a really hard work at Churchill [5f in :59.40 on Aug. 10], so I know we were fit. I'd like :49 or :50 and maybe a 1:02 gallop out.”

Reed acknowledged that the arrival of the Derby winner–the 27th in history to try the Travers–has attracted a lot of interest in Saratoga.

“They've got to come see him,” Reed said. “I guess they're all waiting to see if he's going to back the Derby race up, which I don't blame him. I'm pretty sure he'll run better than in the Belmont.”

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U Glow Girl Another Spa Winner for Girvin

7th-Saratoga, $83,000, Msw, 8-17, 2yo, f, 6f, 1:12.28, ft, 7 1/4 lengths.
U GLOW GIRL (f, 2, Girvin–Mexican Miss {SW, $121,055}, by More Than Ready) was one of two in this auction price-restricted maiden with previous racetrack experience, having faded to be a distant third after setting the pace as the favorite in a similar spot July 20. Bet down to 1.15-1 favoritism to give her freshman sire (by Tale of Ekati) his eighth first-crop winner, U Glow Girl contested the early pace outside of Ruler of the Night (Midnight Lute) and wrested command from that one midway on the turn. Roused right-handed by Flavien Prat nearing the entrance to the stretch, U Glow Girl padded her advantage and reported home a 7 1/4-length winner. Risk Free (American Freedom) finished with interest down the center for second ahead of the once-raced Crypto Mama (Cloud Computing). Mexican Miss, who won the Jersey Lilly S. for Brad Grady after being claimed for $30,000 five months prior, has had a standing date with Girvin since, but did not produce a foal the last two seasons. Sales history: $36,000 Wlg '20 KEENOV; $28,000 RNA Ylg '21 FTKJUL; $50,000 Ylg '21 FTKOCT. Lifetime Record: 2-1-0-1, $55,610. Click for the Equibase.com chart or VIDEO, sponsored by TVG.
O-Steve Landers; B-Brad & Misty Grady (FL); T-Brad H Cox.

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