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Stories to Watch in 2021

It’s time to turn the page from what was a horrendous year. Thank goodness. The year 2021 is upon us and, for horse racing, it figures to be an important and eventful 12 months. These are the stories we will be talking about and writing about in 2021:

Will Handle Be On The Rise?

Perhaps the most positive story to come out of 2020 has been the handle figures. With the pandemic causing a sizeable reduction when it comes to the amount of races that were run, betting figured to have declined steeply this year. Instead, entering December, it was off just 1.48% for the year. The number of total races run was down by 24.52%.

This could mean that handle will show a significant bump in 2021. The theory is that racing picked up some new customers during the months where it was the only sporting event going and that is why the handle numbers for 2020 didn’t fall off a cliff. With what should be a fairly normal racing schedule in 2021 and with racing perhaps having grown its customer base, this could be a year where the sport takes a needed step forward.

Then again, the 2020 figures could be nothing more than a matter of the pie being sliced differently. Was this simply a case of the same people betting virtually the same amount of money, but having fewer overall races to wager on?

It’s anyone’s guess, but there should be a concrete answer to that question in 2021.

What Will Be The Impact Of The New Lasix Rules?

Starting Jan. 1, Lasix will not be permitted in most stakes races at several of the sport’s top tracks. The ban will include all three Triple Crown races and most of the prep races for the GI Kentucky Derby. This comes after the same tracks banned Lasix in 2-year-old races this year.

The 2-year-old ban didn’t have much of an impact as trainers adjusted and learned to do without the anti-bleeding medication. There didn’t seem to be any major incidents. Most likely, the story will be much the same when it comes to the 2021 stakes races as the sport discovers it can get by just fine without Lasix.

What’s Next When It Comes To The Doping Indictments?

Since the bombshell story broke in March that Jorge Navarro, Jason Servis and 25 others had been indicted for their alleged involvement in the doping of horses, there haven’t been many additional developments. That should change in 2021.

By year’s end, it’s likely that the case will reach a conclusion, with the possibility that both trainers enter into a plea deal. If that happens, both could be sentenced some time in 2021.

We should also know whether or not there will be additional indictments. It appears that some of the individuals who were indicted could be talking, perhaps naming more names. We’ll find out in 2021.

What Will We Learn About The Horseracing Integrity And Safety Act?

Signed into law by President Trump Sunday, the Horseracing Safety and Integrity Act must go into effect by July 1, 2022. But it will still be an important story to follow in the year ahead. This should be the year where many questions begin to get answered, among them how much will it cost and how will it be paid for? Horseplayers are dreading the thought of having to pay for this through a higher takeout and owners don’t want to have to pay some sort of fee every time they start a horse, Both, unfortunately, are possibilities.

This will also be the year when the members of the Horseracing Integrity and Safety Authority Board will be named.

Will Arlington Park Survive?

Churchill Downs, the owners of Arlington Park, has only committed to one more year of racing, which means 2021 could be it for one of the sport’s most beautiful tracks. There should be a place in the sport for a showcase track in a huge metropolitan area, but it doesn’t appear that there are many options on the horizon that would save Arlington. Let’s hope that there will be a reprieve for Arlington.

How Good Is Charlatan?

It’s not too early to jump on the Charlatan (Speightstown) bandwagon. Limited to just three races before being sidelined by an ankle injury, he looked like a horse with unlimited potential after crossing the wire first in the GI Arkansas Derby, a race he eventually lost due to a medication violation. He looks even better after his blowout win over a stellar field in the GI Runhappy Malibu S. Saturday at Santa Anita. The early favorite for 2021 Horse of the Year, Charlatan could have the kind of year that Ghostzapper had in 2004. Don’t expect a busy campaign, but he could dominate every time he shows up while posting ridiculously fast numbers.

What Will Be The Effect Of New Jersey’s Whip Ban?

Whip reform has been a slow process, but it will take a huge leap forward in 2021 when the whip will be banned in New Jersey racing. The only exception will be situations where it is needed for safety reasons. All eyes will be on Monmouth Park when it opens in the spring with an experiment that could change the debate when it comes to the future of the whip in racing. What happens in New Jersey could influence what direction California will take.

When Will Fans Be Allowed Back In The Stands?

Fans weren’t allowed to attend the Triple Crown races in 2020 or the Breeders’ Cup. The stands were empty at Saratoga and at Del Mar. That won’t change Jan. 1, but it appears likely that, with the rollout of the coronavirus vaccine, there will be a return to normalcy in 2021. That may not happen in time for the Kentucky Derby, but could it happen for, say, opening day of Saratoga? Nothing would be more welcome.

Can Godolphin Win Its First Kentucky Derby?

There aren’t many important races left in the world that Sheikh Mohammed has not won, but a victory in the Kentucky Derby has eluded one of the sport’s most powerful stables. Godolphin has sent out 10 starters in the Derby without a winner. Its best showing was a fourth-place finish by Frosted (Tapit) in 2015.

That very well could change in 2021. Essential Quality (Tapit), the GI TVG Breeders’ Cup Juvenile winner who will soon be named 2019’s Champion 2-Year-Old Male, is a horse without any apparent flaws. He has the ability, the right breeding and the right trainer in Brad Cox. He will have to deal with whatever Bob Baffert brings to Churchill Downs, but Essential Quality very well could be the one to get Godolphin into the Derby winner’s circle.

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HISA Signed into Law

The Horseracing Integrity and Safety Act officially became law when President Donald J. Trump signed the COVID-19 relief and government funding legislation Sunday night. The legislation will establish national standards to promote fairness and increase safety in Thoroughbred racing nationwide. The HISA legislation will go into effect no later than July 1, 2022, but could be effective earlier following the formation of an independent national racing authority and approval of an anti-doping and medication control program and racetrack safety program by the Federal Trade Commission. The FTC will review the programs developed by the authority, allow for public comment, and once approved by the FTC, the programs will go into effect.

In response to the bill’s passage, Travis Tygart, CEO of the United States Anti-Doping Agency, released the following statement, “The Horseracing Integrity and Safety Act passed the US Congress last week and was signed by the President Sunday night. This passage signifies the beginning of a new era in the storied history of the horse racing industry. The landmark legislation will establish a uniform approach to better protect horses and jockeys, and to bolster the strength and fairness of the sport.

“USADA is honored and grateful to be tasked with the anti-doping duties outlined in the Act. We are excited to spend the near future contributing to the design of a robust set of rules and customizing our gold-standard athlete service and testing model to ensure clean competition for equine athletes.

“Thank you to Majority Leader Mitch McConnell (R-KY) for his leadership in getting this bill through Congress, and to Congressmen Paul Tonko (D-NY) and Andy Barr (R-KY), and Senators Kirsten Gillibrand (D-NY) and Martha McSally (R-AZ) the original cosponsors of the Horseracing Integrity Act.

“USADA welcomes the opportunity to partner with horse racing stakeholders to develop uniform rules and to implement robust independent testing and enforcement that will contribute to the longevity and legacy of the sport of horseracing.”

The government spending legislation also provides an extension of the three-year tax depreciation for all racehorses through 2021, allowing taxpayers the option to depreciate, on a three-year schedule, racehorses less than 24 months of age when purchased and placed into service.

The massive $900-billion COVID-19 relief package also means eligible racetracks and farms will be allowed to participate in a second round of the Paycheck Protection Program (PPP). It also includes provisions for an increased number and extension of H-2B visas.

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Horseracing Integrity And Safety Act Signed Into Law

The Horseracing Integrity and Safety Act is now law.

The legislation passed by the Senate on Dec. 21 that will put anti-doping/medication control and safety programs under the umbrella of one independent, non-governmental Authority, the Horseracing Integrity and Safety Act was part of a 5,500-plus page, $2.3 trillion bipartisan government funding bill that included $900 billion in coronavirus relief extending unemployment benefits and providing up to $600 in cash payments to individuals. President Donald Trump, whose Treasury Department officials helped negotiate the package, had threatened to veto the bill, in part demanding that the $600 individual benefits be increased to $2,000.

On Sunday night, Trump signed the bill into law.

A previously formed nominating committee can now move forward in naming the nine members who will comprise the Horseracing Integrity and Safety Authority (five independent members from outside of the horse industry, four from within the industry but without current investments or conflicts of interest). The Authority has been charged with contracting with the United States Anti-Doping Agency to oversee the anti-doping/medication control program on a national basis.

Two working committees also will be named. For more information on what comes next, read answers to frequently asked questions, as supplied by Marc Summers, vice president and general counsel for The Jockey Club, which helped steer the legislation through Congress.

Passage of the legislation, originally supported by the grassroots Water Hay Oats Alliance and sponsored in the House of Representatives by Democrat Paul Tonko of New York and Repubolcian Andy Barr of Kentucky, was years in the making. It got fast-tracked earlier this year when Republican Senate Majority Leader Mitch McConnell threw his support behind it after Churchill Downs came on board and joined with other major racing organizations. It passed the House in September on a voice vote and was part of the omnibus bill passed overwhelmingly by the Senate Dec. 21.

The omnibus legislation that is now law includes other measures beneficial to the horse industry, including continuation of H-2B visa programs for foreign workers and extension of three-year tax depreciation for purchase of racehorses and COVID relief for small businesses in the horse business.

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The Week in Review: Could Breakage be Used to Pay for Horseracing Integrity and Safety Act?

As the Horseracing Integrity and Safety Act resurfaced last week as part of an omnibus spending bill passed by the House and Senate, the same questions were being asked all over again. What will the new way of doing things cost and who is going to pay for it?

All anyone really knows at this point is that the states will be expected to foot the bill and their share will depend on how much racing there is in each state. Kentucky, with year-round racing, will have to pay more than Arkansas, where Oaklawn is the only track and it is open for only about four months. A state like Pennsylvania, where there are three Thoroughbred tracks, two of which run year-round, and three harness tracks, will get hit the hardest.

It appears that each state will be left to its own devices when it comes to figuring out how to come up with an amount that will likely be in the millions for the major racing states. If that turns out to be the case, it raises the possibility that the money will come from an increase in takeout, which is the very last thing this sport needs.

While not offering any specifics, the bill suggests that the money could come from foal registration fees, sales contributions, starter fees and track fees. But taking money out of the pocket of owners, in the form of purse cuts or fees to start a horse, is another bad idea. Owners and bettors are the two most important participants in the sport and neither group can afford to have any more money come out of their pockets

Which is why the sport needs to come together and find clever and alternative ways to raise the money. Here’s my idea: use the money that accrues each year from breakage.

In most states, payoffs are rounded down to the nearest 20-cent increment on a $2 bet. That means if the exact payoff on a horse to show should be $2.79, the actual payoff will be just $2.60. While a few pennies here or there may not seem like a lot, breakage can add up fast. The Thoroughbred Idea Foundation estimates that breakage adds up to about $50 million a year. During the 2018 Triple Crown alone, breakage on win bets on Justify (Scat Daddy) totaled more than $1 million for the three races.

In a perfect world, all bets would be broken down to the penny and the horse that should pay $4.18 would pay $4.18 and not $4. Horseplayers may deserve that money, but it’s highly unlikely that they will ever see it. That’s what makes this different from a hike in the takeout rate. Diverting breakage to pay for the Horseracing Integrity and Safety Act will not mean that the gamblers will be asked to pay any more than they are now.

Of course, that estimated $50 million has to come from somewhere. The money from breakage is used to fund such things as purses and breed development funds. In some states, the tracks are allowed to keep some or all of the money. The breakage money is retained by the bet-taker, which means more and more of that $50 million is now going to the ADW companies, which can afford to take a small hit. The money would be missed, but it is currently spread among so many entities that the hit will be minimal. And it can also be argued that this is money the tracks, breeding funds and purse accounts shouldn’t be getting in the first place.

Another source of revenue could be uncashed tickets. According to the 2019 Maryland Racing Commission annual report, there were $981,618 in uncashed tickets in the state in 2019. Multiply that by the 30 or so states that have pari-mutuel wagering and you will likely come up with $10 million or so.

The breakage plus uncashed tickets, is that enough? Until The Jockey Club, the Horseracing Integrity and Safety Authority or, perhaps, the United States Anti-Doping Agency or whomever, release a budget or an estimated budget, it’s impossible to tell. But even if the breakage money pays for just a fraction of the program, it is a good place to start.

The passage of the Horseracing Integrity and Safety Act, which appears to be inevitable despite President’s Trump’s reluctance to sign the omnibus spending bill that includes the Act, promises to be a tremendously positive, much-needed development for the sport. It will come at a cost, but that shouldn’t be too much of a cost. This is not something that horseplayers should have to pay for. The same goes for the owners. Whether it’s with the breakage money or something else, when it comes to paying for the Horseracing Integrity and Safety Act, the sport needs to get this one right.

Charlatan Sensational In His Return

Bob Baffert said that he thought Charlatan (Speightstown) was going to need the race in the GI Runhappy Malibu S. Saturday at Santa Anita. He could not have been more wrong.

Before being sidelined in June due to a filling in his ankle, Charlatan looked like he might be the most promising horse in racing. He demolished the competition in all three of his races, including the GI Arkansans Derby, where a medication violation cost him the official win.

What appeared to be a match race on paper, didn’t really develop because the highly regarded Nashville (Speightstown) didn’t run to expectations. But, nonetheless, the Malibu was loaded with talent and Charlatan thrashed his opponents, winning by 4 1/2 lengths. He got a 107 Beyer figure.

On Sunday, Baffert said he wasn’t sure what was next for Charlatan. It will be interesting to see if his team shoots for the big money in races like the G1 Dubai World Cup or the Saudi Cup or gets more conservative and keeps him home. But wherever he goes, he will be the headliner. Until proven otherwise, he’s the most exciting horse in the sport.

The other story out of Santa Anita Saturday was the handle. The $23,003,159 wagered was a record for an opening day at “The Great Race Place.” It sure looks like the bettors are not turning away from Southern California racing over the new, strict whipping rules.

Los Alamitos Deserved Better

The California Horse Racing Board (CHRB) should be demanding that every track in the state do its very best when it comes to safety. But the CHRB was being unreasonable when it voted to only give Los Alamitos a six-month license to run in 2021. They did so because there had been a reported 29 fatalities at the track during 2020. The commissioners said they would let Los Alamitos run during the second half of the year if they were convinced that the track had been making positive steps when it came to safety.

It’s one thing to give Los Alamitos such an ultimatum. It’s another thing to do so two weeks before the beginning of the year. That’s especially a problem for a Quarter Horse track because most of the money for major races in the sport comes from sustaining payments. Track owner Dr. Ed Allred correctly noted that it was hard to ask Quarter Horse trainers and owners to keep making the payments when they would have no idea if any of the races scheduled later than June 30 would actually be run.

When California was desperate for a track to step up and fill the void after Hollywood Park closed down, Allred went above and beyond, converting his track so that it could hold Thoroughbred racing. Since then, it seems like he never gets a break from the CHRB. The guess is that Allred will back down, but his threat to shut the track down rather than agree to the six-month license is something that can’t be taken lightly. Because of its racing dates and the fact it provides stabling for hundreds of Thoroughbreds, Los Alamitos has became a part of California racing that would be greatly missed of it were ever to go away.

The right thing to do would have been to grant Los Alamitos a one-year license while letting the track know that this would be its last chance and that there would be a stiff price to pay going forward if it didn’t improve on its safety record.

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