But the game he was playing in 2013 is nothing like the game being played today. That, he says, is because of the proliferation of the Computer Assisted Wagering (CAW) players. He's found that he can't compete against them, their algorithms, their ability to bet huge amounts at the very last second and their huge rebates.

In a Tweet posted Sunday, Sumja announced that he was walking away. “They (CAW players) have infiltrated every last pool and after 40+ years I am done feeling and being duped by sketchy practices,” he wrote. “Going to concentrate on other sports I am excited about. They ruined horse racing.”

Ironically, the decision came after he made a winning bet on the 20-cent jackpot Pick Six at Del Mar. The winners paid $5.40, $14, $5.20, $56.80, $6.60 and $4.40 and the bet paid $3,216. Sumja is convinced it should have paid more and that the reason it didn't is because the CAW players swooped in and took home most of the pool.

“It's been a culmination of years of just feeling like something is going on that makes me feel that I am not playing on a level field because of the computer players,” he said. “I don't understand technology, so I don't know how they are doing it. But I do know that when you see late odds changes and they are correct way too often in terms of them winning it seems not possible. It gives me a feeling that I am playing in a game that is stacked against me. You know the old adage, when you feel like you are the sucker at the table it's time to get up. I have read what Jerry Brown wrote in the Thoroughbred Daily News and have followed all the numbers Pat Cummings has been coming up with. It's made me realize I have no edge anymore. If I can't beat the computer players why should I play?”

Sumja said he had been wagering about $500,000 a year and worked with two other horseplayers, one betting $2 million a year, the other $1 million. Both partners have also quit wagering on racing. Sumja's wagering dollars are now devoted to sports betting.

“We're all out, but I don't think the tracks care,” he said.

As is the case with many horseplayers, Sumja got tired of watching the horse he wagered on at 4-1 30 seconds before the race break on top and go down to 8-5. Even when those horses won, it left a bad taste in his mouth and he can't understand why the horses whose odds take a late plunge seem to win far more than their fair share. He is not willing to concede that maybe that's because the CAW players' algorithms are so good that they usually come up with the winner.

“I'm not going with the company line that they are just great handicappers. I don't buy it,” he said.

Sumja wants the tracks to close the pools well before the race starts.

“They have to close the pools off significantly ahead of the first horses going into the gate,” he said. “That would take away the feeling that something isn't quite right. You bet on sports and you take a team at +$350, the game ends and you win you get paid +$350. If you take a team getting four points and if they cover the spread you win. What horse racing is doing would be like them telling you with a football bet we'll let you know what the spread is after the game has started. You might have plus three or plus six. We'll let you know during or after the game. Why would you play that? You wouldn't. Shut the pools down three minutes to post. Shut everything down. Let every player see what odds they are really getting.”

Sumja understands why the tracks willingly accept wagers from CAW players. By some estimates they now account for one-third of all the dollars wagered on U.S. racing or about $4 billion annually. The tracks have made a business decision that it's in their best interests to take their bets. Sumja counters, saying that a lot of players are now doing the same, making a business decision that because of the CAW players it is not in their best interests to continue betting on the sport.

“If that's what racetracks want, to cater to CAW players, that's fine,” he said. “But you have a choice not to play nowadays. There are so many other types of wagering available. I've been making my own football line since I was 15. I love betting on sports. And when I make a sports bet that is paying 7-2 I get 7-2 if it wins and not 6-5. It's a refreshing feeling.

“In his article, Jerry Brown wrote about the myth that horse racing won't make it without the money being bet by CAWS. Horse racing made it for 100 years before anyone ever heard of CAW. I understand games change. If racetracks feel this is what they need to do to maintain their business that's what they're going to do. It also comes to a point where you make your own decisions and when you realize you're in a bad spot you've got to stop playing. That's my position. I'm not playing anymore. Neither are my friends.”

Sumja said that after he posted his tweet he heard from dozens of people who said they also have quit betting on racing and that they were happy that he spoke out. The horse racing industry used to get $500,000 a year in handle from Brent Sumja. Now it gets none. How much longer can this keep happening and how many more Brent Sumjas can it afford to lose before real and lasting harm is done to the sport? These are real problems and so far the sport hasn't been able to offer any serious solutions.

The post Fed Up With the CAWs, Brent Sumja is Now an Ex-Horseplayer appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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1-First, the basics. Betting handle is the lifeblood of our industry. It directly funds purses, creates all the jobs in our business, and indirectly funds the commercial bloodstock industry—no (or less) purse money to run for, and eventually yearlings will have the market value of show horses, and stud fees will follow them down.

2–The parimutuel pools are a market; horseplayers compete against each other, not the house. CAW is not just someone using a computer to handicap. Yes, there is a handicapping element, and if someone creates a good handicapping model, good for them. But the important part is this—CAW “players” are being given a massive advantage over regular horseplayers. They get electronic access and a last split-second look at the pools, which gives their computers the ability to assess the situation in a microsecond, and automatically make hundreds of targeted and incremental bets, totaling tens of thousands of dollars per “player,” right at the bell. No human can do that, or compete with it.

3–Because CAW is responsible for so much handle, and because many of the CAW “players” have banded together to negotiate, they receive gigantic rebates. So in effect, they are playing into a much lower takeout than the general public, and that, combined with the advantage they have been given, enables them to basically vacuum the pools. And since it's a market, if they're siphoning off money, someone else is losing it. More on that in a moment.

4–In our industry, we publish handle figures, not profit and loss. But remember: CAW “players” get gigantic rebates. That means the industry gets to keep much less of every dollar they bet—roughly speaking, it takes $3 of CAW handle to equal $1 bet in the backyard at Saratoga. So if overall handle stays the same, but CAW handle is replacing non-CAW handle, for purses, and for everyone else in the industry, it's like handle going down. And CAW is now responsible for about one-third of national handle.

5–The overall retail blended takeout on racing is normally about 20%. But with the CAW “players” making money as a group, it means the horseplayers who make up the other two-thirds of the pools are in effect paying the entire takeout. So for them, the takeout is up to roughly an onerous 30%. Now, horseplayers are not like the people who buy expensive yearlings. They generally work for a living, and as a group have a finite amount they can lose over the course of a year, or lifetime. So as the takeout has gone dramatically up, one of three things has to happen:

A) Horseplayers bet the same amount, and tap out faster. That reduces churn on handle, and handle overall goes down.

B) Horseplayers reduce what they bet as they lose more, to make their money last longer. Handle goes down.

C) Horseplayers stop betting or switch to legal sports betting, which has a takeout of between 5-10% (and no learning curve, since most of us grew up with these games, and there are no odds changes after you bet). Handle goes WAY down.

In other words, CAW isn't just disguising the drop in non-CAW handle, it is CAUSING it.

I know many serious, lifelong horseplayers who now only play on big days, or who have quit the game entirely.

6–So here it is; figures courtesy of Pat Cummings:

As CAW handle has gone from about eight percent of the pools to about a third over the last 20 years, non-CAW handle has nosedived. To give you an idea of how short a time period we're talking about, Smarty Jones won the Derby in 2004.

ADJUSTED FOR INFLATION, ORDINARY (NON-CAW) HANDLE IS ABOUT ONE-THIRD OF WHAT IT WAS JUST 20 YEARS AGO.

Do I have your attention now?

Almost all of that drop came before the advent of legal sports betting. And remember, the non-CAW handle is the oxygen-rich blood that nourishes everything. CAW is not just taking money out of the pockets of ordinary horseplayers; it's killing horsemen and the industry as a whole.

This is an existential crisis, without exaggeration. Since only handle figures are published, the picture has been obscured to the public, but we are not talking about a long horizon–I think major cracks will start becoming visible within the next year or so, because the downward spiral is accelerating rapidly now that there's sports betting. And as ordinary handle goes down, CAW will as well–the robots adjust their bet size to the size of the pools, so that they aren't killing their own prices. These guys aren't in our game for fun, like horseplayers are, they're here to suck money out of the pools. And when they no longer can, they will leave.

7-So, what can be done? Finally, some good news: because the industry makes so little from a dollar of CAW, eliminating a portion of their handle will not have anywhere near the same effect as eliminating the same amount of ordinary handle.

The first thing that has to happen is that the unfair advantage has to be taken away from the CAW players. Their special access to the pools has to be shut off with three minutes to post, like NYRA did with their win pool. But it can't be just cosmetic. It has to happen in all pools.

The second thing is to reduce their rebates. If you make twice as much from each dollar bet, even if CAW handle is cut in half, it's a wash. And if those two actions erode their edge to the point where they bet much less, good; that's the idea. We need to knock that third of the pools figure down by quite a bit, to salvage what's left of the non-CAW handle, and hopefully create more.

I'm using “salvage” advisedly, because we are hemorrhaging customers, and once they are gone, it is hard to get them back. Since I wrote the first draft of this letter one of those cracks has appeared. Golden Gate is closing, in an attempt to triage California racing. We need to stop the bleeding. And we need to do it right now.

Jerry Brown is the president of Thoro-Graph, Inc. 

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According to the civil complaint, Thoro-Graph is suing both NYRA and its NYRA Bets ADW platform over the alleged non-payment of at least $333,000 that Thoro-Graph believes is its rightful cut for incentivizing horseplayers to become NYRA Bets customers via a free, membership-based portal called Thoro-Graph Player Services (TGPS).

Thoro-Graph claimed in its complaint that its portal grew NYRA's betting handle by $100 million over a roughly five-year span, “solely through the joint venture resulting in $3 million in revenue” for NYRA.

When the alignment between the two entities was first announced in 2017, the deal was billed as giving Thoro-Graph an ADW partner, while NYRA Bets got a valuable pipeline of new customers.

Horseplayers would benefit too, a TGPS executive explained at the time of the launch, because they would get access to “concierge-level support,” volume-based wagering rebates, on-track visitation amenities and discounts on Thoro-Graph handicapping products.

But according to the lawsuit, “Defendant NYRA failed to perform its part of the bargain [by allegedly not paying] Plaintiff its full 50% share of its Net Revenue,” wrote Karen Murphy, the attorney for Thoro-Graph, in the Dec. 19, 2022, filing.

“That breach has resulted in hundreds of thousands of dollars in losses to date and has impacted the value of Plaintiff's corporation resulting in additional lost profits to Plaintiff,” the complaint stated.

The filing stated that the dispute involves how net revenues are calculated: “Plaintiff is entitled to its full 50% share of defendant NYRA's revenue that is generated from the handle wagered on NYRA races by non-New York residents and paid to defendant NYRA. In failing to do so, defendant NYRA is in material breach of its core financial obligation to pay Plaintiff its full revenue share under the terms of the joint venture.”

The complaint contended that Thoro-Graph attempted “good faith settlement efforts” to square up the purportedly mounting non-payments, including making a written demand for the money on June 13, 2022, and a meeting with NYRA representatives to discuss the issue.

“[NYRA's] response was to intimidate Plaintiff with the threat of termination of the joint venture and not to address the failure to pay Plaintiff its full 50/50 share,” the complaint stated.

NYRA then followed through with a letter Dec. 12 giving a 180-day notice of termination of the partnership. That action, in turn, led to Thoro-Graph's lawsuit one week later seeking “compensatory damages which are no less than $500,000 [and] estimated additional damages for the remainder of the term of the existing Agreement.”

The court has set a Feb. 10 date for the defendants to file a reply. TDN asked a NYRA spokesperson if the racing association or NYRA Bets wished to comment prior to that filing, and also asked how the termination of TGPS might affect horseplayers who use the portal.

“NYRA will honor the terms of confidentiality agreed to by the parties involved and reply to the court by Feb. 10. This contractual dispute does not and will not impact NYRA customers,” Patrick McKenna, NYRA's vice president for communications, wrote in an email.

The “Termination for Convenience” letter that NYRA served Thoro-Graph is scheduled to become effective June 10.

“That notice of termination has now been issued solely because Plaintiff made it clear it would proceed with legal efforts to protect its rights under the Agreements to receive its full share of compensation,” Thoro-Graph's complaint stated.

“Plaintiff performed its obligations under [the contracted terms] by maintaining its website as 'best in class' and offering free and reduced priced Thoro-Graph data which has resulted in NYRA Bets signing up over 1,700 horseplayers. This was accomplished by Plaintiff without any marketing assistance from the NYRA Parties…” the complaint stated.

“In 2017, Plaintiff grew the handle of defendant NYRA Bets by $3.1 million,” Thoro-Graph's court filing stated. “In 2018 Plaintiff's contribution was $10.7 million; in 2019 the contribution went to $15.3 million; in 2020 the contribution was $22.7; in 2021 the contribution reached $24 million; [At the time the Dec. 19 lawsuit was filed] Plaintiff's contribution [was] on track to reach $25 million making the total added handle over $100 million.”

Drilling the alleged non-payment issue down further, the complaint stated that NYRA's deduction of an “import host fee” from the net revenue calculation is a chief bone of contention.

The complaint put it this way: “To be clear, what defendant NYRA is claiming is an “import host fee” is simply money RECEIVED by NYRA Bets solely as a result of “Qualifying Wagers” by non-New York residents on NYRA CONTENT and then passed on to and RECEIVED BY DEFENDANT NYRA AS REVENUE.”

Attorney Murphy, when reached by the TDN, said, “For now, we will let the complaint speak for itself. We will have more to say after NYRA's response.”

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Flightline was given a 126 Beyer figure. That is the second fastest Beyer number ever, trailing only the 128 that team gave to Ghostzapper (Awesome Again) when he won the GIII Philip H. Iselin H. at Monmouth Park in 2004.

Even though he gave Flightline the fastest number he has ever given to a horse, Jerry Brown, who owns Thoro-Graph, said he chose to err on the side of caution and that had he not the figure would have been much faster.

“When I first looked at it I could have given this horse a much better number,” he said. “There were only two dirt routes on the card and neither had big fields. When substantial proportions of those fields don't fire you're left to make figures off a very small number of horses. That makes it difficult. If I had the other horses he beat running anywhere near what they usually run he would have gotten a negative 11 1/2.

“As a figure-maker, you have to sometimes decide which scenario is most likely. You're already going to give a horse the best number of all time, even if I did it the way I did it. You have to decide which is more likley, that several other horses he ran against did not fire or they did fire and Flightline ran a figure that would be like breaking the sound barrier or a human running a three-minute mile. If you give a horse a minus 11 1/2 you're talking about Bob Beamon stuff. (Beamon shattered the record for the long jump in the 1968 Olympics in Mexico City, breaking the old record by nearly two feet). That was my choice, go with a figure that would have been the sort of thing that happens once in a billion or have several horses that ran behind him, ones who are usually pretty consistent, just not run their race.  I chose to go the way I did and he still wound up getting the best figure of all time.”

Brown said that if Flightline runs another sensationally fast race in the GI Breeders' Cup Classic he may take another look at the Pacific Classic number.

“If he wins the Breeders' Cup and it looks again like the figure should be a minus 11 1/2, I'll give him a minus 11 1/2,” he said. “That would also make me go back and look at the Pacific Classic again. We do review races.”

While Brown has no problem rating Flightline's Pacific Classic as one of the greatest performances ever in racing, he will be picking against the 4-year-old in the Classic. One of the theories behind the Thoro-Graph numbers is that very fast performances take their toll on a horse.

“If you look historically at the horses that have run almost this fast, a couple of them, Midnight Lute (Real Quiet) and Ghostzapper, held it together,” he said. “But if you look at horses who have run very fast, either relative to what they have done before or relative to the breed, where they have run a figure that is incredible compared to the rest of the horses out there, these horses generally don't hold together. That doesn't always necessarily always manifest itself in the same way, but it usually manifests itself in some way. And you're dealing with a horse here who, apparently, has enough issues that he's only made a few starts. So the question is what happens now? People say there is plenty of time between now and the Breeders' Cup. Yes. But there's also plenty of time for things to go wrong. A lot of training will take place between now and then. A race is not the only place where a horse could get hurt.”

Brown bet against Flightline in the future wager bet for the Classic.

“I spread out a fair amount in the future wager,” he said. “He's odds on and I don't think he's 1-2 to make the race. That's not to say that he's an unsound horse or anything like that. It's just that horses generally don't survive running that fast.”

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Whereas it may be a useful tool to focus on which trainers to keep an eye on, we should not jump to conclusions too hastily : there are plenty of other reasons a trainer might frequently improve a horse he has received.

He may have treated the horse for ulcers, any physical discomfort ranging from the cervicals to the sacro iliac, improved his shoeing, or just given him more work or less, trained him differently, better work riders, found the appropriate distance, surface or tactics, used a different bit, etc.

This could be the sign of a trainer simply more attentive to his horse's welfare and therefore a better trainer than the previous one.

One should not forget that one of the main advantages of the claiming system in the U.S. is that it encourages “upward social mobility” (remember Bobby Frankel, among others) in that it gives young trainers the chance to show their ability, specifically because they improve horses they claim. If the successful ones are systematically suspected of doping …..

It is a much better system than the all-handicap one in Europe, where the horses take turns in winning, and where making mistakes is nearly an advantage because you are “well in” as a result, once you figured out what you were doing wrong.

The handicap system preserves bad horses but also moderate (or “clever”) trainers, and is much less honest than the claiming one.

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The program, which was announced at the recent Jockey Club Round Table, is being made available to tracks through The Jockey Club's In Compass database.

When it comes to identifying possible cheaters, speed figures, a way to measure a horse's performance, are a good place to start. Horses have good days and bad days and can improve or decline from race to race. But when horses from a certain trainer repeatedly show dramatic improvement, particularly when making their first start for a new barn, that's a sign that there could be a problem.

Whether they use speed figures or not, handicappers are often the first to know when a trainer is likely using something stronger than hay, oats and water.

“Horseplayers are more aware of what's going on than anybody else and that's because we are actually handicapping these races in much more detail than trainers, owners or racetrack management,” Brown said. “We know who the guys are that you have to be concerned about. This is something that, way back, horseplayers were seeing and getting frantic about it. It used to be that there were just two guys you had to worry about and then over time, it became more and more. We were able to spot them.”

From his own numbers, Brown was able to see when a trainer was having results that he thought defied normal explanation, but he realized that his own suspicions carried only so much weight. That's where McKinsey came in.

“I knew that The Jockey Club was serious about this problem,” Brown said. “We've been trying for a while to find a way to use our data to help solve this problem. This program now is a natural outgrowth of that cause. You'll have a 5-year-old with established form jump up in the figures and the same trainers are getting a number of those. That's a problem. But The Jockey Club wanted to find some way to standardize it so it wasn't just Jerry Brown saying 'Watch this guy.' They brought McKinsey in to develop algorithms for which trainers they should be keeping an eye on. My part of it was to supply the data and to sit down with McKinsey to explain how our data worked.”

To avoid a “garbage in, garbage out” scenario, McKinsey had to know what mattered and what didn't. The program generally doesn't look at 2-year-olds since rapid improvement in such young horses is not out of the ordinary. They also had to understand the relevance of such things as surface changes, in particular that a move to the grass could be the reason why a horse improved.

The idea was to look at horses with established form, come up with a baseline number for their typical performance, and then flag instances where a horse, based on the Thoro-Graph numbers, far exceeded that baseline. Rather than just looking at when a horse made its first start for a new trainer, they looked at every race in the Thoro-Graph database over a four-year period.

The program flags a result whenever a horse runs a Thoro-Graph figure that is two or more points lower than its previous top. With the Thoro-Graph numbers, the lower the figure the faster the race. During the study that ran from 2016 to 2019, 5.5% of all starts met the criteria for being flagged. A full 17% of all trainers had statistically high rates of “exceptional” performances.

“After going through our data and working on the algorithms, they presented me with a list of people who jumped up as being people who needed to be watched,” Brown said. “It was really good. Out of 10 they listed there was only one that I hadn't had any doubts about, but they might have been right about that guy, too.”

Of course, a trainer can't be suspended just because a computer program shows they have a high rate of horses running exceptionally fast races that are hard to explain. The question then becomes how can a track use the data to help clean up the sport? There are no doubt some track managers who, used to looking the other way, won't pay any attention to it all. But there are ways to put the McKinsey numbers to use. For instance, a track may want to increase the rate of out-of-competition tests for a trainer who has been flagged and conduct post-race test on their horses no matter where they finish in a race. Putting surveillance cameras in the barns of trainers who made the list is another option. When, and if, the United States Anti-Doping Agency takes over the policing of the sport, there's no doubt that the agency will put the numbers to good use.

“The Jockey Club hired a detective agency to keep an eye on certain individuals,” Brown said, referring to the investigation that led to the indictments of Jason Servis, Jorge Navarro and others. “I imagine that's one of the things they may want to do again now that they have this data.”

The Thoro-Graph-McKinsey collaboration is not going to solve the sport's problem with illegal drugs, but if used properly it could be a valuable tool.

“Horseplayers are always the first to know what is going on,” Brown said. “Now there's an algorithm out there that mirrors what horseplayers think and know. That can only help.”

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This issue is not related to just scoping a horse looking for bleeding, but in all facets of a horse's medical care, including when it comes to the death of a horse that occurs on the grounds of a racetrack or training center. Racing woefully fails this transparency test, a fact known for years.

I know that there are legal hurdles to making this information easily accessible. Medical records kept by a veterinarian can only be released to another party with the consent of the owner of the animal in question. This type of language is present in basically every Veterinary Practice Act in every single state in the country. I also know that there is an easy fix to the issue as well. All that is needed is to add a simple line or two on every state racehorse owner license application that reads something akin to, “I hereby give consent for the medical records of any horse that I have a full or part ownership in to be released or transferred to a party requesting them.”

It should just be a required part of being able to obtain an owners license. All it takes to make it happen is the desire for change.

I know one of the arguments against providing full transparency of medical records and fatal injury data has always been that the public will not understand it, and the animal rights crowd will try to twist it to fit their narrative on things. Well, that argument is correct on both counts. You know what else is correct though? It is taking the time to make the information easy for the public to understand and fighting back against the misinformation.

The industry can no longer rely on the old refrain of “You just don't understand the industry” when presented with any question or argument against racing. Take the time to explain what we all “don't understand,” especially to followers of the sport who have the greatest chance of becoming fans.

It is something I have come to call the “10-80-10” rule that I have learned from working in the non-profit realm. 10% of people are always going to think racing is wrong, inhumane, and should be forever banned. They are never going to see a different point of view or accept explanations of data that are not fitting their narrative. On the other end of the spectrum there are 10% of people who think nothing needs to change in the racing industry and there really is not a problem at all. They will not agree to changing anything even if the data points to a need for it. Neither extremes are where racing needs to focus (even though both often shout the loudest and we all know what wheel get the grease).

What racing needs to focus on is the 80% in the middle that are asking to be heard but are also willing to sit down and discuss things in a productive way that benefits the sport and its fan base. Providing not only transparency but an explanation about that transparency in a manner that people can understand builds the trust needed to bring new blood into the game.

–Dr. Bryan Langlois, past president of the Pennsylvania Veterinary Medical Association, board of directors of Animal Care PA and Thorofan

If you would like to submit a letter to the editor, please write to info at paulickreport.com and include contact information where you may be reached if editorial staff have any questions.

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I disagree with Victoria Keith's Op-Ed (link) on one point– horseplayers, not owners, fund purses, which ultimately fund everything in our industry, directly or indirectly. But I do agree with a lot of what she wrote. And while I don't believe the body given authority should be strictly made up of owners, they are at least industry stakeholders. If you tried, you couldn't come up with a worse idea than having a governing body that a) is not allowed by law to contain people from the industry; b) is not elected and can't be voted ou; c) but gets to decide how it gets funded.

The technical term for that last part is taxation without representation (see: Tea Party, Boston), and if there is any attempt to raise takeout to pay for this nonsense, I can promise you will see a full-scale rebellion, because I will be the guy out in front of it. But I'm not really worried about that, because I know the commercial breeders who are gung ho for this Frankenstein will be volunteering to fund it out of stud fees and yearling sales.

Owners and those of us who make a living in racing, including HPBA members, understand the relationship between handle and purses, and purses and everything else, and how our industry works as a business. The only people who want to see cheaters get away with it are the ones cheating, while the rest of us are all for good-faith, serious attempts to stop it.

A couple more points. First, the elephant in the room here is obviously Lasix, and the concern of many of us that an unaccountable body could make an uninformed, politically correct decision that could wreak havoc on the tenuous financial well-being of the industry where we make our living. It's already clear to those of us paying attention that a higher-than-usual percentage of horses running without Lasix in graded stakes are not running their races, though without scoping and the results being made public, it's hard to establish cause and effect. But as I have pointed out in these pages before, anything that makes racing less predictable and increases the value of inside information decreases bettor confidence, which hurts us all.

Finally, this: Most of you reading this are blissfully unaware that the industry is dealing with cancer (batch betting), and is about to get run over by a bus (legal sports betting). Batch bettors with electronic access are siphoning huge amounts out of the pools, and have made an already tough game unplayable by effectively raising the takeout for everyone else. And sports betting is giving cynical, disillusioned horseplayers a very viable, easy-to-play, low-takeout alternative, on games they grew up with–there's no learning curve. If the industry doesn't get its act together quickly, those who don't understand the importance of horseplayers to our financial health are about to learn a hard, and probably irreversible, lesson. The last thing we need is to make things worse.

Jerry Brown, Thoro-Graph Founder

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Mr. Chairman and other distinguished members of this Committee, thank you for the opportunity to address you in opposition to the proposed amendments to 810 KAR 8:010 Section 6 partially banning the use of furosemide (commonly called “Lasix”). I am the President of Thoro-Graph Inc., which publishes proprietary data used by high-end horseplayers and horsemen around the country. We currently have about 3,000 active customers who bet several times the national average. I personally bet seven figures annually, and some of our customers wager through a joint pari-mutuel venture we have with the New York Racing Association that will handle $25 million this year.

The first thing I need to make clear is that I am not pro-drug; in fact, just the opposite. No one has been fighting longer or harder than I have to stop the use of performance-enhancing drugs in our industry. That’s why The Jockey Club invited me to assist them when they took on the issue with their Safety and Integrity Committee back in 2008, and in the next few weeks will be announcing a new project using our data to identify potential drug cheaters.

Having said that: being pro-Lasix is not being pro-drug. Legal use of Lasix is an entirely separate issue from illegal use of Performance Enhancing Drugs (PEDs). There is no serious claim that Lasix causes unsoundness or other damage to racehorses, in fact, to the contrary, it helps the ones who need it stay healthy. There is also not, to my knowledge, even any claim of a benefit to the business of racing that would come from banning Lasix, let alone any evidence that would back up that claim.

The idea seems to be that they race without Lasix in Europe, so we should. Well, American dirt racing is much different than the grass racing they have over there. In those races they gallop along early and only run full out the last part of the race. Here, on dirt, they are going close to full blast the whole way–every horse in dirt races is tired and decelerating in the stretch, even the ones that make up ground. Running that way causes far more stress on the horses, and horsemen will tell you that bleeding is caused by stress.

The reason racing works as a business is because of wagering. Bettors pay directly for the purses the horses race for, and thus indirectly for the paychecks of everyone in the industry, including ultimately commercial breeders, who only have a market for their products because buyers have an opportunity to race for those purses. And the reason racing is so heavily regulated is those bettors have to be protected, so that they can have confidence the game they are playing is fair and will continue to provide the revenue stream for our industry.

If Lasix is banned, more horses will bleed during races, and it will cause them not to be able to run to their ability. That’s a fact that nobody even disputes. As a result, there will be no way anyone handicapping races will have any idea when that will happen, or to which horses. And they also won’t know whether a horse that ran poorly last time did so because he bled, unless he did so visibly, so there will be no way to know how that horse will run today. And there are only two possibilities–he will run again untreated for bleeding, which is bad not only for the horse but for the betting public, or he will be treated with something else, legal or illegal. But unlike with Lasix, which is listed in the program, the public won’t know the horse’s status, or how to evaluate him, in either case.

Do you know who will? There are people who pay for information like that, and bet accordingly. They will effectively be insider trading–which is exactly the kind of thing regulation of racing is meant to avoid, and instead we will be creating a market for it. Get ready for horses coming off a terrible performance and listed at 20-1 getting bet down to 2-1, and winning by 10 lengths. And get ready for the backlash when honest bettors get upset about it, and take their money elsewhere, to games where they think they get a fair shake.

When Lasix was first used to treat bleeders, those were the kind of jump-ups and betting coups we saw, and it’s the reason Lasix quickly became the only drug listed in the program. For bettors, that’s the Good Housekeeping Seal Of Approval–it tells them the horse will get every chance to run up to its natural level of ability that day. And that is why I have never heard a horseplayer say they will bet more if Lasix is banned–and many, like me, will bet less. As in business, uncertainty hinders investment–and in this case, that investment is wagering.

A point about “optics”: Some people apparently think that banning Lasix will make our game look better to the public, and to PETA. Those people have never seen a horse bleed badly, like Demons Begone did on national TV in the 1987 Derby, when he came back to be unsaddled with blood all over him. If you saw it, you won’t forget it. And in today’s environment, all it takes is that happening once, at any track, on any day, if someone with a cell phone is nearby to take a picture. The photo would quickly be on the PETA calendar. And what happens if the horse in front in the Derby bleeds, chokes and stops, with 19 horses right behind him, on national TV? PETA won’t be calling for the return of Lasix. They will be calling for a ban of racing.

Finally, I would like to say that the Lasix issue is being presented as a false choice–either everyone gets to race on it, or it gets banned. The goal should be to let the horses who need medicine have it, and to not have the others race on it. This can be done by having the state vets examine horses to certify they really are bleeders and therefore eligible for Lasix, which was the original rule, and by taking away the incentive to use Lasix if you don’t need it, by having those that do use it carry a weight penalty. If this issue is dealt with sensibly, within a couple of years you can have the vast majority of horses racing without Lasix.

Jerry Brown

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