Phillips: Let Kentucky’s HHR Fight Be A Warning To Others; Forge Contacts With Legislators Now

Racing interests across the country should pay close attention to what almost happened in Kentucky. A state supreme court ruling in September on historical horse racing (HHR) nearly shut down the entire Kentucky racing industry. The ruling said a legislative fix was needed. Racing interests had to scramble — it was a legislative scramble could happen to any racing jurisdiction.

Such a panic in other places would not on the scale as it was in Kentucky, where 60,000 direct and indirect jobs, $5.2 billion in economic impact, and $15 million in fiscal year 2020 for the Kentucky Thoroughbred Development Fund purses were at stake.

To avoid a legislative scramble, building relationship with legislators and policy makers should be in the DNA of everyone associated with racing. It is hard to believe in a place with iconic tracks like Churchill and Keeneland plus the home base of major racing organizations that relationship-building was not an ongoing activity.

Being unprepared is not an option. In today's environment where everything is controversial, it is vital that an infrastructure is in place to influence the outcome of legislative, regulatory or policy issues.

Preparation is the key to success. The absolute first step is to make certain everyone involved from the front office of a racetrack to the backstretch knows who their own legislators are.

A few quick ideas to build legislative relations I have used over the years: introductory meetings, staying in touch, working in political campaigns, attending fundraisers, town hall meetings and other events honoring the legislator. Seek out their opinion, look for ways to mention/publicize the legislator, invite them to meetings and events, give them awards, send out photos to local and social media.

The final important point: do not wait until you need something to get in touch.

Bill Phillips operates Phillips Strategy a consulting firm and he is a former West Virginia Racing Commissioner, Chief of Staff to WV Governor & Members of Congress. Phillips also served as an executive to professional associations, managing their legislative relations.

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The Friday Show Presented By Rowayton, Standing At Diamond B Farm In Pennsylvania: The Prep Season

Eight races offering Kentucky Derby qualifying points have been run this year with two more scheduled this weekend, including Saturday's Risen Star Stakes at Fair Grounds in New Orleans – the first in the Kentucky Derby Championship Series with 85-points each (50-20-10-5 to the first four finishers).

What have we learned so far? What horses have had their stock rise and which ones have fallen? And how many potential Triple Crown race winners have we yet to see racing in 2021?

In this week's edition of the Friday Show presented by Rowayton, standing at Diamond B Farm in Pennsylvania, Paulick Report publisher Ray Paulick, bloodstock editor Joe Nevills and news editor Chelsea Hackbarth tackle those questions and more. They've also got a surprising pick for the “star of the week.”

Watch the Friday Show below.

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The Kill Pen Economy: Why Is The Slaughter Pipeline So Hard To Shut Off?

Those who pay attention to such things may have noticed a familiar bay mare with a distinctive star whose picture appeared on social media in December with a post imploring readers to rescue her from a grim fate. The mare was identified as Apt To Smile, a Louisiana-bred daughter of Parading who had completed an undistinguished racing career in May 2017, and she was offered for sale by a well-known kill pen in Bastrop, La. The terms for her rescue were the same as they are for many other horses that pass through the lot and others like it each week: Pay us our price, or she's making a long, painful trip to a Mexican slaughterhouse.

This wasn't her first time being offered for sale with a metaphorical gun to her head.

In March 2018 she showed up in the hands of Jacob Thompson, then the operator of Thompson Horse Lot in Pitkin, La. The mare was part of a group of horses bailed by Dina Alborano of ICareIHelp around Easter of that year. Alborano called upon her vast social media army and later said she raised Thompson's ransom of $875 per horse plus another $350 in assessed travel and quarantine and transport charges for Apt To Smile and ten others – a total of $13,475 that materialized within hours from sympathetic onlookers around the country. The group of horses was transported to Alborano's associate Hal Parker for “quarantine” for 30 days before being offered for adoption.

Apt To Smile, according to Alborano, left Parker's care fairly quickly, with her adoption announced on social media in May 2018. (Other horses of course, were not lucky enough to ever leave.) Where she's been from mid-2018 to December 2020 is unrecorded, but it's not uncommon for the same horse to spend time rattling around on the circuit of auctions, horse traders, and kill buyers, changing hands frequently.

In December 2020, Apt To Smile was advertised with a ransom price of $1,050. Pen representatives confirmed to the Paulick Report that the mare was purchased privately before her advertised ship date to Mexico, but declined to identify the buyer.

Assuming the Bastrop lot and the Thompson lot were indeed paid the stated prices for her, that means $1,925 has been paid to two kill pen owners in an attempt to secure one horse's future. Another $350 raised for her feed and board was given either to a man who later pleaded guilty to charges of animal cruelty or vanished after it went to a woman who was eventually the target of an investigation by the New Jersey Office of the Attorney General for mishandling funds given to an unregistered charity. The mare, who is now seven years old, has spent three of those years shuffling from one situation to another, sought out more than once by people who knew she was worth money – but only if she were in danger.

And, she's not alone. A rescue watchdog recently provided this publication with a list of 198 off-track Thoroughbreds said to have passed through the Thompson Horse Lot and advertised for bail or purchase on the lot's social media between 2018 and 2020. Since the relocation of the Thompson operations to Texas, the lot located in Bastrop has reportedly begun advertising more OTTBs. The list also included 20 OTTBs advertised through the Bastrop pen since Oct. 16, 2020.

It must have seemed to some like the end of an unfortunate era when the Louisiana Department of Agriculture sanctioned operators of a well-known social media bail pen in late January, followed by an announcement by the operators of Thompson Horse Lot that it had moved to Texas. The reality is, this segment of the equine economy probably isn't going anywhere anytime soon.

How the slaughter pipeline has become big business

While the flow of horses from racetracks to kill pens was once a happenstance of owners, trainers, and breeders using the pipeline as a way to get an unwanted horse out of the barn, it's now subject to its own economic drivers. The Thompson and Bastrop lots are not the only ones that have caught on to an alternate cash flow source in the form of bail horses. Pen operators sometimes require a single purchaser for each horse and other times will allow the horse to be “bailed” with a price on the horse's head that can be crowdsourced, and then they release the horse to whoever will take it.

People purchase the horses, well above meat price, sight unseen, and are encouraged to use the pen's preferred contractors to vet the horse, attend to the horse's feet, transport the horse to them, and to put the horse in quarantine care – recommended by most animal health experts, since horses at livestock auctions are often mixed and herded together in groups and could be exposed to transmissible disease.

Of course, those paying into the system are taking a lot on faith – they're trusting that the pen is being honest about how much money has or hasn't been raised for a bailed horse; they're trusting that the horse they receive will be the one they saw in videos; they're trusting that even if the horse they saw advertised online is the one that arrives in a trailer, that the horse will be in the same physical condition it was when they sent money for it; and they're trusting pen operators who say these horses were bought for the purpose of slaughter and not as high price, high risk resale projects.

Many people and legitimate non-profits raise bail or buy horses from kill lots through gritted teeth, saying they hate the system but feel for the individual animals trapped in it on this particular week. The trouble is, the recurring willingness to raise funds any way possible has given bail lots financial incentive to buy at auction or seek horses privately not based on which horses will most efficiently fill their trucks to fill a contract with a slaughterhouse, but which can be sold at a higher profit margin to a sympathetic public.

In recent years, Thoroughbreds have begun commanding higher bail prices, no doubt because an ex-racehorse in a kill pen seems to generate a particular type of disgust from social media followers, leading to more likes, shares, and ultimately, more money. In fact, bail pen operators have begun specifically seeking them out for this reason.

This post appeared in April 2019 on the social media page of La Petrona Equine Kill Pen & Auction Horses, a group which was run by the operators of the Thompson Horse Lot

Unfortunately, there is limited information available on the hammer prices for horses at small, local livestock auctions, and often identifications on horses either at auction or at bail can be lacking, so it's nearly impossible to know – did this pen indeed buy this horse with the option of selling it for meat (paying below average meat price of $400 to $600), or did the pen buy the horse at a high enough price that it can only make money if it sells for a $1,000 to $2,000 ransom? If it's the latter, are purchasers rescuing a horse or creating an economic demand?

Where is the racing industry in all this?

For nearly everyone watching the flow of Thoroughbreds into this system, the question is what the Louisiana racing industry is doing about it.

There are two authorities that would seem reasonably able to address the issues: racetrack ownership and the state racing commission. Both have legal snags making it difficult for them to take drastic action to punish people for sending Thoroughbreds into the slaughter pipeline.

The state racing commission has jurisdiction over people who hold racing licenses and is tasked with making and enforcing state regulation regarding horse racing. Someone who's not licensed (i.e., breeders) cannot have action taken against their license.

The commission, after considerable input from attorneys, is hard-pressed to make a state racing regulation against sending a horse to slaughter when there's no federal law against doing so. Slaughtering a horse commercially for meat, or selling/transporting a horse to be slaughtered are not illegal activities in this country. The reason commercial horse slaughter is not a reality in the United States these days is that funding for federal inspection of equine slaughterhouses was written out of the Agriculture Appropriations bill in 2005. That funding language has been carried forward ever since. Animal rights advocacy groups have made moves to formally ban the practice and to prevent the transport of horses for the purposes of slaughter, but have not yet been successful.

As long as the activity itself isn't illegal, the commission hesitates to write a regulation against it. If it did write a regulation against it, the commission would have to enforce that regulation. To enforce it, they'd have to show definitively that someone knowingly sent a horse to the slaughter pipeline. Because horses often pass through livestock auctions and/or horse traders, sometimes in a matter of hours or days, on their way to a bail pen, licensees can frequently claim quite reasonably they didn't know where the horse was going to end up. The commission would be tasked with proving what was or wasn't in someone's mind, which is not an easy thing to do legally.

The ghost of civil cases past

Louisiana in particular has another legal challenge. In other states, courts have ruled that racetracks have certain rights as private actors to exclude people from their grounds. In Louisiana though, an incident in 1980 set a somewhat more complicated legal precedent.

Herbert Roberts, who was a trainer for a Texas racing operation, was one of several horsemen who became critical of track management at Louisiana Downs in Bossier Parish, La., where he often saddled horses for Paradise Farms. Roberts and the others were disturbed that the track was permitting horses to run with a certain type of shoe, and after he had signed a petition about the issue, he was informed he would not be permitted to stable horses or to race there in the 1981 season. The track later recanted, but not before Paradise had laid Roberts off because he couldn't saddle horses for them. Roberts asked the racing commission for assistance but was told the responsibility lay with the track.

Roberts sued for damages and injunctive relief, claiming his rights to free speech had been violated by a system that paired the state and the racetrack in a symbiotic way. The track claimed it was a private entity and could make decisions however it chose regarding stabling in particular. A district court sided with the racetrack, but Roberts appealed.

The U.S. Court of Appeals for the Fifth Circuit found that, in fact, the question of access to stalls and to the entry box was a matter over which the tracks and the commissions both had input, since the racing secretary and the stewards at various times behave as private actors and as state regulatory enforcers. The appeals court reversed the lower court's ruling.

“We do not today hold that the state and Louisiana Downs are in such a relationship that all acts of the track constitute state action, nor that all acts of the racing secretary constitute state action,” the opinion read. “We do not hold that the actions of any individual in a position which a regulated business is required by law to maintain constitute state action. We hold only that in the complex of facts and regulations present at this stage of the proof in this case, there is a sufficient nexus between the conduct complained of and the state to attribute the conduct to the state.”

The lack of clarity from this case seems to have resulted in a standard response from Louisiana racetracks: with sufficient language they can (and do) include an anti-slaughter clause in their stall applications and can revoke a trainer's stalls if they find it has been violated. They believe however, that they cannot ban a trainer or owner from the entry box if the person's license is clear and that it's up to the commission to take action.

What's being done — and what isn't

“The sale of racehorses to slaughter is a distasteful and inhumane act, and we are vehemently opposed to this practice,” said David Strow, vice president of corporate communications for Boyd Gaming Corporation, which owns Louisiana racetracks Delta Downs and Evangeline Downs. “If we find that an owner or trainer has knowingly sold a horse to slaughter, we will punish them to the greatest extent permitted under state law: the permanent revocation of stall privileges at our track.

“Through our partnership with the National Thoroughbred Welfare Organization (NTWO), we are also providing significant financial support toward putting an end to this practice. Thanks in part to our support, the NTWO has been able to rescue hundreds of retired horses to date. We are proud of our partnership with the NTWO, and will continue doing what we can to help every retired racehorse find the loving home it deserves.”

For a while, NTWO president Victoria Keith said the organization was flooded by calls from trainers. Now, for some reason, the phone hasn't been ringing as much, despite the economic uncertainty of the global pandemic.

“We'd gotten up to 90 plus horses at one time and we just started having to say no to taking horses until we got some cleared out,” said Keith. “Right as we got back to a manageable number, here comes COVID-19.

“Bottom line is we were just taking a horse here or there. The wave that people were expecting didn't really happen.”

As of late January, the organization had 13 off-track Thoroughbreds in its system between facilities in Kentucky and Louisiana.

Boyd Gaming did not inquire further about the list of 200 horses alleged to have passed through Louisiana bail pens since 2018 (or the connections of those horses) but urged this reporter to send that information to the commission for further action. Of course, some of the horses on that list had been off the track for years, pulled off a breeding farm or out of a riding stable or backyard before they showed up in the lot.

It's not always clear how direct the line is from racing industry to bail pen. One thing continues to be true: whatever route they took to get there, there will be pen owners ready to sell them — however many times they pass through the gates.

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‘It’s Not Just The Big Guys’: Historical Horse Racing Supports Small Kentucky Tracks, Horsemen

As both the Kentucky State Senate and Kentucky House Committee for Licensing, Occupations and Administration Regulations passed SB 120 this week, Turfway Park horsemen are making their case for the importance of protecting Historical Horse Racing. They say protecting HHR, as it is known, is critical to saving Kentucky jobs, including their own.

HHR's future in Kentucky is uncertain following an opinion issued by the Kentucky Supreme Court in September. At risk is a significant revenue stream that has produced some of the best racing purses in the country, prompted track owners to make considerable facility investments and bolstered a year-round racing circuit on which Kentucky horsemen have come to depend.

Trainer Buff Bradley, a Kentucky native, left the state 11 years ago to winter in Florida and then New Orleans because purses had gotten so bad at Turfway Park. After purses increased last year, he convinced owners to stick around Kentucky.

“I was hoping Kentucky was going to be a stronger circuit, with Ellis doing well,” said Bradley. “It really looked like Turfway was going to be on the rise with Churchill buying it and purses increasing. Now I'm rethinking, 'Uh oh. I came here and it might have been too soon,' because things aren't looking as well with Historic Horse Racing machines maybe not going through. That's going to be the big question.

“Kentucky can be a great circuit,” he said. “I know last year everybody was thrilled. You've got owners who see a rising Kentucky, even with Ellis Park and Turfway's purses being better, they can afford to stay around here. And they live here. If they can do that, they're going to go to the sales and buy more horses. If we can keep more horses around here, we can keep everybody busy – more jobs. There's a lot to it.”

Bradley employees 12 people in his 20-horse stable at Turfway.

“The money has made a big difference,” he said. “It's not like we're getting rich off this, but it makes it affordable for people to stay and to meet people to buy horses. It's become a year-round circuit in Kentucky, which is a big plus. Because you keep the people here. This is our home.

“If we don't have HHR, I can see racing really decreasing here in the state. Horse racing will go down to Keeneland and Churchill basically. I can't see how Turfway, Ellis Park – those two tracks for sure – and even Kentucky Downs could survive. We'd probably decrease the number of days even at Keeneland and Churchill. And when that happens, it's tough to get stables to come in because there isn't going to be much racing. They're going to go to New York and Florida, areas where they have racing throughout the year.”

Groom Toni Ouzts, who has two children with her husband, veteran jockey Perry Ouzts, is concerned that if the Kentucky House does not pass the HHR bill, life will be more difficult for them.

“I need this job,” she said. “It's my livelihood. It's my passion. I'd be lost without it. And my husband would be out of work, too, if we would not have Turfway Park.”

Asked about people who would say that HHR just makes rich people richer, she said: “No. This is keeping me in a job. It's keeping my husband in a job, people I work with every day. We work seven days a week. This is more than a job. It's everything. My sister and I work here 'rubbing' horses together. And even her husband works on the front side. It's giving everyone a job.”

When discussing the potential of Turfway likely shutting down unless the HRR bill passes, she said she is surprised that Turfway's existence is even in doubt and it makes her sad.

“It's scary. It really is scary.”

Turfway “gives so many people job,” she said. “So many people would be out of work. Just think of the hay and straw people, the feed man. There's so much involved in horse racing. It's not just the big guys.”

Trainer Jeff Greenhill left a career as chemical engineer in Alabama to go into horse racing. He's been training about 25 years, wintering at Turfway Park throughout.

“This is the place that the little guy survives — here and Ellis Park,” Greenhill said. “There are 1,100 horses here, and I've got 18 and I have eight employees. You can do the math: There are a whole lot of people here employed by the horse-racing industry. Unless purses stay at a reasonable level, I'm out of business or I'm moving to New York, Florida or Indiana.”

Veterinarian John Piehowicz, who has served clients on the local racing circuit since the early 1990s, also sees difficult choices ahead without historic horse racing.

“If SB120 isn't passed then I think this (Turfway Park) is done,” he said.

Piehowicz says racing “is the one industry where trickle-down economics works. If you look around the racetrack here, there are a lot of people who depend on the horses, depend on the income – whether it's a Sunoco station around the corner where half the people who work here go and buy their snacks or the local community. When this place closes it's going impact more than horse racing in the state of Kentucky.”

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