Tag: The Paddock

To the editor: As a long time racing advocate and participant, I fully support a single medication system. However, I do have concerns and questions regarding the approach now being undertaken by the Horseracing Integrity and Safety Authority. Below are a few questions I would like you to clarify for me.

1. Since there is no federal funding for HISA, where is the operating capital since July 1 coming from since the states have not been providing funds?

2. Who is responsible for personnel decisions and compensation for HISA and is there any oversight as to the amount of compensation paid?

3. Pertaining to the addendum to the law passed by Congress, what groups or individuals were consulted as to the content of the proposal?

Thank you for any clarification you can provide me as well as your readers.

Gerald Bayens

Louisville, Ky.

Editor's Note: Mandy Minger, HISA's director of communications, provided answers to the questions from Gerald Bayens. The numbered answers below correspond to his questions.

1. States and racetracks have been assessed the costs of HISA operations since July 1, 2022, when HISA's Racetrack Safety rules went into effect. States and racetracks have paid those assessments and those payments fund HISA.
2. The HISA Board of Directors and CEO make those decisions. The HISA Board is a volunteer board made up of independent actors from both within and outside the industry and who abide by a stringent conflict of interest policy. HISA Board members are not compensated for their time.
3. This was an Act of Congress – so who they consulted and discussed with is really a question for them.

   The legislation was quite simple in that it directly addressed the Court of Appeals Judge's view stated in oral arguments: “Why not just say to [Congress,] this is easy, this was bipartisan, just put the modification power straight in, it'll be just like FINRA and the SEC, problem solved?” The amendment passed by Congress simply incorporates the modification provision of the SEC-FINRA statute into the HISA statute. (Editor's note: FINRA, the Financial Industry Regulatory Authority, which regulates brokers-dealers in the financial markets, is the model upon which HISA is partly based.)

   HISA, alongside other leaders in the industry who are committed to safety and integrity, did help Congress understand the issues at play and the importance of HISA. More detail on that process was shared by the NTRA's Tom Rooney recently.

   If you'd like to submit a letter to the editor, please send it to info @ paulickreport.com along with your name, home state, and relationship to horse racing (owner, fan, horseplayer, etc). Letters are subject to editing for accuracy or clarity.

The post Letter To The Editor: Questions (And Answers) Concerning HISA appeared first on Horse Racing News | Paulick Report.

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A recent letter from a horseplayer suggested it would be “useful – and good journalism” to report how much of a track's betting volume comes from computer assisted wagering accounts typically affiliated with licensed offshore advance deposit wagering companies that offer rebates to their customers.

I agree that it would be useful – if that information was made available, which it isn't. It also might be discouraging to a non-rebated horseplayer knowing that he or she is not betting on a level playing field under the original concept of pari-mutuel wagering. They are still gambling against other players, but some of those players are getting a steep price discount that amounts to a lower takeout.

Computer assisted wagering players are not necessarily betting to win, and contrary to what many believe, they are not winning in the traditional sense of the word. They are wagering at an extremely high volume in hopes of 90 percent or more of the amount bet being returned to them on winning combinations. The rebates they receive can then push them into profitability.

Let's say Player X makes $100,000 worth of bets in various pools identified by the computer algorithms. When the results are tallied in this hypothetical situation, let's say Player X had winning combinations that paid $94,000.

You and I might conclude that player lost $6,000. In fact, when a rebate on the $100,000 in wagers is factored in – for the purposes of this case let's say it was 10 percent, or $10,000 – Player X went from a $6,000 loser to a $4,000 winner.

That is substantial. Suppose the blended takeout on all wagers is 20 percent, the amount you and I have to try and overcome. With a 10 percent rebate, Player X is betting against what is effectively a 10 percent takeout.

The Jockey Club in 2018 estimated computer assisted players accounted for upwards of 19 percent of total North American pari-mutuel handle. That's roughly $2.1 billion of the $11.3 million wagered in 2018, and there's no reason to believe these players are betting less today than they were then.

Tracks and state racing commissions are not disclosing how much of the betting volume is coming from players who are getting discounted pricing. They really don't want the everyday players to know. It's difficult enough to win on a level playing field when 20 percent on average is carved out of each bet. Beating the game when one-fifth or more of the betting volume is from players with such a significant price advantage makes it that much tougher.

Gimmicks like the Pick 6 with a large carryover or Jackpot bets were once marketed as opportunities for players to make a life-changing score. Increasingly, however, those multi-race bets are being won by computer assisted wagering accounts that, because of the rebates they receive, can afford to spread their selections deeper than typical players.

They've also created havoc when their batched last-second bets cause major swings in the odds of horses in the win pool. Contrary to what many think, these last-second odds changes don't always result in the horse with the largest drop in odds winning the race. But it can be infuriating to players and breeds suspicion among them.

Track operators may not like letting the computer assisted wagering players into their pools, but almost all of them do, several have told me, because they can't afford not to.

The New York Racing Association and, more recently, The Stronach Group have  reportedly taken steps to limit computer assisted wagering players from making last-second win bets, either by cutting them off before betting closes or by raising the cost of those bets. From what I've been told, those players have moved their action to other pools, where late odds and payoff swings are not as public.

Since NYRA and Stronach are part owners of Elite Turf Club, the largest of the offshore rebaters catering to computer assisted bettors, these two entities are in position to tilt the playing field back in the direction of the average horseplayer. I wish they would do that, while those players are still in the game.

That's my view from the eighth pole.

The post View From The Eighth Pole: Leveling The Playing Field For Gamblers appeared first on Horse Racing News | Paulick Report.

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The following is in response to a Letter to the Editor from Martin Chamberlin of Bluemont, Va., advocating for Laurel Park to become the permanent home of the Preakness.

To the editor:

Laurel Park is not a suitable home for the Preakness Stakes. Mr. Chamberlain mentions MD bill 897, which did require project progress reports from the Maryland Stadium Authority (MSA), but he fails to state that bill also required the Maryland Economical Development Corporation (MEDCO) do a feasibility study on Laurel Park with an eye toward possible purchase of Laurel by the state of Maryland. The reason the legislature wanted the MEDCO feasibility study on Laurel Park is that The Stronach Group does not want to pay $40 million in federal capital gains tax on state funds for construction at Laurel. The only way to avoid that tax liability is for the state to own the property.

That MEDCO feasibility study found that the foundation of the Laurel grandstand has significant problems. Also that the grandstand roof, HVAC, plumbing, and electrical system are in “poor” or “bad” condition and require significant repair or replacement. The stable area, including dormitories where stable workers live, were recommended for demolition by consultants.

Actually, the only structure on the Laurel property MEDCO says can and should be saved is the historic saddling paddock that Mr. Chamberlin wants to tear down and replace with a new paddock and walking ring with tiered viewing stands. MEDCO suggests the current paddock should be placed on the National Register of Historic Places “for its representation of a distinctive architectural typology.”

The MEDCO study may be found here.

Mr. Chamberlin also incorrectly states that MD bill 897 “permits a grand vision for a new Preakness home at Pimlico Race Course, authorizing the issuing of bonds, but contingent on agreements between the Maryland Jockey Club, LifeBridge Health, the City of Baltimore and the stadium authority.” The Racing and Community Development Act, which became law in 2020, already did all those things.

All agreements between the MJC, LifeBridge, and the MSA are already in place, including the agreement for The Stronach Group to lease back Pimlico – nothing contentious despite what Mr. Chamberlin incorrectly assumes. The Racing and Community Development Act authorizes $375 million in funding from a combination of casino and lottery funds as well as state backed construction bonds. $155 million of those funds were dedicated to construction at Laurel, with the remaining $220 million dedicated to Pimlico to cover not just the racing portion but also community use portions as well.

But whether The Stronach Group maintains ownership of Laurel Park, or sells it to the state, the costs of turning Laurel into a home for the Preakness are exorbitantly prohibitive – well beyond the original $155 million provided in the Racing and Community Development Act.

Laurel Park's grandstand was built in 1911, before wetlands laws, on Patuxent River Basin swampland. Parts of the Laurel Park property are now protected wetlands, including the Laurel Park infield, therefore unavailable for use. About every 20 years the racing oval must be reconstructed because the swamp keeps trying to reclaim it. The most recent track reconstruction was done just last year, and before that in 2004. The Paulick Report published several articles about it last year, including the information on how many horses died before management decided to rebuild instead of haphazard patching. How is a racing oval that sinks into a swamp requiring major reconstruction, costing tens of millions of dollars, every 20 years or so economically feasible?

Another economic reality Mr. Chamberlin does not seem to be aware of is that Baltimore is an independent city with its own government, tax base, etc. Baltimore can not afford to lose the more than $50 million in economic impact from the Preakness. The City of Baltimore has fought long and hard to keep the Preakness in Baltimore.

Investments both public and private have already been made in the revitalization of the Park Heights neighborhood, and that neighborhood revitalization project is still ongoing. Mr. Chamberlin simply has not done his homework. Perhaps he should consider reading the Baltimore Sun in addition to The Paulick Report if he intends to involve himself in Baltimore and Maryland politics.

It should also be noted that the City of Laurel does not have the amenities required to host a Preakness attendance but Baltimore, a major city instead of a small suburb, does.

Diane Hain
Pikesville, Maryland

If you'd like to submit a letter to the editor, please send it to info @ paulickreport.com along with your name, home state, and relationship to horse racing (owner, fan, horseplayer, etc). Letters are subject to editing for accuracy or clarity.

The post Letter To The Editor: Laurel Park Not Economically Feasible As Home Of The Preakness appeared first on Horse Racing News | Paulick Report.

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