AZ Breeders: ‘No Future’ Without Commission Help to Kickstart Live Racing

Thursday’s Arizona Racing Commission (AZRC) meeting opened with the chairman Rory Goree asking stakeholders to “refrain from discussing anything” related to a controversial appeal over who controls purse account money that is scheduled for the October meeting. And it ended with Turf Paradise owner Jerry Simms apologizing for the frustration the state’s Thoroughbred community feels over his decision not to incur liability by running a 2020-21 meet during a pandemic.

In between those brief, book-ended statements that define the currently closed status of racing in Arizona, commissioners heard a slew of impassioned pleas from breeders, owners, and trainers all desperately imploring the AZRC to take some form of action so that live racing can get back up and running in the state for the first time since March.

Last month, Turf Paradise withdrew its request for a traditional autumn-through-spring meet, citing COVID-19 concerns. Arizona Downs months ago called off its summer race meet after failing to secure permission top open from local health officials. Beyond the pandemic, a prolonged fight over off-track betting (OTB) privileges, simulcast signals, and how the horsemen’s purse money can be used has been batted back and forth in the courts and during commission meetings, clouding the future of the state’s two commercial tracks.

“Anybody sitting within the Arizona breeders has seen the value of their horses drop 50%-plus, with no place to run our horses in-state,” said Kevin Owens, a board of directors member of the Arizona Thoroughbred Breeders Association. “There’s a couple of big farms and there’s a lot of people who have people who have ‘backyard’ horses that count on Arizona as a state to facilitate a racing facility to bring these Arizona-breds to track. I don’t know what’s going to happen. I would certainly hope the commission is getting behind Arizona Downs to try to assist them in any way possible to get their meet open [and] operating.

Owens was referring to the possibility of Arizona Downs taking on some winter race dates, an idea that is feasible but depends in part upon the yet-to-be-decided status of the purse account.

“We have no future,” Owens continued. “We’ve been destroyed in this business. Our studs aren’t worth anything. We have a sale coming up [Nov. 19], that by all potential is going to be a bloodbath. We are continuing with our sale, [and] I would encourage the commission to maybe show up at the sale and see what we’re about. We haven’t had much interest from you guys in actually getting into our business and seeing what we do and what it costs to sponsor a sale like this and raise a bunch of horses.

“We’ve given more than one chance to Turf Paradise, and it’s time to move on. There’s been no good faith put forth by that facility at this point, and I believe that we should put everything that we have behind Arizona Downs, as it seems like they are the only ones that are going to have a chance to survive in this state. We need to go forward with an entity that’s concerned with the racing public, the horsemen, and the breeders.”

Breeder, owner and trainer Stacy Campo told commissioners that, “We really need this to happen. I have 18 horses ready to go into training immediately. Twelve of them are Arizona-breds. And you know, we’ve worked very hard to be able to sit here and be the backbone of racing in Arizona. And I hate to say it, but the breeders in Arizona are the backbone. We do supply the stock [and] we need to get live racing. Arizona Downs can do it. I’ve got the horses and the supply to go up there and run.”

Cynthia George, who said she is an owner, trainer, pony person, and exercise rider, underscored that, “the time is critical, because people can’t hold on much longer. Many [out-of-state] meets are coming to a close, and we all need a place to go…. If there’s [an in-state] track available, we need to open.”

Owner Freddy Alvarez added that, “Arizona Downs is the future for the horsemen. We need a place to go. We own 12 horses…. I know [the commission does its] best, but all it takes is a couple of eyes at Turf Paradise to see there’s nothing going on there,” with regard to reopening in the conceivable future.

Robert Hutton, the president of the Arizona Horsemen’s Benevolent and Protective Association, said that, “the horsemen of Arizona are not looking for handouts, but only the opportunity that is offered when a live meet takes place…. It is time for this industry to move forward without the constant distraction that has hindered us for years.”

Not a single one of the 10 horse community members who spoke at the meeting expressed constructive or encouraging sentiments for Turf Paradise over Arizona Downs.

Yet despite all the support thrown behind Arizona Downs, Tom Auther, an owner and partner in Arizona Downs, said he had “nothing to report” in the section of the AZRC agenda devoted to updates from the tracks.

Jerry Simms, the owner of Turf Paradise, did have something to say during the public commentary period after most of the horse community members had spoken. He began by saying that he understood their frustration, but that he felt like he was in a “no good deed goes unpunished” position.

Simms said he has been involved in the Turf Paradise ownership for 20 years, and that the track has been operating at a “huge negative” in recent years.

“The track owes me $8 million. And there hasn’t been a distribution since 2005. But I was happy—and am happy—to continue doing that,” Simms said.

But then, Simms added, COVID-19 changed everything.

“I made the decision that I didn’t want to have the liability,” Simms said. “There are many lawsuits out there where people are suing, and claiming that [business owners are negligent for operating in a pandemic]. And it was a difficult decision for me to make. But we sat down with my top management and realized this is what we had to do. We just didn’t want the liability of putting people in that kind of risk. But I completely understand the frustration that the folks have had. I’m sorry about that part. That’s all.”

Although no immediate lifeline for the return to live racing was proposed by the AZRC, Goree said that moving forward, his organization needs to “start looking at what the requirements are regarding live racing versus having an OTB. I would just want the department to maybe start looking at that and report back to us as to what powers we may have regarding if [a licensee is] not offering live racing [but still operating] OTB networks.”

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Uncertain Future for Arizona Racing Industry

At the Arizona Racing Commission meeting last month, representatives from the state’s flagship racetrack, Turf Paradise, announced that they wouldn’t be running their scheduled 2020-2021 race meet between November and May, blaming a variety of factors including health concerns due to the global pandemic, and economic question marks surrounding the operations of Off Track Betting (OTBs) facilities.

That decision has sown seeds of confusion and doubt among many involved in the state’s racing industry–a scenario complicated by ongoing friction between the horsemen and Turf Paradise management.

“Definitely a huge impact,” said trainer Jared Brown, who ordinarily is based in Canada during the summer and at Turf Paradise in the winter. Brown’s southern sojourn is usually a time for restocking his stable for the year ahead, but without that opportunity this winter, “it will impact my business a big deal,” he added.

With the next commission meeting looming this Thursday, perhaps the most pressing issue is this: What may happen to the 2020-2021 race dates, seemingly up for grabs?

“I don’t know what the future is,” said Kevin Owens, an Arizona-based breeder and former president of the Arizona Thoroughbred Breeders Association (ATBA). “I think it’s important to get Arizona open. Give some hope to the people.”

Tom Auther, an owner and partner in Arizona Downs, said that he has informed the Arizona Horsemen’s Benevolent and Protective Association (AZHBPA) that his track could be in a position to conduct a truncated meet this winter. But first, funding would have to be secured–another bone of contention thanks to a fight over who controls the funds in the purse account.

According to Vincent Francia, Turf Paradise general manager, the funds contractually belong to Turf Paradise. “The purse monies are for a specific purpose,” said Francia. “And that is for the horsemen that race at Turf Paradise.”

The horsemen, however, argue that they have control over the purse account. As per a prior arbitrated settlement, “that purse money belongs to the horsemen,” said Leroy Gessman, president of the National HBPA, who added that the account currently totals an estimated $2.1 million. “It’s the property of the HBPA,” he said.

The AZHBPA has asked the racing commission to make a ruling on the dispute, said Gessman, who added that the issue is an item on the agenda at the October racing commission meeting. However, “it is still unclear if they have the authority or not” to make that ruling, he wrote, in a follow-up email.

Indeed, according to Francia, such a dispute can only be settled through third-party arbitration, conducted separately from the commission. If the purse money is released to the AZHBPA, that would pave the way for Arizona Downs to possibly stage a truncated meet this winter, said Gessman.

For that to occur, the facility would need about two months of preparation to make it safe for training and racing, said Auther, who added that Dennis Moore, the Southern California-based expert in racetrack surfaces, recently visited Arizona Downs to examine the track surface.

“We’ve never raced in the winter before,” said Auther, explaining some of the racetrack surface safety issues that would need to be navigated. Ultimately, he added, ongoing uncertainty in the state makes planning difficult. “We just don’t know what’s going to happen,” he said.

What’s more, the door appears to remain ajar for Turf Paradise to reverse course and conduct a race meet this upcoming winter.

“I don’t want to give our horsemen false hope,” Francia said, stressing the unpredictable nature of the pandemic. “What I am saying is we’re keeping all of our options open.”

These developments form just the latest chapter in a fraught relationship between the horsemen and Turf Paradise. When the facility officially closed its doors at the beginning of May, for example, track management gave the AZHBPA 30 days to remove its belongings from its Turf Paradise office.

These tensions persisted prior to the August commission meeting, when the AZHBPA emailed the operators of Turf Paradise a list of 17 questions and demands surrounding such issues as the multi-year agreement that the HPBA entered into with Turf Paradise, stable area renovations, and contingency plans in the event of a second wave of COVID-19 infections this winter.

A number of horsemen interviewed for this story voiced concern about Turf Paradise management recently selling off track equipment and certain items of the facility–a possible indication, they said, of the track’s lack of long-term commitment to the sport.

“This is something we do every year,” Francia explained. “If we had to conduct a race meet, I would need a couple weeks to put it together, but we could do that.”

When asked if Turf Paradise is indeed for sale, Francia responded that Turf Paradise owner Jerry Simms is open to offers. “That’s certainly one of the options we’d look at,” said Francia. “But there are no buyers out there right now for Turf Paradise.”

Others have more immediate concerns. According to Arizona racing commissioner Rory Goree, stakeholders need to “put their differences aside” in order to thrash out a way forward “that works for all of us.”

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Turf Paradise, Arizona HBPA Continue To Dispute Settlement Agreement, Winter Meet Cancellation

The following letter was written by Arizona HBPA president Bob Hutton and posted on social media on Aug. 15, following Turf Paradise's announcement that the track would not host a live racing season this year due to the ongoing coronavirus pandemic. Below Hutton's letter is a response from Turf Paradise's general manager Vincent Francia, posted on the track's website on Aug. 17.

TO: HBPA MEMBERSHIP
FROM: PRESIDENT BOB HUTTON
DATE: August 15, 2020

As I am sure everyone is aware, Turf Paradise announced Thursday at the Arizona Racing Commission Meeting they are not running a race meet in 2020 / 2021. This is not a big surprise to me. As you all remember, when we fought last year to keep the track open till May 10th, Jerry Simms stated to all trainers they should take everything with them, do not leave anything behind, including walkers and pens. That was my clue that there would not be any more racing at Turf Paradise. At the commission meeting I stated no permittees will benefit from OTB revenue after the current signed consents for simulcasting have expired! No new approvals for signals will be signed if there is no live racing!

The HBPA has made numerous attempts to engage Turf Paradise in resuming negotiations to successfully run the 2020 / 2021 meet. It was obvious Jerry Simms had no intention of running a race meet, when for the most part the meetings deteriorated quickly once threats of lawsuits were thrown out in the direction of the HBPA Board members.

The arbitration settlement in October of 2019 resulted in the following changes: 1. The OTB split changed from Turf receiving a 60% / 40% split to 52% / 48%. 2. The advertisement contribution from the HBPA was reduced from $400,000 a year to $150,000 a year. 3. It was established that the purse money was the property of the Horsemen, and the purse account was to be in a HBPA controlled trust account, not in a Turf Paradise account. I believe once this happened Jerry Simms made the decision to close the track. The Covid 19 pandemic was just a convenient excuse.

I want all of you to know that in our most recent discussions with Turf Paradise, the Boards number one concern was to avoid the unprofessional behavior that we experienced in March of 2020. The HBPA could not in good conscience inform its membership they could return to Turf Paradise without some guarantee that the race meet would be run in its entirety. Jerry Simms refused to give that guarantee.

During the time that we were on the backside from March 14th till May 10th Jerry Simms charged the HBPA to keep the backside open for the horsemen. Although the HBPA Board did agreed to contribute to 50% of the expense, they were led to believe that it would be approximately $7,500 a week for the HBPA's portion. Jerry Simms then made the HBPA pay a security deposit of $20,000 up front or horseman would have been evicted on March 28th. Not wanting to have everyone evicted on March 28th, we were forced to pay the deposit and sign the agreement to stay. When we starting receiving the weekly bills instead of being charged $7,500 a week, Jerry Simms charged us anywhere from $13,000 to $15,000 a week for a total of $121,162.70. This was almost double what we were told was the estimate. The HBPA filed a grievance in May 2020 with the board of stewards asking for a refund. As of today, we have had no response.

As I stated above, in October 2019 we went through an arbitration with Turf Paradise. As a result of that arbitration it was ordered by the arbitrators that purse money is the property of the HBPA and is to be held in a HBPA trust account, not in Turf Paradise account. Despite several requests throughout the year by the HBPA to have the money moved to the HBPA trust account Jerry Simms has continued to refuse to comply. Again, we filed a grievance with the board of stewards to get this money released to the HBPA's trust account. As of, today we have heard nothing from the commission. We currently have $1.8 million in Turf Paradise's purse account, that he will not move to the HBPA trust account. This purse money belongs to the Arizona Horsemen to be used for a 2020 / 2021 fall and winter race meet in Arizona.

I know these are scary times and I do not want to give anyone any false hopes. However I want everyone to know we currently are having negotiations with other permittees to run a fall and winter race meet. The Arizona HBPA is committed to year around racing and will continue to work with other track owners who may want to come to the Phoenix area! I would like to thank those who have supported the HBPA in their efforts to provide the horsemen in the state of Arizona with a racing venue you deserve! Year around racing in Arizona is our GOAL!

Following is Vincent Francia's response:

Dear Horsemen,

This letter is written to respond to a post written by Mr. Bob Hutton, President of the AZHBPA that appeared on Facebook on August 15. This letter is written to clarify some of the statements and impressions in Mr. Hutton's letter. In other words, to set the record straight.

Mr. Simms has owned Turf for 20 years; 19 of those 20 years race meets were successfully conducted, from beginning to end. It's only this year, specifically when Governor Ducey declared a state of emergency on March 11 because of the Coronavirus that a race meet has
been cut short. The Coronavirus is the only reason Turf cut short its race meet on March 14 and the only reason Turf withdrew its request before the Arizona Racing Commission on August 13 to run a race meet from Nov. 1 to May 1, 2021. Turf does not want the liability of running a race meet while the Coronavirus is active.

Settlement Agreement (Attachment 1)

The Settlement Agreement was written by Mr. Casillas, Director of the Arizona Division of Racing, who also served as the mediator for Mr. Simms and Mr. Hutton as the two men compromised, negotiated and eventually signed the agreement in good faith on March 22.
Either side could have argued specific points of the agreement or declined to sign the agreement. But both sides agreed to sign. Read Attachment 1 for the complete terms of the agreement.

In his posting Mr. Hutton gives the impression that the Settlement Agreement, which by definition is to settle differences between parties, was somehow arrived at without the consent of both parties. On the contrary, both Mr. Simms and Mr. Hutton signed the 14 point
agreement. For example, the parties agreed to split the costs < 50‐50 > of maintaining the backside and training on the man track for 45 days. The AZHBPA was invoiced weekly and the invoices were promptly paid. When the 45 days expired the AZHBPA asked for an additional 10 days, at their own expense, and the request was granted.

It appears that Mr. Hutton's personal feelings toward Mr. Simms and Turf are clouding his judgement. The HBPA is to be neutral, treating all tracks equally, but Turf is treated differently. When Arizona Downs abbreviated their race meet they continued to simulcast without racing live. When that track announced that it would not be able to conduct a meet because of Yavapai County and the City of Prescott Valley's concerns about the Coronavirus, Arizona Downs, without objection from the AZHBPA, maintained their simulcasting and OTB system.

Why not the same for Turf?

Arizona Downs Letter (Attachment 2)

On May 22 Turf became aware of a letter from Mr. Dave Auther of Arizona Downs to Mr. Casillas. Specifically what caught our attention in the letter was the following that revealed how Arizona Downs was going to fund its purses: “This will include a contribution from the HBPA
toward purses. HBPA has a plan to secure purse money from the Turf Paradise purse fund.”

You cannot use the purse money of one race track to subsidize the purses of another track.

Mr. Hutton stated that without live racing there would be no simulcasting. Turf's contract with the AZHBPA goes until May 2021. Turf expects the AZHBPA to honor that contract.

At a meeting in early August with Mr. Hutton and two members of the Arizona Thoroughbred Breeders' Association in my office at Turf, Mr. Hutton asked me if I believed a contract existed between Turf and the AZHBPA. I replied in the affirmative that I believed a contract existed between us. Mr. Hutton then asked Mr. Simms (who was participating by phone) the same question. Mr. Simms answered that he not only believed a contract existed but that it was in effect until May 2021. Mr. Hutton responded that he did not believe a contract existed because we cancelled the race meet due to the Coronavirus, thus rendering the contract void. Mr. Simms then asked Mr. Hutton that if he really believed that, then why are we having a discussion about contractual matters. Mr. Simms then said, “Let's continue to talk.” Mr. Hutton then stood up abruptly and said “We're done,” and left my office.

The abrupt ending of the meeting notwithstanding, Turf has never declined a phone call, an email/ text or a request to meet with the AZHPBA. That door is still open.

Sincerely,
Vincent Francia
General Manager

The post Turf Paradise, Arizona HBPA Continue To Dispute Settlement Agreement, Winter Meet Cancellation appeared first on Horse Racing News | Paulick Report.

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Tensions Between Arizona HBPA, Management Of Turf Paradise Continue To Create Uncertainty

Last week, a press release from Turf Paradise in Phoenix, Az. announced that track management would push the start of the meet back from Oct. 17 to Nov. 27, and said that Turf Paradise was working with Bob Hutton, president of the Arizona Horsemen's Benevolent and Protective Association (AZHBPA), on when horses could begin shipping in.

According to the Thoroughbred Daily News, Hutton emailed a list of 17 questions to Turf Paradise Management on behalf of the horsemen, including such things as coronavirus contingency plans and a promise not to shut down the meet early.

Management's responses to the AZHBPA's questions were not comforting, Hutton said. As such, he plans to send his own horses to other tracks for the winter.

“My recommendation (to other horsemen) would be to, based on the track not being able to guarantee that they'll run the entire meet, then you'll probably need to make other plans,” Hutton told the TDN.

Read more at the Thoroughbred Daily News.

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