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Wednesday, December 8, 2010

While Optimism Abounds, Reality is Less Optimistic

SBOANJ President Tom Luchento is cautiously optimistic about there being a meeting at the Meadowlands in 2011. This would appear to be good news for horsemen, but the reality is breeders may be in danger of being thrown overboard unless those plans include retention of the stakes program in reasonable facsimile to the way it’s been.

First of all, it has been reported that the SBOANJ must lease the Meadowlands for $1 plus cover the expenses or the Christie Administration would close down the Meadowlands. One thing for sure is the NJSEA has run its last full meet at the Meadowlands (due to timing requirements to get a new licensee approved, the NJSEA may need to run the meet until the SBOANJ gets licensed).

Why is the NJSEA out of the equation in the long run? Some people have speculated our friends from the thoroughbred industry are getting ready for a reenactment of the “Ides of March”; the betrayal of the Standardbred-Thoroughbred alliance to keep the runners racing strong in New Jersey. What does this mean? The scuttlebutt of this unsubstantiated speculation is the thoroughbred industry realizes any notion of having a 141 day race meet next year is suicide; a short Elite Meet is the only answer. Only problem is there are no supplemental funds coming their way to support their purse structure. Where can they get additional revenue? Meadowlands OTW simulcasting.

Go to the Meadowlands on a Saturday afternoon, and about $2 million is wagered on thoroughbred racing at other tracks. While the Meadowlands is running a harness meet, the revenue goes to the harness interests; while the Meadowlands is dark, the money is divided between the thoroughbred and harness interests. If the NJSEA eliminates the harness meet, and the paddock is considered an OTW site, it is believed 65% of the revenue would go to thoroughbred interests at all times and 35% would go to harness interests, likely Freehold Raceway if there is no replacement of the Meadowlands meet. If harness racing disappeared completely, all simulcast revenue would go to the thoroughbred interests. At a minimum, if the Meadowlands ceased racing harness racing, 65% of the simulcast revenue for the traditional 168 days of harness racing would go to Monmouth’s purses. If the NJSEA is out of the picture at the Meadowlands, the possibility exists that the thoroughbred horsemen would ask for legislative relief in an effort to get a bigger share of simulcasting revenue on thoroughbred simulcasting at the Meadowlands to be sent to Monmouth Park to help offset the shortfall in revenue for purses for the Elite Meet; basically a situation similar to the Maryland Jockey Club and Rosecroft Raceway. If the new Meadowlands meet operators doesn’t agree to a redistribution of simulcasting revenue, would the Monmouth horsemen withhold their simulcasting signal from the Meadowlands and then what about the other thoroughbred tracks sending their signal? Unless the lease includes the right for the SBOANJ to maintain the current simulcasting agreements, even lower purses seem to be in the future.

As for starting the meet the first weekend of January? If a new group is taking over the racing license, the NJRC is required to perform an investigation to see if the SBOANJ and any potential partners are qualified to operate a race meet and have the financial resources to operate a race meet. How the NJRC could complete an investigation and approve a new licensee in a quick enough timeframe remains in question, so expect the NJSEA to kick-off the 2011 racing season and then transfer the license to the SBOANJ.

Knowing the success rate of horsemen historically running their own race meets, I asked a few people what groups could partner with the SBOANJ. Hambletonian Society? Not likely. What about the breeders who need the Meadowlands to showcase their horses? Highly unlikely as many of them are not on solid financial footing to begin with. So even if the SBOANJ is able to obtain a license to run a meet, with the expenses of running a Meadowlands meet unknown, the question is would they be able to hold a full meet? Possibly, but it would require a more conservative purse structure, making the Meadowlands a Balmoral East; purses on the level of Freehold; worse than the purses at the current fall meet. After all, all the proposals the New Jersey legislature is proposing will take time to implement and assumes other racing jurisdictions don’t do the same thing; otherwise, it will dilute any anticipated financial gain.

If you were a breeder, you can imagine the thought of a SBOANJ race meet at the Meadowlands does not breed excitement. What the breeding industry needs is a meet like the traditional Meadowlands meet; a meet with plenty of stake races. Overnight racing does not stimulate the breeding industry and horse ownership; it is races like the late closing and early closing series which draws interest in horse ownership. Looking back to this year’s fiasco at the yearling sales regarding NJ Breds, it seems to confirm this fear. No one is buying a well bred horse with eyes of winning $4,000 overnight races; it is races like the Hambletonian which attracts investors in horse ownership. A meet which one can imagine will occur at the Meadowlands if run by the SBOANJ would likely continue the decline in the NJ yearling market. As people in the industry will tell you, the Meadowlands promotes interest in breeding. A bare bones Meadowlands meet will likely result in commercial breeding dying in a few years. A breeding farm may extend its life by going to a different state, but eventually there will be no escape. While dates for the NJSS have been set for next year with purses determined based on the prior year’s handle, it is only a matter of time before the NJSS would have to be scuttled and replaced with a program based on mares residing in state to foal a horse from a sire from any state.

I talked to Bob Marks of Perretti Farms regarding options for a replacement to a NJSEA sponsored meet at the Meadowlands. If a six day Meadowlands meet was run just to meet its obligations for the Hambletonian surrounded with overnight races, they may as well not race it at all. A six day meet at the Meadowlands as per Hanson to meet the Hambletonian contract does nothing if overnight races accompany the Hambletonian; Hambletonian Day would still have to have its traditional all-stakes card to make any sense. A fall-winter meet at Monmouth is also useless; both harness and thoroughbred interests have no desire for this option.

So I asked Bob Marks if he had his choice, what he would like to see. He expressed two preferences. The first preference would be for the state to tear down the existing grandstand and build a two thousand seat grandstand styled like Tioga Downs on the other side of the track to allow the NJSEA or another group to continue to run the Meadowlands with a casino standing where the original grandstand was built to maintain the Meadowlands name. Failing that, his preference would be to race at Atlantic City Race Course if Greenwood Racing (owners of Philadelphia Park and Atlantic City Race Course) would be interested and hopefully there would be some casino support to fund some of the bigger races if nothing else, to help stimulate the greater Atlantic City area. A Meadowlands at Atlantic City meet may maintain the current simulcasting wagering on the live product, but on-track simulcasting of incoming thoroughbred signals would be much smaller as a result of the relocation of the meet from Bergen County to Atlantic County. It would be essential for a Meadowlands at Atlantic City meet to depend on the Atlantic City meet receiving the same percentage of simulcasting revenue at the Meadowlands OTW as they would get of the meet was being run at the Meadowlands.

I asked Marks what about running a studio meet at a Gaitway Farms similar to what is being done in Quebec. While something like this may be received by gamblers, it would do nothing to stimulate interest in harness racing or breeding as you need to get people into a winner’s circle surrounded by people in a grandstand, experiencing the smell of the horses; not sitting in front of a computer to build excitement into horse ownership. In fact, no one would be attracted to racing; all which would happen is legacy harness players would continue to gamble until they died out.

A final question I posted to Marks was the possibility of Yonkers becoming the number one American track. Marks believes the days of the half mile track being in vogue are long gone. When asked what if Yonkers adopted a more European style of racing (multiple tiers and distance racing), he indicated there is a lot of tradition to overcome; something he suspects racing is not willing to give up.

When asked what would happen if Freehold became a 5/8ths oval, he did concede there is a slight chance 5/8 mile racing would be accepted by gamblers, but he would find it hard to believe the state would be willing to expend money on a privately owned track to expand the oval and install lights.

I keep wondering what harness racing did to put itself in this position. Certainly, there have been mistakes made like the thoroughbreds, but our situation has gotten much more critical over the same period of time. In some ways, I am convinced that the Meadowlands opening has put racing in the current situation. With the arrival of the Meadowlands, the trainer/driver died. While we had the trainer/driver, we had horsemen willing to look out for the horse’s best interest over the long term and they were driven the same way. With catch driving in place, we have both drivers and trainers who consider horses rentals, not worrying about the long term health of the horse. We went from small time stables controlling their share of horses versus the twenty stables which seem to control 80% of the earnings, moving horses up, seemingly impossible, over a few days.

We also refuse to remove the apparent conflict of interest between trainers and owners. As I have said numerous times, the runners were smart enough to license jockeys to ride and do nothing more, making them hungry. With standardbred racing, we have trainers driving and drivers training. In the old days, two family members were in the same race decisions needed to be made. Now, as a example, (inferring nothing), we can have a John Campbell driving for Bruce Saunders instead of driving for his brother Jim Campbell. At a minimum, we need to make it a family member must driver for a training family member, even if not living in the same household. If  Luke Plano is training a horse, Rick Plano must drive the horse or take the race off. If Rick and Luke Plano are driving only one can drive in the race and the other must take the race off. In other words, standardbred racing must get its integrity back.

Judges and Stewards must have no prior experience in the sport no more than book smart and come down hard on violators. Drivers and trainers must begin claiming objections and stop acting like they are members of a fraternity.

Can racing do it? After all our current problems are so institutional, how do you fight years of tradition? When you are racing for $1,000 a race and people flee the game it becomes essential to make the changes you are rejecting at present. Of all things, we must have hope that the industry leadership finally realizes tradition be damned and it is time to remove all conflicts of interest.


The_Knight_Sky said...

Fascinating comments in this post.
What about the employees at the Meadowlands facility?

Will some of them be hired by the NJ SBOA? Laid off or rehired? Or will there be an entirely new cast of characters at the track in 2011?

And regarding the purse structure for the 2011 Harness meet, what about the possibility of a "bridge loan" until the new OTWs and other gaming bills kick in?

Phil J. said...

I've been complaining about the multiple entries from the same barn/family etc. for awhile. I don't like coupled entries either. You can do it in thoroughbred racing because there are no holes to be given, no 2nd over trips and no park outs. However, the circumstances that are a standardbred race dictate that certain decisions can be made to "help" another trainer, driver, entry etc. gain an advantage.

That Blog Guy said...

Probably most of the new hires will come from the existing hires. I think NJ Law makes it harder to get out of labor contracts with unions.

There is some proposal to provide the NJRC with money totalling $30 million over three years from the advertising funds for AC as a bridge loan, but it is already getting pushback.

There is also talk about video poker providing a $30 million bridge loan, but once once NJ starts it, how long till NY and DE offer it so will there even be $30 million there?

No bank in its right mind would offer a bridge loan.

That Blog Guy said...

Let me make it clear that I am not inferring anything about the Campbells or the Planos. Their names came to me so I used them as an example. Nothing here should be used to infer wrong doing.

That Blog Guy said...

Regarding entries, it has been a problem since the racing commissions have loosened up protection for the customers at the request of the industry.