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Monday, March 19, 2012

Barriers to Marketing; Summary of Rule Proposals

Today, Jason Settlemoir presented a proposal that the USTA form a committee to study marketing and funds for drug testing with funds coming from the slot fund.  It was made clear for marketing purposes, such funds would be used to promote racing in slot states and not in non-racino jurisdictions.  

Joe Faraldo, as expected, voiced his opposition to the proposal.  His feeling is if racetracks are making $300 million in slot revenue and horsemen are getting $100 million in purse enhancements, he feels a partnership would be the racetracks contributing 75% to the horsemen's 25%; anything else would be not constitute a true partnership.  To be fair, he has indicated that the SOA and YR have been doing marketing on a 50-50 split in an amount greater than the proposed .5% of the purse account.

While in the perfect world Faraldo might be right, this is not a perfect world; slots are not going to disappear from the tracks, but horsemen may.  Who needs the marketing more?  Also, despite being told no marketing dollars would be spent in non-racino dates, there was an insinuation this marketing fund would be used to televise Meadowlands races. 

Ignoring horsemen groups objecting, the biggest problem to the Gural proposal may be the regulation of the industry.  As mentioned by a couple of speakers, how purse funds are spent is dictated by state law and/or commissoin rules.  Even if a horsemen's group wanted to dedicate funds to a marketing campaign, they likely would not be able to contribute under current rules.  Whether or not you agree with the Gural plan, it is obvious the regulation of horse racing is so regulated where casinos are not as micromanged in some states; thus putting racing at a competitive disadvantage.  This is something which must be worked on regardless of the Gural draft proposal.  Racing must be free to innovate and if racing commissions are tying the industries hands behind the back, what hope is there to compete fairly?    

From the discussion which was cut short, it was clear there continues to be a parochial view by some in the room (not just New York horsemen), as if each state was in a perfect silo and what happens in my own state is what is important.  Until the racing industry in general gets away from this narrow view, horse racing will continue to suffer.

Anyway, the USTA has formed a working group to study the Gural proposal and to also determine how much and where current marketing dollars are being expended.

Perhaps, the most distressing thing I heard was the talk slot revenue is not a subsidy but a partnership; language which is being used in Ontario at this time.  The New York slot law was cited in how the purpose of the law was to stimulate the breeding industry and racing through higher purses.  To those who think this can't change, you are mistaken.  Whether you call it a partnership, subsidy, or welfare, the legislatures can change any law they want as long as it is not restricted by a state's constitution.  Like companies that form partnerships, a state legislature can end any partnership they want by law.  My questions is how long will a state maintain a partnership where wagering levels overall continue to decline and interest in the product falls?

As usual, the end of the USTA annual meeting, rule proposals are voted on.  Regarding rule changes which impact the horseplayer, none of the proposals were approved.  Here is a summary of the decisions made by the Rules Committee which was affirmed by the Board of Directors:

  • Proposal 1 - A proposal to make it a violation for not making a reasonable effort to keep holes closed - Defeated.
  • Proposal 2 - A proposal to make it a requirement that when a horse pulls to the outside, it must make a reasonable attempt to advance - Defeated.
  • Proposal 3 - A proposal that a trotter that has successfuly qualified with hopples may go back and forth with regards to hopples without another qualifier. - Defeated 
  • Proposal 5 - A proposal to mandate driver changes at least an hour before a matinee, qualifying,  or country fair race; otherwise the judges will have the ability to scratch the horse - Defeated
  • Proposal 7  - Changing the timing of races to hundreths of a second - Withrdrawn. 

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