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Wednesday, August 29, 2012

...The Solution

In Monday's column, I discussed the problems harness racing and the breeding industry is suffering from as the result of people legitimately gaming the system when it comes to purchasing yearlings which results in situations like the nine horse - three wagering interests race this past Sunday at Vernon Downs as well as certain stables having an embarrassment of riches due to the same group of people owning the top horses. For racing and breeding to survive, it is necessary to change the rules to make it harder for the same group of people controlling the top stock.  You can't expect new owners to come into the yearling game if they are effectively locked out and breeders can't survive if their regally bred horses are not receiving top dollar as those regally bred horses are the ones who subsidize breeder's losses on horses below the cream of the crop.

Don't you love it when you read an article from someone else basically saying the same thing you have been discussing?  Jay Bergman from the DRF talks about the fallacy of Joe Faraldo's New York Renaissance.  And here is a letter to the Albany Times-Union from an individual who has been involved in harness racing for the past thirty-five year.  When talking about Saratoga Raceway and Casino, the write says, "...I don't believe it has helped the racing there to any extent. It is often sad to see the harness track's win pool total way under $3,000 per race and less than 100 people watching the live race".

Read more:

Before we discuss possible remedies, I would like to share a comment I received from a breeder regarding Monday’s posting.

There is nothing more frustrating than showing yearlings to people that have no intentions of competitive bidding but are shopping to see which fractional pieces may be offered later.

Make no mistake, there is no one magic bullet to solve this problem, it will take a combination of steps to solve it. I am also sure many of the big spenders see no problem with the current system, but then why should they as they are the benefiting under the current rules?

To get more people interested in purchasing yearlings, we need to raise the reward for people investing in yearlings which means more stakes races and existing stakes races offering higher purses. Increasing stakes payments is not the answer; all you are doing is lowering the rewards. What needs to happen is the shifting of funds from overnights to stakes races, reducing the incentive to purchase ready-to-made horses and increase the potential reward of stakes horses.  This can be done in racino states as horses are racing for amounts so great that the cuts needed to fund stakes races should not have a significant impact; racing will still be more than profitable if you have a decent horse.

Steps need to be taken to remove some of the incentive for diversification (in the name of purchasing many small pieces of horses instead of larger stakes in fewer horses). Stakes conditions must be changed to limit the number of starters an owner or trainer may have in a race.

To begin with, no trainer should be allowed to start more than two horses in any one stakes race, period. No allowing a trainer to start multiple horses in eliminations and then deciding which two horses advance to the final. No limit of two horses per stable in each division; no more than two horses in a stakes race per trainer period. Additional restrictions would be implemented to avoid circumvention (such as transfering a horse to a different trainer) of the trainer restriction.

The same rule applies to owners. No owner will be allowed more than two starters in a race, regardless of who is training the horse. For purposes of this rule, any owners with more than 5% ownership in a horse will be considered one and the same. As a result, only one additional horse may be entered from any one or group of these owners.

These rules would force trainers and owners to decide which horses to nominate to a stakes race and also prevent trainers from flooding the entry box, opening the race to others which, when coupled with higher purses, makes owning stakes horses more attractive. In addition, it would keep people from buying small shares of multiple horses.

Wouldn't this cause the collapse of the yearling market? Remember the first suggestion to move more money to stakes races instead of overnights? There are not enough stakes races being contested on a given day. With more money available for stakes races, tracks could coordinate their stakes calendar not to avoid competing against each other, but the opposite; competing against each other. Of course, you would not want two $500,000 races on the docket for 3yo pacers on the same day, but having two or three stakes races for 3yo pacers on the same day would give trainers and owners the option of seeding their horses to different races. Their first string may go compete in a $500,000 race, their second string compete in a $250,000 race, and their third string competing in a $100,000 race. This additional stakes racing would help fight off a decrease in yearling prices as there would be more races for horses to target according to their ability.

With horses being strategically placed, additional horses will have the opportunity to race in stakes events and earn a purse check plus the reduction of coupled or uncoupled entries makes the races better wagering events for the wagering public. 

Of course, this is not the end all. Other steps may help the problem. One thing is certain, the status quo is unacceptable. To get more people into the yearling game, we need to open up the market for other players and allow breeders to get a fair price for their horses.


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