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Wednesday, February 12, 2014

The Need to Nationalize

Forbes had an opinion piece regarding the proposed legislation by Rep. Todd Stephens to divert money from the Pennsylvania Racehorse Development Fund to schools so as the article says cynically, "Johnny and Janey can learn how to read the tote board".  This piece by David Brunori is nothing new in substance; the question is why is the state pumping money into a dying industry where it could be using these funds for the public good, in this case educating the state's children?

While the article if erroneous in talking about how the rich track owners are getting the revenue, neglecting to mention how the funds are eventually put into circulation to promote breeding and paying the not so rich grooms, blacksmiths, and farmers, you can't dismiss the ultimate question.  Why should 'the state' (because this is not  just Pennsylvania), spend needed funds on a special interest area with limited upside potential when those funds can be used for the perceived general good?

Let's face it, if you weren't involved in the industry as a fan or insider, you would have a hard time making a case to support horse racing.  You can cite all the economic benefit of keeping those involved in the industry employed, but when you are dealing with a product with little existing and declining demand, that argument falls short.  After all, we all love keeping people working, but in this high tech world, would you want to have the government direct funds to keep the typewriter industry going?  Probably not.

The key is the industry (all breeds) needs a dramatic reset to become a bigger part of the American fabric.  The current model of states controlling the racing calendar and setting up race dates and rules is outdated at best, and realistically, counter productive for the industry's survival.  With 18 states having harness racing, we basically have 18 different groups running around like chickens with their heads cut off, each going their own way; thus there is no cohesion between the various tracks and breeding programs and little if any marketing going on.  If we nationalized racing (through compacts) be it through a commissioner or other regulatory body, we could have the whole industry marching in lockstep in one direction, allowing a stronger product to be developed and marked.  It is only through nationalized groups such as PMU or ATG, that racing could become a stronger sport and one which can appeal to a national market.

Odds are there would be fewer race dates (which being there is a shortage of yearlings, is not a bad thing), and admittedly fewer trainers and drivers needed as the industry re-sizes but let's not kid ourselves, what good is it to keep everyone at the current product levels if everyone heads for unemployment?

The truth is less is more but as long as we hold on to home rule, we will constantly be under attack in the state legislatures with the industry eventually being swamped.

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