Alex Waldrop Straight Up : Alex Waldrop

These Numbers Don't Lie

aspradling — Thu, 17 Feb 2011 21:27:00 GMT

I have heard both directly and indirectly from a number of you in response to the consumer research reported in my blog last week. I noted in that blog that in 2009, polling conducted by the NTRA’s long-time polling consultants (who we share with Institute of Politics at Harvard University's Kennedy School of Government) found that about 50.6 million adults in the U.S. qualify as Thoroughbred racing fans and that about 5.6 million adults say they attend a racetrack or an OTB or log onto an online wagering site and “bet a few times a month.” Some of you have questioned these numbers. Here is a brief explanation of how these results were reached.

Some questioned whether horse racing in the U.S. actually has about 50 million “casual” fans. That is not only the conclusion of a recent 2000+ respondent, Internet-based survey of sports fans conducted by SocialSphere Strategies for the NTRA. It’s a number that has been consistent over the course of the last 10 years of NTRA polling using a variety of online and offline methodologies.   Similarly, 10 years of ESPN Sports polls have consistently found that about 37% of adults (potentially 83 million people) described themselves as fans of our sport.

Others questioned whether our business has 5.6 million “core” fans - fans who watch and wager “a few times a month”. This number (which given the statistical margin for error could be somewhat higher or lower) is likewise supported by years of research at the NTRA. Once again, the ESPN Sports polls also confirm that roughly 2 to 3 percent of the adult population cite Thoroughbred racing as their “favorite sport.” 2.5 percent of the adult population of 223 million is 5.6 million fans.

These findings are further supported by the size of total attendance at racetracks nationwide. According to 2007 data, which is the most recent available, live attendance for 2007 at well over 200 thoroughbred, harness, quarter horse and mixed meet racetracks in 38 racing jurisdictions nationwide was approximately 20 million visits. Twenty million annual visits puts horse racing as the #2 spectator sport in America behind only one other U.S. major league sport, MLB, and ahead of the NFL, the NBA, the NHL and NASCAR. And many millions more racing fans visit the nation’s 1,100+ simulcast locations (including OTBs, dog tracks, jai alai frontons, casino race books, racinos and native American reservations) and ADW sites, many of which do not track attendance and which together account for about 90% of all handle. A dying industry we are not.

Think also about television viewership. In years when a Triple Crown sweep is on the line, total viewership for the Derby, Preakness and Belmont Stakes will approach as many as 30-35 million viewers. Yes, there are overlaps in viewers, but the Kentucky Derby is routinely the fourth or fifth highest rated sports broadcast behind the Super Bowl, the BCS Championship and the NCAA Men’s basketball finals – three sports that each have fan bases well in excess of 100 million.

Regardless of the specific numbers which some will always question, it is important to realize that the size and scope of horse racing in the U.S. are huge. Nonetheless, the sport’s somewhat local or regional appeal—and its diffused impact on local economies—make it tough for anyone to ever see its full scale and scope except on rare occasions like Kentucky Derby day. Both in terms of polling data from multiple independent sources and our own attendance data, there are millions of fans engaging with racing on a daily basis. However, even industry insiders don't often see or “feel” the impact, and this makes it difficult for many of them to understand the overall magnitude of the sport.

Our challenge as an industry, and specifically at the NTRA, is to bridge the gap between perception and reality – between the perception that declining live attendance means a dying industry and the reality that through progressive industry dynamics, we are adapting reasonably well to an increasingly Internet-based commercial and communications environment.   This is a challenge that must be addressed if we are ever to convince even our own industry’s insiders, much less the broader sports entertainment world, that horse racing is rising to meet the challenges of this new century.

The mission of the NTRA is and has always been to help bridge this gap, to coalesce the human and financial resources necessary to establish Thoroughbred racing as a major sport and entertainment option in the U.S. After 10 years of effort, we still have a long way to go before our goals are reached, but it is important to realize that in spite of a vengeful economy and a few self-inflicted wounds, we as an industry have made progress and the public still loves our game.

How do we bridge this gap between perception and reality - between local impact and national significance? Let me hear from you.

International Connections

aspradling — Mon, 29 Nov 2010 20:23:00 GMT

I am writing this as I head to the Narita Airport in Tokyo, Japan. I was here these last few days for the 30th annual Japan Cup as a guest of the Japan Racing Association (JRA). It was the first time I ever had sushi for Thanksgiving dinner.

The Japan Cup drew more than 106,000 patrons to Tokyo Racecourse, a magnificent structure that comfortably hosted the large crowd. It was completely renovated a few years ago and may be the finest racetrack in the world - think Belmont Park only longer and several stories higher; think Arlington Park with even more amenities; think Churchill Downs with even more priority seating; think Keeneland with an even nicer barn area.

Total handle on the day was 27.4 billion yen. Ninety yen equal one U.S. dollar. Thus, total handle for the day was more than $305 million, an astronomical figure by U.S. standards. I was informed that one off track facility in downtown Tokyo usually handles $100 million (U.S.) on Japan Cup Day. That one facility, therefore, handles more than the entire U.S. bets on Breeders' Cup Day. Only about 5% of Japanese handle is wagered on track. Most betting is done at OTBs or on mobile devices. And Japan Cup day isn't even their biggest attendance day at the track. The Japan Derby, a springtime race for three-year-olds just like the Kentucky Derby, draws up to 200,000 people. This country loves horse racing.

Like the U.S, Japan is seeing some decline in handle due to a rough economy and expansion of other forms of gambling, but you couldn't tell that on Sunday. It was an amazing crowd that cheered thunderously for the favorite, Buena Vista (JPN), a beautiful filly who won the race but was disqualified to second for interfering with Rose Kingdom (JPN) who was declared the winner. It was an unpopular decision by the stewards and one that Japanese fans will no doubt be debating for years to come.

Also in Japan were racing officials, association heads, owners, trainers, breeders and jockeys hailing from Hong Kong, Singapore, Italy, Australia, France, England, Canada and elsewhere. It was another reminder that horse racing is a global enterprise that thrives in many parts of the world because of a common bond with the horse.

The future of U.S. horse racing depends in large part on our ability to link ourselves with the rest of the horse racing world. The world still comes to the U.S. to buy bloodstock (the winner's broodmare sire was Sunday Silence). There is a global market for wagering on our races. But we have to be here in person to build the relationships that will make it possible for us to connect and grow internationally. There is no substitute for face-to-face interaction even in this Internet-driven era.

This past week in Tokyo, we traded the usual business cards and e-mail addresses. More importantly, we also cemented some real bonds internationally—bonds that hopefully will pay dividends worldwide in years to come.

What do you think the future is for racing, internationally? Let me hear from you.

Giving Thanks

aspradling — Tue, 23 Nov 2010 16:08:00 GMT

It is time again for my annual Thanksgiving holiday blog. Knowing that I tend to get caught up in the fun – family, friends and food – I like to take a few minutes before it all begins to express my gratitude too.

Here is my list of things in the horse industry for which I am grateful.

Horseplayers. Always, you are at the top of the list. Without you, there would be no horse racing. You are the passionate voices who want this game of ours to be more than it is – safer, fairer, cheaper and easier. For you, the NTRA works every day—to change antiquated tax laws to help you keep a little more of what you earn for your efforts; and to make sure racetracks have the best procedures and policies in place so that they may conduct the safest racing possible.

Fans. You are the ones moved to write the letters. You bring the carrots and other treats. You demand better treatment for our athletes before, during and after their racing careers. 2010 was the year that retirement and retraining finally began to get the attention it deserves. 2011 promises to be even better.

Owners. Without you, there would be no competition. Special thanks to Ann and Jerry Moss for giving us another year of Zenyatta on track and in the Breeders’ Cup Classic. What a generous gift to racing. I also can’t forget Jess Jackson, Barbara Banke, and Harold McCormick - owners of Rachel Alexandra – for her efforts on track this year. Perhaps Rachel was not as impressive as a 4-year-old, but racing her again this year was a wonderful sporting gesture nonetheless. As a group, owners invest more than anyone else in racing. With returns harder and harder to come by on track, owners continue to support the game mainly because they love it. A special shout out to the “Young Turks” of the Breeders’ Cup – Bobby Flay (More Than Real), Mike Repole (Uncle Mo), Kevin Plank (Shared Account) and Mansour Albaroudy (Eldaafer) who each won Breeders’ Cup races this year. Congratulations!

Breeders. You invest your hard-earned money in breeding stock to produce some of the top Thoroughbreds in the world. In spite of the toughest economy in nearly a century, you continue to try catch lightning in a bottle by breeding the best (that you can afford) to the best (that you can afford) and hoping for the best (and maybe a little profit). Special thanks to Claiborne Farm for 100 years of dedication to doing what is right by the horse. What a fitting tribute to your efforts and integrity that you were rewarded this year with a horse like Blame. Here’s to another 100 years of success there in Bourbon County, Kentucky.

Trainers. You are the “coaches” who take care of your “players” 365 days a year. There are no off-seasons or vacation days for you—not even on Thanksgiving. Occasionally you are lucky enough to bask in the glory of the winner’s circle. More often, you toil in relative obscurity. But your dedication is unequaled by anyone—except, perhaps, by the hard-working grooms and assistants who you employ.

Riders. Whether you ride in the afternoon or just in the morning, you are some of the best athletes in all of sports. You take risks every time you get a leg up. We are quick to blame you when you lose, but we too often take you for granted when you win. I am grateful that you do your jobs each day across the country. All of us in this business need to be reminded that without you, there would be no racing.

Vets. You are sometimes maligned and misunderstood, but you are the advocates for the horse. You endure long hours and bad weather to give horses some of the best care provided to animals anywhere.

Horses. It goes without saying that without you, there would be no horseracing business, period. You are not simply the “product.” You are literally the life blood of racing. You are some of the last athletes on the planet who run purely for the thrill of the effort. And we love you for it. As an industry, we owe it to you to make your safety our highest priority.

NTRA Colleagues. You are the hardest working, most dedicated, yet underappreciated people I have ever been associated with. Day in and day out, you find ways to do more for the industry despite having less money and staff to do it with. And you do it honestly and willingly because you love the business and the people who make it so great. It’s an honor to work with each and every one of you.

That’s my list. What’s on yours? Let me hear from you.

A Vote Cast For Zenyatta

aspradling — Mon, 01 Nov 2010 17:50:00 GMT

At last, it’s here. After months of anticipation, it all comes down to one day. The ads are about to run their course. The pundits and prognosticators have all had their say. The people have engaged in ways that no one could have imagined just a few short years ago. The polls have been all over the place. The arguments and rhetoric have been heated and at times very personal. The media has given the events of the day unprecedented coverage. Finally, our collective date with destiny has arrived.

I am not talking about Election Day 2010 – a day which, like the finish line for a tiring frontrunner, cannot come fast enough. I don’t know about you but one more negative political ad and my head may explode.

I am talking about the amazing race mare, Zenyatta, and her quest for perfection in the Breeders’ Cup later this week.   In case you have been living under a glacier in Antarctica for the past few weeks, at 6:45 p.m. this Saturday, November 6, at the Breeders’ Cup in Louisville, Kentucky, 14 of the best horses currently in training will be going to the post in the 27th running of the Breeders’ Cup Classic. With all due respect to the 13 other contestants, the focus of just about everyone’s attention at this year’s running of the BC Classic will be the lone female in the field.

Zenyatta, the fabulous 6-year-old race mare from California, could become only the second horse in history to win the Classic in back-to-back years. Eight others have attempted this herculean feat but only Tiznow has done it. Even more amazingly, if she wins, she will finish her career with an unprecedented 20 wins and no defeats. And that elusive Eclipse Award for Horse of the Year? It’s hers hands down if she wins.

To truly put this race in perspective, though, you have to consider all the many factors that combine to make this Saturday’s BC Classic a once in a lifetime event.

First, consider the stage – historic Churchill Downs, a highly competitive Breeders’ Cup Classic field, and an international television audience watching live on ESPN. Certainly in the United States and arguably around the globe, there is no better venue for a great horse race than Churchill Downs. In addition to being the home of Kentucky Derby, Churchill Downs has hosted virtually all of the largest and many of the most memorable Breeders’ Cup events in the Cup’s 27 year history. This weekend’s two-day extravaganza promises to be yet another record-setter. If Zenyatta is going to convince the world of her greatness, this is the best place to do it.

And since the Classic is the biggest race in America for older horses, this is definitely the race to win. The 14 horse field that she will face may be one of the best ever to contest the Breeders’ Cup Classic. Any one of a number of horses has a legitimate shot at taking home the trophy, including Quality Road, Blame and Lookin At Lucky. They all will give Zenyatta the race of her life. It will take her best effort ever to get to the wire ahead of this deep, talented field.

Keep in mind that no matter what happens on Saturday, this will be last race of Zenyatta’s long and glorious career. Truth is, Zenyatta’s connections did not have to bring her back for this year’s campaign. Owners Jerry and Ann Moss, trainer John Shirreffs, racing manager Dotty Ingordo and Jockey Mike Smith could have ended her career after last year’s Breeders’ Cup Classic victory and no one would have questioned that decision. But they kept her sharp through the end of 2009 and after carefully considering her best interests, they decided to keep her in training in 2010. It was a huge sporting gesture.

Finally, everything will be on the line for Zenyatta on Saturday. Not only would this be a second consecutive Classic victory, a perfect 20 win career, and an undisputed claim on Horse of the Year honors, but also a win this Saturday should finally silence her detractors.

A career as long and distinguished as Zenyatta’s cannot be made or lost in one race. She is a champion no matter what happens. But on this stage, against this field, at this point in her career and with so much on the line, a win this Saturday would put Zenyatta on the short list of all time greats - right up there with the likes of Secretariat and Man o’ War.

Make your plans now to watch this Saturday’s ESPN broadcast, or better yet, attend the Breeders’ Cup at Churchill Downs in person to witness what promises to be history in the making. I wasn’t alive in the early 1900’s when Man o’ War went 20 for 21. I was too young and unaware to see Secretariat capture the Triple Crown in 1973.   There is no way I’m going to miss Zenyatta’s bid for racing immortality.

How about you? Where will you be watching on Saturday? What will a Zenyatta victory mean to you?   Let me hear from you.

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Education--A Continual Process

aspradling — Wed, 20 Oct 2010 17:41:00 GMT

When we formed the NTRA Safety & Integrity Alliance almost two years ago, we knew that it needed to be as much as about education and best practice sharing as it was about accreditation. I’m proud to report that, yesterday at Keeneland, the Alliance held its inaugural Professional Education Seminar. Thanks in great measure to the cooperation of an outstanding group of presenters, our Seminar showed that not only is a continuing education program for horse racing feasible, but that it can be executed with virtually no cost to the industry through sponsorship, webcasting and the donation of time by experts whose collective wisdom was priceless.

The seminar was a one-day, continuing education event covering a wide range of topics relating to the health and safety of equine and human athletes competing in horseracing. It was a great day for learning about how to properly care for Thoroughbreds before, during, and after their careers as racehorses. It was also a great day for learning about how to protect jockeys from injury and provide the best possible medical care in the event of a racing accident.

Other areas covered included nutrition, pre-race examinations, medication and testing, trainer continuing education, when to retire a racehorse and updates on laminitis research. Attendees were treated to thoughtful presentations from the likes of Dr. James Orsini, Dr. Mick Peterson, Dr. Tom Daugherty, Dr. Mary Scollay, Dr. Rick Sams, Dr. Reid McLellan, Dr. Rob Holland of Pfizer Animal Health, and Dr. Randal Raub of Purina—people who work every day to address some of the most difficult safety and integrity challenges our industry faces.

Those who came looking for another seminar filled with industry insiders lecturing one another about all that is wrong with racing were no doubt disappointed. This was a collection of folks who were there to learn and develop their day-to-days skills in dealing with things like caring for retired racehorses, learning advances in hoof care, and sharing of best practices concerning human medical care at the track. The audience included trainers, owners, grooms, racetrack medical personnel, racetrack vets, farriers, regulators and racehorse retirement/retraining people. I saw lots of note taking and active engagement with speakers. I also saw a lot of networking as people from around the country discovered others who shared their passion or understood their challenges.

Personally, I was fascinated by the topics and speakers. It was a rare chance to hear professionals speak passionately about what is really happening in the trenches where many good, smart people tackle tough issues honestly and energetically. We don’t hear enough from this hands-on segment of our industry – the regulators, medical personnel and actual horse handlers - which is a shame because they have lots to teach us.

Best of all, thanks to the generosity of the good people at Pfizer Animal Health and Keeneland, the entire event was free of charge and open to anyone who was interested in the topics. Keeneland even helped us live stream the trainer education portion of the seminar. I was pleasantly surprised this morning to learn that the live Webcast was viewed by racetrack professionals from as far away as the Caribbean. All of the day’s courses were recorded by Keeneland staff, and they will soon be available for viewing at NTRA.com and also on DVD. If you are a trainer, track medical director, regulatory or association veterinarian, farrier, racing official, aftercare organization representative or just plain interested in one or more of the topics, and you missed this inaugural event, take a look once the tapes are up on our Website, and see what you think. Then mark your calendar for next year.

If you attended or if you have seen the agenda, tell us what you thought about the event. What worked and what didn’t? What topics would you like to see covered in our next educational seminar? Let me hear from you.

Zenyatta Buzz On Brink of Reaching New Heights

aspradling — Mon, 27 Sep 2010 19:27:00 GMT

As of Monday morning, my most recent blog post, entitled "Zenyatta Wins Again -- This Time With Oprah" http://www.ntra.com/blog/index/view/MTExOQ , has received more than 6,200 page views and elicited more than 350 comments. I want to thank you for the overwhelming response and for the passionate discussion.

Buried within the usual back and forth between Zenyatta and Rachel fans are some interesting suggestions. Several readers, including a number of passionate female horse racing fans, have already begun a campaign to encourage Oprah to dedicate an upcoming show to Zenyatta.

Suzanne suggested: Wouldn't it be nice if Oprah would give the Queen a full episode dedicated to her, her accomplishments, the Mosses and Mike Smith prior to the Breeders’ Cup? Then do an exclusive with race day footage showing everything we never get to see...It would surely be doable. Maybe if all of us e-mail her with the idea???"

That’s a great idea, Suzanne. If fact, here is a link for anyone reading this post to e-mail the producers at Oprah and suggest that Oprah pursue a show or a feature dedicated to Zenyatta and her amazing connections. I encourage each of you to send her a message right now. Let’s see if we can do for Zenyatta what friends on Facebook did to secure Betty White an appearance on Saturday Night Live last spring.

With the inclusion of Zenyatta on Oprah’s 2010 Power List, clearly Oprah and her producers have joined the legion of fans touched by this remarkable athlete. Should Oprah dedicate a show, or feature, to Zenyatta in advance of the Breeders’ Cup, millions more will be compelled and moved by her story.

A victory this Saturday in the Lady’s Secret Stakes at the Oak Tree at Hollywood Park meeting would extend Zenyatta’s perfect record to 19-for-19 and leave her one victory shy of joining Tiznow as the only two-time winner of the Breeders’ Cup Classic. By the way, the Lady’s Secret will be televised live Saturday on ESPN between two NCCA college football games at approximately 7:15 p.m. ET. The Lady’s Secret is a part of a Breeders’ Cup Challenge telecast (6:30-8 p.m. ET) on ESPN Classic and ESPN 3 which will include two other live Breeders’ Cup Challenge races from Hollywood Park.

Win or lose this weekend or next month, Zenyatta already has cemented her place in the Hall of Fame. But a victory Saturday would arguably put us on the brink of the most highly anticipated Breeders’ Cup Classic in event’s history. And wouldn’t that be the perfect time for Oprah to introduce the only four-legged member of her Power List to her worldwide audience of viewers?

Alliance Accreditation - An Idea Whose Time has Come

aspradling — Mon, 30 Aug 2010 20:39:00 GMT

Last week, it was my pleasure to participate in The Jockey Club’s annual Round Table Conference in Saratoga Springs, New York. They asked me to present to the conference concerning the role that the NTRA is playing through our Safety & Integrity Alliance to help bring about the considerable progress that the Thoroughbred racing industry is making on the welfare, safety and integrity fronts. Even though I talk a lot about the Alliance, I was grateful for the chance to explain it to the attendees because it is still new and many people even now don’t fully understand its role or purpose.

I began my remarks by referencing the pledge that is the foundation of the Alliance:

The health and safety of our human and equine athletes and the integrity of our sport are horse racing’s top priorities.

I reminded the audience that in 2008 when the Alliance was formed, the industry already had a firm grasp on many of the important reforms that needed to take place in order to raise health and safety standards for racing. What we lacked was a method for quick and timely implementation and a program that we could use to benchmark our progress. Here is where the Alliance and the accreditation process emerged as the solution.

Accreditation is common in other industries, especially health care and education. Virtually every hospital in America is highly mindful of the importance of maintaining its accredited status because the loss of accreditation means reduced federal funding, fewer patients and reduced profits. Likewise, accreditation not only assures a quality education but also provides colleges and universities with access to federal and state funding, engenders private sector confidence and eases the student transfer process.

But what is accreditation? As I explained, it is both a process and a status. It is a process in that an entity or institution is evaluated to determine whether it conforms to a set of industry-established norms or standards. The result of the process, if successful, is the awarding of accredited status.

That is why the first step in the Alliance accreditation process was the drafting of the Alliance Code of Standards. The Alliance was able to create the necessary standards by working cooperatively with a broad range of industry stakeholders using current scientific research, recognized industry “best practices,” and recommendations from industry stakeholder groups.

The 2009 Code benchmarked standards in a number of areas including equine injury reporting, pre- and post-race veterinary examinations, post-mortem examinations of catastrophically injured horses, participation in safety research, drug testing, and racehorse retirement and transition to second careers. By design, the Code is a permanent work in progress - meaning that it will be modified from time to time to reflect new research and consensus on key areas of emphasis. For example, in 2010 the Code was expanded to add wagering security protocols at the urging of horseplayers.

But establishing the Code of Standards was only half the battle.

As I stressed to those in attendance, without the awarding of accredited status to compliant tracks, the Alliance Code of Standards would be nothing more than a list of aspirations and platitudes. The Alliance grants accredited status to racetracks who don’t just talk about reform but who actually make costly but important changes to their equipment, facilities and operations and impose higher standards on participants through tough new house rules and improved regulatory oversight.

To be accredited, tracks must submit an extensive application and undergo a rigorous two-day inspection by independent veterinary, track operations and security experts to confirm full compliance with the Code of Standards in all material respects.

Today, 19 tracks racetracks comprising more than 60% of all Thoroughbred pari-mutuel handle in North America have been fully accredited. They are: Aqueduct, Arlington Park, Belmont Park, Calder, Canterbury Park, Churchill Downs, Del Mar, Delaware Park, Fair Grounds, Golden Gate Fields, Hollywood Park, Keeneland, Monmouth Park, Oak Tree, Santa Anita, Pimlico, Santa Anita, Saratoga, Sunland Park (provisional), Turfway Park and Woodbine. This is a huge step in the right direction.

Because of accreditation, tracks and regulators in numerous states are now mandating the use of cushioned riding crops. Out-of-competition testing of horses is now a reality around the country. The use of approved safety helmets and vests is now commonplace at many facilities. We are seeing a vast improvement in pre-race testing for alkalinizing substances. And almost all tracks are participating in the Equine Injury Database. Without accreditation as a catalyst, these changes might never have been implemented.

Another benefit of accreditation is the constructive engagement that occurs when tracks, horsemen and state regulators work together to adopt permanent standards in the form of new or improved regulations. But the Alliance is driving more than regulatory change. It is recognizing those in the industry who are committed to doing what is right for the horse.

To be accredited, tracks and horsemen must also help to fund new research into the causes of racing-related injuries. And last but certainly not least, accredited tracks and their horsemen are building bridges with local retirement and retraining facilities to take care of our retired racehorses.

Undoubtedly, there are still bars to be raised, higher standards to be achieved and many tracks to be accredited, but the critical point is this: Accreditation is truly an idea whose time has come.

I left the audience with these final thoughts.

We have certainly made great strides with racetrack accreditations but much work remains.   It’s true that accredited tracks have committed significant human and financial resources to do what is best for our horses, our riders, our fans and our sport. These tracks deserve to be tangibly rewarded for their efforts. Otherwise, we risk seeing some tracks continue to take the easier—and cheaper—road of ignoring safety and integrity issues in the hope that these issues will go away. I can promise you that these issues will never go away …nor should they.

Eventually, Alliance accreditation must become the gateway to governmental funding for things like safety and integrity initiatives. States will have to recognize accreditation as a basic requirement for licensure. These kinds of benefits and rewards are the very foundation of healthcare and education accreditation.

But until these broader benefits materialize, I challenged every person in that room (and you as readers) to be a part of the important effort that the Alliance has begun.

As owners and trainers, you can make a difference simply by voluntarily and independently committing to run some or all of your horses exclusively at accredited tracks.

As horseplayers, you can do the same by voluntarily and independently committing to wager a higher percentage of your bankroll on races run at accredited tracks.

With your support, we will continue to build on the successes of the past two years. Not just because it is the right thing to do, but because it is the only course of action that will ensure the long term viability of this industry that we all are so passionate about.

Thank you for your ongoing support of the Alliance.

Working for Players in Washington

cdawahare@bloodhorse.com — Sun, 27 Jun 2010 16:09:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Last week, the NTRA’s lobbying team secured introduction of important federal legislation to protect our $1.3 billion market for advance deposit wagering.
The bill, H.R. 5599, clarifies the relationship between the Wire Act, a 1961 federal criminal statute aimed at illegal bookmaking, the Interstate Horseracing Act (IHA), a civil statue passed in 1978 and amended in 2000 to permit online pari-mutuel wagering on horse races, and the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), designed to stop the use of credit cards for illegal online gambling but not our lawful, IHA-governed transactions.

It has long been settled that we are authorized to engage in interstate wagering via the IHA and that Congress, in its own words, passed the IHA to “further the horseracing and off-track betting industries in the U.S.”

But sometimes, Congress’s messages are ignored. Case in point: the Justice Department, which champions the Wire Act and UIGEA, continues to ignore the clear message that Congress sent when it passed the IHA, amended it in 2000 and exempted it from UIGEA in 2006.

Ongoing efforts by the Justice Department to confuse and obfuscate the clear authorization for our industry to conduct interstate wagering under the IHA, coupled with implementation of UIGEA regulations on June 1, have made a few credit card companies more skittish about accepting wagers from our players – hence, the introduction of H.R. 5599.

H.R. 5599 simply restates what we already know – that online wagering on horse racing is legal under the IHA, and that laws like the Wire Act and UIGEA only apply to illegal activities.

While this issue seems simple to the horseracing industry, which has operated under the IHA for more than 30 years, members of the financial services industry are still in a period of adjustment under the UIGEA regulations. H.R. 5599 is designed simply to give credit card companies as much comfort as possible so that they will continue to process our wagers.

As players increasingly place their wagers online making account wagering the most important growth area for wagering on horse racing, we have to stay alert to every potential obstacle to keeping that channel as open as possible. That’s part of what we do at the NTRA.

And that’s not all we are attempting to do for the benefit of horseplayers. Earlier this week, we quietly filed a letter with the IRS that may for the first time put an important issue on the list of priorities for the IRS – withholding on winning pari-mutuel wagers. We have been approaching this from a legislative standpoint for the past two Congresses. So we are taking a belt-and-suspenders approach and tackling the issue through regulatory channels, too.

The current rules that apply to winnings from wagering on horse racing have been in place for many years. However, they do not reflect appropriate or equitable withholding and reporting for the way most wagering is done today. Tax laws require withholding when the wagering proceeds are more than $5,000 if the amount of such proceeds is at least 300 times as large as the “amount wagered.”   This basically limits withholding to winnings on exotic bets.

The IRS has long taken the position that the “amount wagered” means that no matter how many combinations a patron bets into a pool in an attempt to have a winning ticket, only the cost of the one winning combination is considered as the amount wagered for withholding purposes. They do not take into account other wagers involving other combinations placed in that same pool which did not produce any winnings. The net effect of this position is to artificially force many payoffs above the 300/1 payoff threshold for withholding purposes.

For example, if you spent $100 to win $10,000 on the Pick-4, that’s a payoff of 100/1, which is under the withholding threshold. But the IRS says that you actually spent only $1 (assuming a minimum wager of $1 on the Pick-4) to win that $10,000 which is 10,000/1 odds. Their interpretation gives the government the right to take 25% of your winning bet, or $2,500, and hold that amount until you file your taxes after the end of the year.

No one bets a Pick-6 in one single ticket of only six picks. Players spend hundreds, if not thousands of dollars, on multiple combinations trying to win an exotic wager. Limiting the amount wagered to the single combination that happens to be the winning ticket is a legal fiction only the IRS can love.

We have asked the IRS to change the way it calculates the “amount wagered” to include the total amount wagered by the player into the pari-mutuel pool from which the proceeds of the winning wager are paid.   This will have the effect of radically reducing the number of tickets subject to IRS withholding – perhaps by as much as 80%.
Players tell us they don’t object to paying taxes on their winnings, but withholding unnecessarily punishes them by forcing them to file tax returns seeking refunds even when they lost money for the year. Adding insult to injury, many players never get the withheld amount back due to quirks in the tax filing rules including alternative minimum tax which gives the IRS license to tax income and ignore certain expenses including gambling losses.

Lately, it’s been hard to get some people in the industry to see the need for a national strategy for horse racing. We get so focused on individual or organizational challenges that we forget about the larger picture where we all can benefit from acting with a common purpose.   The NTRA's federal legislative efforts are one clear example of the benefits we all can derive from collective action.

But other opportunities for bettering our business through national cooperation and collaboration abound. Identifying and developing those opportunities - like the NHC, the Safety & Integrity Alliance and the Advantage group purchasing plan - are jobs we know well at the NTRA. Your support and ideas for further collaboration are valued and appreciated.

What are some other local problems for horsemen, tracks and fans that can best be addressed at the national level? Send me your ideas.

Pimlico's Strong Finish

cdawahare@bloodhorse.com — Tue, 11 May 2010 23:56:00 GMT

By Alex Waldrop, President and CEO of the NTRA

I have been blogging about the NTRA Safety & Integrity Alliance for almost two years now. What happened this week was some of the best Alliance news yet. Pimlico has now been fully accredited.

Why is this development such good news? Because, just prior to the 2009 running of the Preakness, Pimlico Race Course was provisionally accredited by the NTRA Safety & Integrity Alliance which meant that Pimlico met the majority of standards set forth in the Alliance Code of Standards but fell short in a few specific areas. Pimlico had to agree to a specific timetable for meeting the remainder of the standards or risk revocation of its accreditation. Since that time, Pimlico and the Maryland Racing Commission have been busy.

Last year, jockeys riding at Pimlico were not using the new cushioned riding crop. This year, through the efforts of management at the Maryland Jockey Club, riders in every race use the kinder crops. This was originally conducted under a "house rule" at the racetrack, but subsequently Pimlico petitioned the Maryland Racing Commission to pass a rule requiring use of the softer crops, which the Commission promptly accomplished.

This is exactly how it is supposed to work. Under pressure to receive accreditation, Pimlico pushed its racing commission to pass the model rule regarding riding crops, and the commission responded exactly as requested. No federal intervention. No public outcry or embarrassment. Just a good rule recommended by The Jockey Club Safety Committee, promptly implemented by the Maryland Racing Commission at the urging of Pimlico and the Alliance. Easy as pie. A virtual hand ride to the wire.

But there's more. Last year, horses racing at Pimlico were not tested for elevated levels of TC02 (also known as milk shaking) until after they had raced-which is not an ideal way to test for TCO2. This year, at the urging of Pimlico and with assistance from the Alliance and the Racing Medication and Testing Consortium (RMTC), the Maryland Racing Commission has implemented a much-preferred pre-race sampling program. You see, after studying TCO2 levels extensively, the RMTC determined that pre-race testing is superior to post-race sampling. The Racing Commissioners International (RCI) even incorporated the pre-race testing regimen recommended by the RMTC into its Model Rules. But it took the accreditation process to implement the change at the track level. As a direct result of Pimlico petitioning its racing commission for the change as required by the Alliance for accreditation, integrity has improved in Maryland.

The same is true for out-of-competition testing. Last year, there were no out-of-competition testing rules or procedures in place in the state of Maryland. Again, to move from provisional to full accreditation, Pimlico had to request that the Maryland Racing Commission adopt a rule and a testing protocol. Now an out-of-competition rule is in the process of being adopted in Maryland. The same holds true for a frozen-sample testing protocol. All because Pimlico diligently pursued full accreditation over the fall and winter months in Maryland.

In order to be fully accredited, Pimlico also had to perform an independent security assessment at its facility and create a written compliance plan. These may not sound exciting, but both help ensure that the Pimlico staff is doing everything right in order to comply with the Alliance Code of Standards during every race, every day.

Pimlico deserves to be congratulated for its achievement. Through its efforts, significant change has taken place in Maryland. And this change will not simply be enforced voluntarily, but with the force of law as administered by the State of Maryland.

So, the Maryland Racing Commission should also be congratulated for its efforts. Maryland is now aligned with the national performance enhancing drug and therapeutic medication standards as set forth in the RCI Model Rules. The Commission has also incorporated the most current safety standards into the rules and regulations in Maryland. As we often point out, tracks going through the accreditation process simply cannot succeed without the cooperation and support of their state racing commissions.

Together, Pimlico Racetrack and the Maryland Racing Commission stepped up in a big way for Maryland racing. Horsemen and fans (not to mention horses) can all be thankful for that.

Kentucky Derby Weekend Top Ten List

cdawahare@bloodhorse.com — Wed, 05 May 2010 17:05:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Kentucky Derby weekend was special this year for lots of reasons. With apologies to David Letterman, here is my list-in no particular order, I must admit-of 10 reasons why the Kentucky Derby is one of the most exceptional events in all of sports.

10. The Susan G. Komen Foundation and the many breast cancer survivors participating in the "Survivor Parade" who, for the second year in a row, helped make Kentucky Oaks day a memorable event.

9. The hard-working Churchill Downs staff and their marvelous facility, which accommodated two six-figure crowds beautifully.

8. NBC for excellent coverage on Saturday and its great cross promotional efforts leading up to the big day.

7. Mother Nature for parting the clouds at just the right moment for the singing of My Old Kentucky Home.

6. Track Superintendent Butch Lehr and other Churchill Downs racing officials who showed why Churchill is fully deserving of its NTRA Safety & Integrity Alliance accreditation by giving us two days of safe, fair racing despite challenging weather conditions.

5. Todd Pletcher, who finally got his first Derby win. I don't think it will be long until his second such victory.

4. Calvin Borel, whose patented rail skimming ride proved to be the difference-yet again.

3. Super Saver, for peaking when it mattered most and running the race of his life against a full, competitive field of 3-year-olds.

2. Super Saver's owners/breeders Kenny Troutt and Bill Casner and their excellent WinStar Farm team including Doug Cauthen and Elliott Walden for putting their heart and soul into a business that doesn't always reward or appreciate good guys like them.

1. The City of Louisville and its community leaders, media and public safety personnel, and citizens whose largely unsung support and hospitality over many years are a prime reason why the Kentucky Derby is the phenomenal event that it is.

That's my list. Who or what would you add to it?

Derby Day Connections

cdawahare@bloodhorse.com — Tue, 27 Apr 2010 13:29:00 GMT

By Alex Waldrop, President and CEO of the NTRA

If you read my blogs, you know that I spent more than 12 years as part of the management team at Churchill Downs. During those years, I held several titles including President of the racetrack that shares its name with Churchill Downs Incorporated. It was my privilege to view the Kentucky Derby from almost every angle imaginable – both literal and figurative. I watched the race from the roof top and from the infield. I kept an eye on the mutuel and concession lines. I closely examined the financial statements for ever-more creative ways to secure new forms of revenue from the event. I especially loved the sight of the Twin Spires from the backstretch (even after the renovations).

But the part of the Kentucky Derby that I observed most intently was the emotional bond that the event created with almost everyone in attendance or watching on national television. Ask anyone who has just attended his or her first Derby and you are likely to get an earful of superlatives. And native Louisvillians, who tend to act as though they are annoyed by much of the Derby hype, will always find a way to partake in the festivities somehow, someway. Why else would 700,000 people show up for a fireworks display on the River City’s riverfront at the start of the Kentucky Derby Festival every year. Even curmudgeonly old race trackers will shed a tear while drinking sugary Mint Juleps and singing the sentimental “My Old Kentucky Home” (Not me, of course).

It’s hard to explain the hold that the Kentucky Derby has on people, regardless of their age or station in life. From the college kid in the infield, to the well-to-do captain of industry watching from the finest finish line suite; each is captivated and enthralled in some mysterious way. Perhaps it’s because so many of those on Millionaire’s Row can tell you a story about their first Derby experience – usually as a college kid in the infield. Perhaps it’s because many of those first timers in the infield secretly vow to themselves that someday they will actually be able to see the race from one of those fancy clubhouse suites on Millionaire’s Row. Or perhaps it’s the way those 20-horse fields can humble even the most studied handicappers while briefly making geniuses of novices betting nothing but names and colors. No doubt, that’s why Col. Matt Winn, the father of the Kentucky Derby, referred to the gathered throng on the First Saturday in May in his memoir entitled “Down the Stretch” as “the fun-loving, ever democratic Derby Day crowd.”

Winn understood long ago that to become America’s race, the Derby had to appeal broadly to men and women, young and old, rich and poor. And so it is that Winn, with a promotional fervor the likes of which we may never see again, willed the Kentucky Derby into its status as the world’s greatest horse race. In large part because of Winn, no other American sporting event has the history or the appeal of the Derby. The Super Bowl draws a bigger television audience for sure. The Final Four captivates hoops fans who love the drama of the Big Dance. But the Derby – with its magnificent equine athletes and a big, multifarious crowd like no other sporting crowd in America - goes deeper and touches more profoundly. And it just seems to grow with each passing year.

Why does it connect to its audience so magically? Once again, Col. Winn has one of the best explanations I have ever read. In his memoir quoting Kentuckian Ervin S. Cobb on the subject of the allure of the Derby, here is what Winn had to say:

“It is not horses alone that are running at Churchill Downs on that spring day every year. Tradition, by-gone romance, dimmed, echoing poetry, the ghosts of ancient glories, and ancient ideals and ancient horses – they’re all there, speeding down the homestretch and past the grandstand, and on into the sunset’s gilded afterglow of vanished yesterdays.”

I tip my hat to Col. Winn and to his era – an era that reemerges for a few fleeting moments each year in Kentucky on the first Saturday in May. May it always be so.

What about you? Why is it about the Kentucky Derby that captivates you?

Are the Clouds Parting?

cdawahare@bloodhorse.com — Wed, 07 Apr 2010 13:38:00 GMT

By Alex Waldrop, President and CEO of the NTRA

The release by Equibase of Thoroughbred Racing's Economic Indicators for the first Quarter of 2010 was no cause for celebration. We continue to see declines in handle - about 10% so far this year when measured against 2009. And purses declined about 10% so far this year vs. last year and the decline is steeper this year than last when purses dropped "only" 5.7%. So, at first blush, it looks like we are continuing to see steep declines even though the broader economy is showing some signs of recovery.

But I think it is necessary to consider one more number included in the Equibase release - the decline in the number of races run so far this year. You see, inclement weather and a reduction in racing dates at in key markets resulted in a 9% decline in races so far this year when compared to last. It is possible (though hard to prove) that the handle and purse declines so far in 2010 are largely a function of fewer wagering opportunities for horseplayers-that in real terms, we are about even with where we were at this time last year.

What this may mean for racing is that the declines we have been seeing for the last three years may have bottomed out.

Similar signs are evident in other parts of the business. Keeneland's April Two-Year-Olds in Training Sale saw increases in the number of horses sold, gross receipts and median price (up almost 15%) while the buy-back rate decreased 16%. OBS' March sale and Fasig-Tipton's Calder sale showed similar results - nothing earth shattering, but a break from the steady declines of the past few years. And betting was up 22% on the Dubai World Cup program as compared to last year, and by 9% for the Dubai International Racing Carnival even though the Carnival consisted of one less day this year than in 2009. Factoring in the one day less of racing, Carnival handle grew by 17% per day.

Here in the office, our NTRA Advantage program is seeing significant increases in sales for the first time in more than two years as more and more people rely on the savings offered to NTRA members by industry partners like John Deere, Sherwin-Williams, Office Depot and UPS.

The broader economy is likewise beginning to level off. The most recent jobless numbers are showing signs of stabilizing for the first time in more than three years. According to the U.S. Bureau of Labor Statistics, while the jobless rate has stabilized at 9.7%, 162,000 jobs were added to the U.S. economy in March. At this point in 2009, we had already lost more than 2 million jobs nationally. And housing prices seem to be stabilizing. These broader numbers are, likewise, nothing to cheer about, but they provide hope that things are looking up.

Whether we're talking about owners, breeders or bettors, so much of our industry's financial vitality is predicated on the availability of discretionary income. Perhaps a few rays of springtime sunshine are finally peaking through the dark clouds of a long, difficult winter for many in this country - and this business.

Role of the NTRA – Part II – Charitable Support

cdawahare@bloodhorse.com — Mon, 29 Mar 2010 18:19:00 GMT

By Alex Waldrop, President and CEO of the NTRA

This entry is Part II of my focus on a recent query from one of my readers asking me to explain to those "on the horse side" of the business, "What is the role of NTRA - what can NTRA realistically accomplish week to week?" I usually try to avoid using this space solely to promote the NTRA, but it is a fact that the NTRA's areas of focus are so diverse that it's hard for people "on the horse side" to see the full spectrum of what we do.

One area where our efforts are particularly valuable to horse people is our charitable activities through NTRA Charities. NTRA Charities is a 501(c) (3) organization founded in 1999 to promote and support national charitable organizations with a significant presence in Thoroughbred communities as well as charities within the Thoroughbred industry. Over the last decade, it has distributed millions of dollars to support organizations and causes that have included Ronald McDonald House Charities, families of victims of 9/11 and literally dozens of industry-related charitable endeavors.

Beginning with a gift by Thoroughbred Charities of America, NTRA Charities has become a national charity for racing. It helps individuals in the communities that are home to racing and serves as a rallying point for our industry by helping build awareness of our sport's charitable giving.

In 2001, the NTRA Charities - New York Heroes Fund, Breeders' Cup Limited, and the New York Racing Association jointly raised nearly $5 million for families affected by 9/11. Funds from the Heroes Fund supported aid for families of the Twin Towers first-responders and many other programs. No other sport came close to matching racing's contributions.

While the Heroes Fund didn't directly benefit horsemen, it did send the clear message that racing's people are compassionate and generous. It also demonstrated the importance of having a national charity like NTRA Charities - one that could appeal to racing's global audience of industry participants and fans.

So when Hurricanes Katrina and Rita devastated the Gulf Coast, NTRA Charities formed the NTRA Charities - Racing to the Rescue Fund to aid affected horsemen. Again, our members and racing fans responded, hosting charity events at racetracks and joining to help their fellow horse people.

A few years ago, when more than 50 permanently disabled jockeys were suddenly in danger of losing their much needed financial assistance, NTRA Charities stepped in to oversee the NTRA Charities - Permanently Disabled Jockeys Fund to raise and disburse funds and serve as a trusted partner to the horsemen, racetracks and fellow jockeys who responded to the riders' plight. Today, thanks in part to NTRA Charities, the Permanently Disabled Jockeys Fund is a successful, stand-alone charity with its own Board of Directors.

Just days after I joined the NTRA and just hours after Barbaro's death from laminitis in 2007, NTRA Charities created the NTRA Charities - Barbaro Memorial Fund. The Barbaro Memorial Fund has distributed some $400,000 to fund important laminitis research projects - projects that may well have gone unfunded or underfunded but for our efforts. Horse people can surely understand the benefit of that research.

Most recently, the NTRA announced the formation of the Barbaro Fund for Equine Health and Safety Research which will replace the NTRA Charities - Barbaro Memorial Fund. This new fund will become the primary fundraising arm of the NTRA Safety and Integrity Alliance for equine health and safety research.

And then there is the issue of aftercare for our equine athletes. The NTRA has made equine retirement one of the pillars of the NTRA Safety and Integrity Alliance. We think it's essential that all segments of the Thoroughbred industry work together to address equine retirement as part of the life cycle of the horse and our daily business as horse people. NTRA Charities will most assuredly play a key role in this aspect of Alliance activities.

There is so much we do for horse people - addressing racing's safety and integrity challenges (next week) and improving racing's economics through better marketing and promotions (week after that). But NTRA Charities is a key part of our strategy to solidify racing's position as a major sport-and one with a big heart for its participants, both equine and human.

What else should NTRA Charities be doing? How best can it serve the industry's interests?

The Role of the NTRA - Part 1

cdawahare@bloodhorse.com — Sun, 07 Mar 2010 13:42:00 GMT

One of the very few things I don't like about writing these blogs is that I don't have nearly enough time to respond to as many of your interesting comments as I'd like. But this week, I want to focus on a recent query from one of my readers asking me to explain to those "on the horse side" of the business, "What is the role of NTRA - what can NTRA realistically accomplish week to week?"

First, the NTRA is different from racing's so-called "alphabet soup" groups, each of which is a traditional (and valuable) trade association representing a single group of similarly situated organizations and/or people. For instance, the HBPA is made up of trainers and owners. The TRA consists entirely of race tracks. TOBA represents owners and breeders. The NTRA is an amalgam of almost every constituency in horseracing. Our Board of Directors consists of an equal number of horsemen (owners, breeders, trainers and sales companies) and tracks (including CDI, MEC, NYRA, Keeneland and regionally elected track reps). The strength of the NTRA is its inclusiveness.

That inclusiveness can also make it difficult to act because doing so requires a consensus among all the constituencies. In that respect, the NTRA is more like a legislative body than a trade association because we have to consider multiple points of view when we act. Some in our business feel that "consensus" is a four letter word and push for a more autocratic model like a "league" with a "commissioner." Truth is, sports leagues and commissioners are consensus-driven as well. They just have fewer constituencies to lead. This is why many of the well-intentioned suggestions about leagues, commissioners, czars and the like in racing are extremely difficult to implement effectively.

In spite of the challenges, the NTRA does a lot that affects "the horse side" on a daily basis, and I will be sharing some insights with you over the next few weeks in a series of blogs. Perhaps the most important way we impact the horse industry is through our work in Washington, D.C. Precisely because of our broad-based constituency, we are the kind of group that federal lawmakers like to hear from. They want one point of contact and clear guidance from the industry. The NTRA is able to provide that and, as a consequence, we are recognized as the voice of the Thoroughbred racing industry. Speaking with a clear, strong voice on behalf of our stakeholders, we have secured passage of legislation protecting horse racing's right to conduct Internet wagering (which supports purses for horsemen), and legislation to shorten the depreciation schedule for young horses (which makes horse ownership more affordable). In a town where thousands of bills are introduced annually and only a few hundred are ever passed, we have a remarkable track record.

Supporting all of these federal efforts is the NTRA's political action committee known as Horse PAC, which has raised and contributed some $2 million to federal candidates since 2003. Few in our industry are aware of the fact that ours is one of the largest gaming/wagering political action committees in the country. PAC money does not buy influence or guarantee any outcome, but it is a vitally important lobbying tool.

Equally important is the NTRA's ¼ percent Check-Off program, which raises money to fund our federal lobbying. The Check-Off Program lets horse buyers, sellers and consigners at Keeneland, Fasig-Tipton, OBS and Barretts contribute directly to the NTRA's lobbying fund. The sales companies themselves join in, with more the $1 million raised annually to fund our legislative efforts on Capitol Hill.

What is the NTRA doing now on Capitol Hill that affects you? Plenty. We are working to delay implementation of the regulations associated with the Unlawful Internet Gambling Enforcement Act (UIGEA). Simply put, the regulations can negatively affect the ability of horseplayers to fund their advance deposit wagering accounts. A $1.3 billion market is at risk. So are the thousands of online horseplayers and the hundreds of thousands of purse dollars that Internet wagering brings to our sport. Fans and revenues are two things our industry can't afford to lose.

We also drafted and found sponsors for the Pace Act to eliminate the automatic federal tax withholding on winning wagers. Again, this puts more money in the hands of our horseplayers who in turn wager more, which pushes purses for owners higher. We founded the Horseplayers' Coalition, made up of NHC Tour participants and other horseplayers, to help push this bill and other player issues in Washington.

To sum up, effective political advocacy has three main ingredients: consensus, preparedness and opportunity. We start with issues that the industry fully supports. We work diligently to research and draft legislation, meet with lawmakers and their vehicle that can pass through Congress. Our legislative staff, attend political fundraisers and then identify an appropriate legislative team is constantly building relationships with those who understand our industry's issues while it looks for legislative opportunities, which ebb and flow daily in Washington.

Occasionally, we have issues that are so complex, divisive and far-reaching that there's no industry consensus on them. In those instances, we turn to alternative solutions such as public policy, industry programs like the NTRA Safety and Integrity Alliance, and NTRA Charities. Why? Because our success in the political arena depends first and foremost on consensus. In the absence of agreement, we can't - and shouldn't - expect Congress to solve our problems for us. Fortunately, the NTRA is equipped to provide industry-based solutions, too.

I will discuss the work of NTRA Charities in more detail next week in Part II of this series. Part III will cover our Safety & Integrity Alliance, and Part IV will highlight the NTRA's marketing and promotions.

Speaking (and Listening) to the Future

cdawahare@bloodhorse.com — Wed, 24 Feb 2010 18:16:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Last week in Tucson, I got the chance to speak to another group of engaging young people preparing for careers in the racing industry as part of the University of Arizona Race Track Industry Program's Joe Hirsch Speaker Series. Interacting with young people about industry issues is always interesting, but in times like these, it is also a balancing act. I want to encourage their interest, but I also feel obligated to give them an honest assessment of the challenges that we face.

I spoke to three classes for a total of almost six hours over the course of two days. It was a great chance to talk about the future of our business and also listen to the perspectives of individuals questioning the long term health and viability of our industry for professional and personal reasons. Here is some of what we discussed.

First, we candidly discussed external threats to the horse racing business, including a severally damaged economy (nationally, one out of five working aged men are unemployed) and the spread of competition for the gambling dollar. (Native American gaming has now surpassed commercial gaming nationally.) We also talked about internal weaknesses in our business model such as excessive state economic regulation and taxation, a simulcast pricing model that in some cases favors distributors over producers and a takeout rate that big players think is too high.. We also discussed the challenges presented by safety and integrity concerns associated with horse racing.

But it all became real during one of my lectures when a student had the courage to ask the burning question on the minds of many of his fellow classmates, "Where will this industry be in five years?" In other words, I surmised, "Am I studying for a career in the wrong field?"

In response, I cited the many strengths of horse racing. I referenced a recent Harris poll which echoed NTRA polling in showing that horseracing is still one of the 10 most popular sports in the nation. I cautioned the students against believing the naysayers who proclaim that racing is "dying." As I explained to the students, industry insiders can be very negative on horseracing for a variety of reasons, but the public still loves horse racing and views it as an exciting, challenging sport. ( I cited the anticipated Rachel vs. Zenyatta matchup as just the latest example of this.) We also have a solid number of core fans who are passionate about our game/sport, and clearly they want to help the industry find its way out of its current economic challenges. Like so many other sports and industries, our challenge is to find the right business model for the future.

To that end, I walked them through the NTRA's Web 2.0 marketing strategy. I explained that several factors led the NTRA to completely rethink its approach to marketing in the future. First among these is the real need for reform in our business, especially in the areas of safety and integrity. Couple this need for reform with both the ever shrinking availability of mainstream media coverage for any sport, not just horse racing, and dwindling advertising and sponsorship dollars and you have a recipe for problems not just for horseracing but throughout the sports marketing world. Even the seemingly invincible NASCAR is experiencing a serious decline in revenues in this environment.

Against this backdrop, the NTRA is championing new strategies using the Internet to create channels to interact directly with fans. We are partnering with fans to develop meaningful reforms such as the NTRA Safety & Integrity Alliance, and we are empowering fans to help execute reform and marketing plans - peer to peer, bottom up rather than mass media and top down. This is the essence of any effective Web 2.0 strategy.

To support this Web 2.0 strategy, we are employing our Washington D.C. -based public affairs team to protect and grow the right of horseracing to conduct legal, regulated online wagering on our sport. This unique wagering platform is a key to securing horseracing's economic future and our ability to adapt to the changing media environment. It is the one area of our business that continues to grow in spite of the economy.

To solidify our fan base which is increasingly moving online, we have to become more accessible, collaborative, and open to change. Web-savvy fans value social media. They are passionate, and they want to help. But as an industry, we have to listen and respond. That is why I write this blog (almost) weekly. Blogging is a vehicle to engage in the ‘give and take' so necessary to reach fans where they live. Facebook, MySpace, Twitter and other social media are also a big part of our marketing future.

And online polling will continue to provide us with the knowledge and input so necessary for good decision making. At the NTRA, no decisions are made these days without input from, or consultation with, fans--including horseplayers.

Is it our only marketing strategy? No, there is still the always important live racing environment where most new fans are created. But it's Web 2.0 that will help move a new generation from casual to core fans.

Where will we be as an industry in five years? Well, as I told the students, businesses that are unable to transition to a business model that successfully incorporates the Internet may not survive - think music and video stores and daily newspapers. Fortunately, horse racing has the business model to make this transition and the early steps look promising. We have the product, we have the fans, we have the online wagering data and platforms and we have the Web 2.0 strategy to succeed. It's up to us to execute on that strategy to secure our future. I remain confident that we can and we will survive and prosper in this changing environment.

How about you? Where do you think racing will be in five years?

New York Racing - A National Perspective

cdawahare@bloodhorse.com — Tue, 09 Feb 2010 13:53:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Last week, I was invited to speak to a panel of New York state lawmakers. The hearing was called for the purpose of investigating the viability of thoroughbred racing in New York State and to compare it to the performance of racing enterprises in other states. My role was to offer a national perspective on the challenges facing New York racing. Of course, New York is not the only state facing challenges, but due to its size and scale, New York's challenges are, to a large extent, the industry's challenges.

First, I explained that the quality of New York racing is as good as any racing in the United States. New York leads the nation in Grade I Thoroughbred races (38), and it is second to California in total number of graded stakes (133 to 109). In fact, New York accounts for 23% of all Thoroughbred graded stakes in the U.S.

Legislators seemed surprised to learn that the New York racing industry supports 17,000 jobs and generates a $1.4 billion economic impact. They clearly did not understand that New York bettors account for almost 20% of total nationwide handle or that New York Thoroughbred racing ranks second nationally with total purses paid of $133 million. Even I was surprised when my research uncovered the fact that if NYRA and its three tracks were an MLB franchise, its annual purse distribution of $113 million would put it ahead of all but six MLB franchises in terms of "payroll" paid to its "players."

So much for the good news.

I then addressed the business environment for the gambling industry in general in New York. I explained to the assembly that the great recession has hit the gambling industry hard. In Atlantic City, revenues are down 25 percent since 2006. National racing handle was down nearly 10 percent in 2009 to $12.3 billion, its lowest level in 12 years. New York racing also competes in the Northeastern United States which is saturated with other forms of gambling. Foxwoods and Mohegan Sun, both located in Connecticut within easy driving distance of the NYRA tracks, are two of the largest and most successful Native American casinos in the world. Pennsylvania now boasts 25,000 slot machines in multiple facilities statewide. Then there are the four in-state Native American casinos against which New York racing competes. And New York also has eight racinos located across the state at all but NYRA's tracks. Undeniably, the days of NYRA receiving a state-sanctioned monopoly on gambling are long, long gone.

The tax environment for New York racing is worse. In 2007, New York racing paid more than $112 million in excise taxes to state and local governments. That is 35% of ALL the revenue paid to ALL the governments in all 38 racing jurisdictions combined. New York racing's effective pari-mutuel excise tax rate is an eye-popping 3.89%. Assuming a blended New York state takeout rate of 20% (set by state law), this excise tax rate is the equivalent of a 19% sales tax on every dollar wagered on New York racing. It is even worse at New York State OTBs where they charge an additional 5% surcharge on winning bets. That puts the "sales tax" rate at nearly 25 cents on the dollar for OTB patrons.

What's worse if you are a bettor is that these excise taxes get passed along to you in the form of higher takeout-which depresses wagering on New York racing even further. At a time when racetracks need to be lowering takeout, New York racing and its horseplayers are crippled by a punishing state tax burden.

As if all of this wasn't enough, racing in New York must compete with the New York OTB system, the nation's largest off-track betting operation. This antiquated dichotomy pits producer against distributor and leads to an acrimonious atmosphere that is toxic to racing and to the way it is viewed by the larger public. New York is the only state where such direct competition for patrons exists. It is inefficient at best and generally siphons off much-needed revenues from racing (locally and nationally). It also leaves producers like NYRA unable to control the way its racing is presented in its local market. For this reason among others, the New York model is widely viewed as an industry "worst practice." It is no accident that no state has copied the New York model since it was instituted in the early 1970s.

But wait, it gets worse. New York also presents a daunting legislative and regulatory environment. A recent report of the Task Force on the Future of Off-Track Betting in New York State recommends a variety of legislative changes, including changes that would effectively set prices for the simulcasting importers/exporters and the ADW providers operating in New York. This is an area that should be left alone. The horse industry looks to state government to strongly and efficiently regulate safety and integrity matters like pre-race examinations of horses and post race drug testing. When governments veer into economic regulation of our business, negative consequences for racing usually occur. NYRA and the state's horsemen are better situated than government to determine the optimal economic conditions for the industry. New York racing needs market-determined prices, not government imposed tariffs.

My recommendations for New York racing were the following:

Lower excise tax rate on pari-mutuel wagering;

Reorganize OTBs and tracks to minimize inefficiency and destructive competition and put the producers (horsemen and tracks) in control of distribution in-state;

Move forward with the Aqueduct racino as soon as possible;

Incentivize capital investment at the racetracks;

Aggressively regulate safety and integrity; and

Stop regulating racing's economics including takeout - that is not a proper role for government.

Those were my recommendations. What did I omit? Let me hear from you.

Thoughts From the NHC

cdawahare@bloodhorse.com — Mon, 01 Feb 2010 00:04:00 GMT

By Alex Waldrop, President and CEO of the NTRA

I just spent a fascinating two days at the Daily Racing Form/NTRA National Handicapping Championship at the Red Rock Resort, Spa and Casino in Las Vegas.

I met scores of dedicated, loyal horseplayers and talked to many about "the game" and what they believe horse racing needs to do to compete in the current environment. Here are my initial thoughts and impressions from the experience.

First and foremost, horseplayers are passionate, knowledgeable supporters of the horse racing industry whose voices (and accomplishments) are too often overlooked or ignored. That needs to change. Here is what they are saying.

- Their message to tracks: Price matters. They want the NTRA to find a way to eliminate or minimize federal withholding on winning wagers because withholding directly affects the amount they can wager. And our takeout rate is generally too high. According to one very knowledgeable race and sports book operator I spoke with in Vegas, they are seeing a steady migration of players from horse racing to sports betting and other gaming. Why? Lower takeout on casino games and sports betting are a big part of the reason.

- Their message to trainers: Safety and integrity matter. If you think the way you treat your horse is a private matter between you and your vet, think again. Players want a fair game and they resent horsemen who seem determined to bend the rules where drugs and medications are concerned. Bad horsemanship hurts the horse and the game.

- Their message to owners: Run your horses. Keep them in training. Horseplayers want full, competitive fields regardless of class or grade. They love to bet horses, especially when they have a chance to cash a big ticket.

- Their message to regulators: Be tough but fair in regulating the game. And be consistent. Explain why you are fining or suspending licensees. As one player told me, "It's not so much that punishment lacks severity. It's the lack of consistency, state to state."

Nothing will eliminate negative industry and societal stereotypes of horseplayers like a trip to the NHC. A room full of men and women, including young people and professionals, all totally focused on winning the $500,000 grand prize, was a sight to behold. It was one of the most positive racing experiences I have had in years.

The NHC started 11 years ago with a $100,000 grand prize. This year there were more than 100 qualifying tournaments and a total of more than 100,000 contestants vying for the 300 coveted NHC spots. Competition was fierce. No wonder. In the past week, we have distributed more than $1.1 million in prize money, including $500,000 to winner Brian Troop. Brian is an accountant from Ontario, Canada. He's an avid NHC Tour player who qualified at Turfway Park. Like the 10 NHC Champions before him, I have no doubt that he will be a terrific ambassador for our game over the next 12 months.

The NTRA is determined to continue growing the NHC. It will take broad industry support from tracks, horsemen, regulators and others to take it to the next level. Player input is also a key part of the process. Our NHC Players Committee is up to the challenge.

We are going to grow the NHC. It's going to happen. Everyone involved in racing should support the NHC The players deserve it. The industry needs it. Let's get it done.

Handicappers Take Center Stage

cdawahare@bloodhorse.com — Tue, 26 Jan 2010 19:04:00 GMT

By Alex Waldrop, President and CEO of the NTRA

This is a big week for some of racing's most devoted followers. On Friday and Saturday, some 300 horse players will compete in the 11th Daily Racing Form/NTRA National Handicapping Championship at Red Rock Resort, Casino and Spa in Las Vegas. The stakes are high and I am told the format grueling, with players required to place mythical win and place wagers on 30 races over the course of two days.

The winner will walk away with $500,000 and be honored at next year's Eclipse Awards as the National Handicapping Champion. Defending champ John Conte, the pride of Brooklyn who energized the audience with his hilarious acceptance speech at last week's Eclipse Awards, is among seven past champions who will be on hand to compete for nearly $1,000,000 in prize money.

I'll be attending the NHC and look forward to meeting many of the qualifiers. As the 100,000 or so tourney players who participated in 2009 know all too well, just getting into the NHC is quite a feat. You see, you can't buy a seat at the National Handicapping Championship, you have to earn one by qualifying in one of more than 100 on-site and online tournaments conducted by NTRA member organization's over the course of the year.

Today marks the beginning of sign-ups for the 2010 NHC Tour, with feedback from more than 3,000 customers and fans leading to several changes designed to broaden participation among horseplayers. In addition to competing for money and nearly 30 spots in next year's National Championship, Tour members get free entry into five online tourneys held over the course of the year. Tour members also qualify for industry discounts from NTRA Advantage partners, plus they receive membership in the Horseplayers' Coalition, a grass roots organization mobilized to support player-friendly federal legislative initiatives on Capitol Hill.

In reviewing the bios of some of this year's NHC qualifiers, I was taken by the diverse backgrounds of the individuals descending upon the Red Rock. In many ways, the NHC field is representative of the eclectic group of people that visit racetracks and off-track betting facilities from coast-to-coast every day of the year. Qualifiers consist of 27 females, including 2001 NHC winner Judy Wagner. The youngest player is 24-year-old college student Andy Pham. The oldest is 84-year-old Gerard Oberle, who was on hand to watch Seabiscuit win the 1942 Massachusetts Handicap at Suffolk Downs.

The field includes Hollywood screenwriter Eric Roth, who in 1994 won an Oscar for best adapted screenplay for the movie Forrest Gump. In addition to the usual array of professionals, this year's qualifiers include a logger, a funeral home owner, a nuclear power plant employee (no, Homer Simpson didn't qualify), and a pilot. Rounding out the field will, of course, be a host of professional gamblers.

No one will have more at stake this week than New Orleans native Bryan Wagner, who collected $100,000 for winning the 2009 NHC Tour. Bryan will collect a $2 million bonus in addition to the $500,000 first prize if he can win the NHC. The aforementioned Judy Wagner is Bryan's wife, and she collected $37,500 for tying for second-place in the NHC Tour. That's an unprecedented feat, and a win by either this weekend would cement the Wagners as the first couple of the NHC. With New Orleans in the Super Bowl, perhaps this is the year that the Saints -- or in this case, Bryan or Judy -- come marching home in front of the NHC pack.

Horse players occasionally describe themselves as the neglected and long suffering participants in Thoroughbred racing. That experience is changing. Tracks, horsemen and even progressive state governments, wrestling with a tough economy and expanding competition, are starting to recognize horse players as the economic engine sustaining our business. The NHC is an outgrowth of that changing perspective, where players are not only rewarded for picking winners but also celebrated as champions.

Best of luck to all of the NHC qualifiers. And for those of you who have never experienced tourney play, check out the NHC Tour web pages on NTRA.com. As thousands of others can attest, you may find that tourney play is yet another appealing way to enjoy Thoroughbred racing.

Rachel Alexandra vs. Zenyatta--Act II

cdawahare@bloodhorse.com — Wed, 20 Jan 2010 17:22:00 GMT

By Alex Waldrop, President and CEO of the NTRA

As we all know by now, Rachel Alexandra received the Eclipse Award as 2009 Horse of the Year Monday night in Beverly Hills. Thus ended a nearly three-month long debate between two passionate camps. One group of fans favored Rachel Alexandra, the talented, precocious filly with eight wins in 2009 including the Preakness Stakes and Woodward, and the other backed Zenyatta, the amazing undefeated mare from California who became the first female to win the Breeders Cup Classic. It was clearly a disappointment to the mostly California audience in attendance at the Eclipse Awards, but few could argue that Rachel Alexandra was undeserving after a historic campaign and body of work that included those eight wins from eight starts by a combined 65-lengths.

The best part of the evening, however, was knowing that no matter how the vote turned out, we would see both of these remarkable athletes continue their racing campaigns in 2010. You see, two days before the Awards dinner, Zenyatta's incredibly sporting owners, Ann & Jerry Moss, announced that Zenyatta would not retire but in fact would race as a 6-year-old in 2010. What a gift to our business. Jess Jackson has always said his intention was to race Rachel this year as a 4-year-old - another sporting gesture not unlike Jackson's decision to race Curlin as a 4-year-old the year before last.

After years of watching our stars cut their racing careers short as owners understandably pursued lucrative breeding and stallion syndication deals, it's a breath of fresh air to have Zenyatta and Rachel Alexandra both back for another year. The intersection of these two dynamic careers may well give us one of the classic rivalries of all time. Think Affirmed/Alydar or Sunday Silence/Easy Goer.

We will be meeting with the connections soon to gauge their interest in facing each other in one or more races over the coming months. Of course, all of us would love to see a match-up between Zenyatta and Rachel Alexandra sooner rather than later. However, we also need to remind ourselves that they are animals, not humans. Their health and wellbeing will ultimately be the deciding factors in when and where they next compete. And, that's exactly how it should be.

But even after this week's memorable Eclipse Awards ceremony, I believe It is everyone's strong preference that the 2010 debate about who is the better racehorse be decided not in the ballot boxes, but on the race track.

Price Wars

Blood-Horse Staff — Fri, 08 Jan 2010 17:26:00 GMT

If you follow horse racing closely, you are no doubt aware that a large number of Mid-Atlantic racetracks and OTBs are being denied the right to offer simulcast wagering on races run at Gulfstream Park in South Florida, Fair Grounds in New Orleans and Santa Anita Park in Southern California -- three prime winter racetracks. Basically, the two sides have failed to reach agreement concerning the rate to be paid to the three tracks for wagers placed on their races at certain facilities located on the Eastern Seaboard. The dispute is a familiar one to tracks and horsemen. It also is familiar—and maddening—to our fans.

Frequently, I hear from horseplayers who are infuriated by their inability to bet on certain racetracks due to these disagreements between industry players. Some fans clearly believe it is my job as the head of the NTRA to force or negotiate a resolution of these disputes so that wagering can continue unabated. It is occasionally suggested by fans that I have neither the backbone nor the intellect to fix the problem. You can debate whether I possess the necessary guts or brains for my job but one thing is for sure – the economic forces driving these disputes defy quick resolutions or easy answers.

You see, the reason for these disputes is almost always the same. Racetracks, because they spend millions to operate live racing venues, and horsemen, because they understandably need higher purses to cover at least a portion of the costs associated with owning, training and racing their horses, all want a larger share of the fees derived from wagering at remote distribution outlets such as other tracks, ADWs and OTBs. But distributor tracks, OTBs and ADWs likewise have costs associated with their operations leading to their desire for a significant share of the fees. In the end, these are market-driven decisions that only the affected parties can resolve for themselves and external threats or attempts at coercion are unlikely to achieve a different or more timely result.

Racing is not alone in its struggle to adequately price its product. The news media is full of stories about price battles between TV channels like the Food Network and Home and Garden TV (HGTV) and cable service providers like Cablevision. Just this week, 3.1 million Cablevision subscribers in New York, New Jersey and Connecticut have been denied access to celebrity Chef and noted Thoroughbred owner Bobby Flay and “Design Star.” At issue is the price Cablevision will pay to Scripps (owner of the Food Network and HGTV) for the right to distribute those channels. Scripps says it costs money to produce these channels (sound familiar?), and it is demanding an undisclosed increase in fees. Cablevision says they are demanding too much. Scripps even took out a full page ad in the New York Times apologizing for the interruption but also urging fans to contact Cablevision and let their views be heard.

Similar disputes have erupted between networks like Fox and cable service providers such as Time Warner Cable with price being central to the dispute. Networks that traditionally relied primarily on ad sales to cover production costs are jealous of the cable TV industry revenue model which allows cable service providers to derive revenue from subscriber fees in addition to ad sales. As ad sales decline, networks and their local affiliates are no longer willing to provide their content to cable companies for free and instead are now demanding a share of the subscriber fees. Look for these media battles to continue and to grow in intensity as Internet distribution platforms expand and offer yet another form of competition.

So, if you’re a fan, you’re probably thinking to yourself, “I don’t care about revenue models or costs of production. I just want to bet Gulfstream Park.” And you’re right. Industry problems should never be shouldered by our customers. Yes, it’s true that it is a very difficult marketplace right now. And in this environment, it is not easy for content providers and distributors to find common ground on pricing issues. Nonetheless, we need to resolve our pricing disputes as quickly as possible or be prepared to suffer the consequences when customers look elsewhere for new content or different ways to spend their money.

Wishes for the Decade Ahead

cdawahare@bloodhorse.com — Tue, 29 Dec 2009 15:29:00 GMT

By Alex Waldrop, President and CEO of the NTRA

It's the time of year when people like to make a wish list for the upcoming 12 months. We are on the verge, though, of completing not just another year, but a full decade. So in that spirit, here's my list of wishes for the Thoroughbred industry in the 2010s.

More stars like Rachel Alexandra and Zenyatta;

Lower takeout for all bettors;

Higher attendance, handle and revenue for track operators;

Bigger purses for owners;

Safer racing environments for jockeys and horses;

Increased uniformity in medication and testing rules for trainers;

An interstate compact for everybody who wants tougher, more uniform regulation without cumbersome, expensive federal intervention

Fuller fields for racing secretaries (and bettors);

Improved education and development efforts for new fans;

More homes and second careers for retired racehorses;

A plethora of buyers for breeders and renewed investment in our game on all levels;

Elimination of tax withholding for players;

Lower prices on important goods and services for tracks, farms, horsemen and fans;

Innovative wagers and promotions for marketers;

Expanded Web-based collaboration for tech-savvy players;

Better working conditions, including affordable medical coverage, for backstretch and farm workers;

Improved laboratory and drug testing standards for racing regulators;

Effective wagering monitoring technology for tote companies;

Better injury reporting data for equine health and safety researchers;

Great story ideas for turf writers;

More advertisers for the trade press; and

A renewed dedication to safety and integrity for all who participate in the horse racing industry.

Don't worry. We at the NTRA are not waiting for St. Nick to deliver this assistance like gifts under the Christmas tree. We are dedicated to the improvement of Thoroughbred racing in all these ways and more. From our Safety & Integrity Alliance, to our industry-wide marketing and legislative initiatives, to our Advantage program, we work hard in many different ways to improve the economics of Thoroughbred racing.

The months and years ahead are pivotal ones for horse racing, and we are determined to do all that we can to build new enthusiasm and deliver results. We hope you will join us in that effort.

What's on your wish list for racing? Let me hear from you.

Tax Benefits for Horse Owners Continue into 2010

cdawahare@bloodhorse.com — Mon, 21 Dec 2009 16:03:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Two tax incentives that greatly benefited the horse industry are set to expire at the end of the year...but there's still time to take advantage of them if you're thinking of an equipment purchase in 2009. Another tax benefit - just for horse purchases - continues for several more years.

Those expiring soon are a pair of tax benefits Congress allowed in back-to-back Economic Stimulus bills. Bonus depreciation and an increase in the expensing allowance offer buyers a tremendous opportunity to write off a substantial portion of the cost of a horse, or other depreciable qualifying property like farm equipment, in the year purchased. Although a third consecutive Stimulus bill in 2010 appears unlikely, Iowa Sen. Charles Grassley has introduced legislation that would extend bonus depreciation. Stay tuned on whether this eventually will become law.

The good news is that buyers and breeders will continue to benefit from the faster depreciation schedule of young racehorses, a measure included in the five-year Farm Bill that became law on January 1, 2009. The NTRA's legislative team helped secure passage of the bill, which had bi-partisan support from Senators Mitch McConnell and Jim Bunning of Kentucky and Arkansas Senator Blanche Lincoln, among others. It took five years of lobbying, but the outcome was worth the wait.

The tax code now reflects current racing practices, where most horses are retired before age five. Since depreciation is used to offset income generated by an asset over its useful life (the expected period of time, in years, that a depreciating asset is productive), it made little sense for any racehorse to be on a 7-year schedule because most typically are not still on the track earning purse money for their owner.

An important consideration for this new measure is the definition of a young racehorse. The Internal Revenue Service defines a young racehorse as one less than 24 months old when "placed in service." A horse is generally deemed to be placed in service when it begins training. Those over 24 months old when purchased and put into training already were on a 3-year schedule. Now all racehorses, regardless of age when purchased and put into training, are depreciated on that schedule.

All of this means that buyers looking to purchase yearlings or younger two-year-olds, and ultimately race them, are in a far better tax position than they were prior to the most recent Farm Bill. Combine this with lower bloodstock prices and it may be the best time in recent memory to get out there and buy.

It's important to note that horses purchased for re-sale (pinhooked) are considered inventory and are not eligible to be depreciated.

For those of you involved in horse ownership as a passive investor, you are eligible to write off a portion of a horse's depreciation. I encourage you to consult with a tax professional regarding your situation.

There remain many questions about the bloodstock market as we approach 2010: Have we seen the bottom? Will buyer demand increase? Only time can answer those questions. But we know for sure that tax laws now better reflect economic reality in our business.

What are your plans for 2010? And, what other tax incentives would interest you?

Alliance Assessment - Unfinished Business

Blood-Horse Staff — Sat, 12 Dec 2009 17:00:00 GMT

By Alex Waldrop, President and CEO of the NTRA

In the fall of 2008, the NTRA brought together 55 racetracks and every major horsemen’s organization for the purpose of forging a new path for horse racing. Together, we pledged support for the affirmation that the health and safety of racing’s human and equine athletes and the integrity of the sport are horse racing’s top priorities.

But words are cheap so we dedicated the industry to action by forming the NTRA Safety & Integrity Alliance. The stated purpose of the Alliance was and is to implement uniform safety and integrity reforms on a nationwide basis through the adoption of a comprehensive code of standards and to function as a certification/accreditation body for the purpose of recognizing and enforcing compliance with the standards.

As part of that process, we identified the need for an objective observer who would be accountable to the public at-large as an independent monitor of Alliance activities and progress. The Honorable Tommy G. Thompson, former Governor of Wisconsin and former Secretary of the U.S. Dept. of Health and Human Services, and current partner in the major Washington, D.C., law firm of Akin Gump Strauss Hauer and Feld, was selected as the monitor.

This week, Gov. Thompson and his colleagues at Akin Gump issued the first annual assessment of industry progress in achieving the objectives of the Alliance. Take a look at the report and familiarize yourself with its findings. I think you will find that it is tough but fair and that its message is clear – real progress has been made but more work needs to be done.

The substance of the findings and recommendations are contained on the last eight pages (pages 41-47) of the report. They based these findings on a review of the Alliance materials including documentation of every accreditation and also on extensive interviews with a wide group of industry stakeholders including tracks, horsemen, retirement/retraining organizations and others, including customers. The work is well documented and intended to improve the process going forward.

The monitor concluded that the Alliance Code of Standards was generally well conceived and received the appropriate industry input. They asked the important question whether racetrack accreditation is an effective vehicle for industry reform. Based upon Akin Gump’s extensive experience with the formation of other self regulatory organizations, especially in the healthcare field, they opined that the Alliance process was largely successful and had the potential to achieve considerable results as the process gathers momentum.

The monitor did, however, identify weaknesses in the process that we will address, including insufficient on-going compliance checks and the lack of incentives to persuade non-Alliance racetracks to undergo accreditation. Their recommendations had merit and we are working on the best approaches to these issues.

The monitor noted that more input and action is needed in the area of aftercare/retirement of racehorses (an aftercare subcommittee has already been formed to broaden efforts in this area). The monitor encouraged the annual review and strengthening of requirements for accreditation and in particular recommended that we create a process to allow the public to provide broader input into the Code. We agree that greater public input into the process is vital, and we already are in the process of drafting a strengthened Code for 2010.

There is a lot of information to digest in the report. My one request to you is that you that you spend a few minutes reading the conclusions of the report and give me the benefit of your assessment as well. Thanks.

What a Year

cdawahare@bloodhorse.com — Wed, 02 Dec 2009 16:28:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Voting will get under way next week on NTRA.com to determine the 11^th annual NTRA Moment of the Year. Voters can choose from among 10-12 images drawn from this year's events. Those selecting the winning image will be entered into a drawing to win two tickets to this year's Eclipse Awards on January 18 in Beverly Hills, CA. Of course, the highlight of the evening will be the announcement of the 2009 Horse of the Year, something that I'm predicting will be one of the most memorable moments of 2010.

Selecting the 2009 Moment of the Year may be nearly as contentious as selecting the 2009 Horse of the Year. Our team at the NTRA has drafted a list of 14 memorable moments from 2009. We're looking to cull the list to 10-12 before the contest goes live, but it won't be easy. We're also looking to make sure we haven't forgotten anything. Here's the initial list of contenders.

1. Well Armed blows away the field in the Dubai World Cup

2. I Want Revenge overcomes a horrific start to capture the Wood Memorial

3. Rachel Alexandra runs off with the Kentucky Oaks by more than 20 lengths

4. Mine That Bird posts stunning, 50-1 upset in the Kentucky Derby

5. Rachel Alexandra turns back the late charge of Mine That Bird in the Preakness

6. Rachel Alexandra toys with the boys in the Haskell Invitational

7. Gio Ponti captures his fourth consecutive Grade I score in the Arlington Million

8. Rachel Alexandra holds off her male elders in the Woodward Stakes

9. Linda Rice becomes the first woman to win the Saratoga training title

10. Summer Bird registers historic triumph in the Jockey Club Gold Cup

11. Goldikova wins her second straight Breeders' Cup Mile

12. Conduit runs down the stubborn Presious Passion for a repeat score in the Breeders' Cup Turf

13. Zenyatta remains undefeated and becomes first female to win the Breeders' Cup Classic

14. Racing mourns the passing of Hall of Fame trainer Bobby Frankel

The first NTRA Moment of the Year involved the poignant scene of Charismatic and jockey Chris Antley following the 1999 Belmont Stakes. Over the years, other winners have included triumphant moments in the Triple Crown and Breeders' Cup, the late Barbaro, and even the death of the last living Triple Crown winner, Seattle Slew. Last year's winning moment was Zenyatta's victory in the Breeders' Cup Ladies Classic.

Don't forget to vote for the Moment of the Year beginning next week. In the meantime, let me know about your favorite racing moment of 2009? Is there anything we should add to our list?

Gratitude Too

Blood-Horse Staff — Wed, 25 Nov 2009 23:01:00 GMT

By Alex Waldrop, President and CEO of the NTRA

Lots of great racing around the country this Thanksgiving weekend. Aqueduct, Churchill Downs, Fair Grounds, Hollywood Park, and Sam Houston, among others, are each preparing for big days of racing and dining. Nothing better than turkey and dressing at the track. The whole family will enjoy it. Just don't forget to count your blessings along with your winnings.

As an industry, despite these difficult economic times we have been richly blessed with a memorable year of racing. Two of the best female horses ever - Rachel Alexandra and Zenyatta - have catapulted horse racing into the national spot light for all the right reasons. That's something we can all be thankful for.

Also, in part due to the industry's focus on safety and integrity, all our Triple Crown and Breeders' Cup events were safe and fair this year. We must not take for granted the progress we have made this year in this regard. We will have to continue our progress in 2010, but for now it's right and good to express gratitude for all the efforts and good fortune that made 2009 such a successful year on the racetrack to this point.

Lastly, I wanted to thank you for your comments and feedback throughout this year. Your passion and participation make this the great sport and game that it is. Happy Thanksgiving.