Go for the Gold by Lenny Shulman

(Originally published in the November 26, 2011 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.

By Lenny Shulman

Isolated by geography and prevented by statute from cashing in on casinos that are solely the purview of
 Native Americans in the state, California needs enlightened and innovative leadership if its Thoroughbred industry is to thrive in, or even survive, these desperate times.

Already the Northern California circuit is hanging by a thread, and statewide attendance, field size, and handle have been trending the wrong way for years.

California’s unique station in North America’s racing world was recognized 30 years ago when several leaders formed the first, and still only, statewide organization for owners. Those pioneers, men such as Ed Friendly and Mace Siegel, have mostly passed from the scene, and their Thoroughbred Owners of California has fallen on fallow times.

The TOC has whiffed on any number of major issues. The splits it negotiated for sending California’s racing signal to advance deposit wagering concerns and out-of-state simulcasters do not return sufficient funds to the racetracks that put on the show or to the owners who supply the horses. Worse, the TOC has been an outfit that operates in the dark, controlled by the few who have grabbed the power and gamed the process while the membership as a whole remained uninformed. Two years ago the board appointed respected attorney Steve Schwartz as TOC president, then immediately proceeded to leave him out of all decision-making, large and small. Schwartz resigned within months.

The membership was kept at arm’s length when TOC leaders decided to spend $600,000 on attorneys and consultants to see if TOC could purchase Santa Anita Park. It couldn’t, and the money was gone with the wind.

Last year the TOC continued its tone-deaf decision-making when it decided to bump up purses for owners by raising the takeout on its customers, the bettors. A players’ boycott ensued, and while “higher purses, lower handle” might work for the short term, it is not a sustainable financial model.

At a time when more and more trainers by necessity own horses, the TOC has been operating under bylaws that prohibit owners who also have trainer licenses from voting in TOC elections or from holding more than three of the 15 seats on the board. That may have been the last straw, as earlier this year a splinter group called the California Thoroughbred Horsemen’s Association was formed and gathered enough signatures to commence a decertification vote of the TOC.

With that vote hanging over its head, the board of the TOC last week offered to amend its bylaws and allow dual licensees full voting rights, as well as increase to six the number of board seats dual licensees could fill. A vote on the bylaw changes will be completed in January. If the changes are voted down, the decertification vote will proceed. If they are accepted, a vote to seat an entirely new TOC board of 15 will be held in February.

The CTHA plans to run a slate of candidates for those board seats, and several current TOC board members have stated they will also run to keep their positions.

What is important going forward is for horsemen to concentrate their energy and attention on improving the state of racing in California rather than on infighting. Billy Koch, a current TOC board member who will run for the new board, and trainer Darrell Vienna, a mover behind the CTHA, agree on several avenues the TOC must travel, such as finding takeout levels that give players a break. Koch cites technology upgrades such as HD broadcasts and wagering from mobile devices. They both mention new types of wagers, Vienna suggesting a weekly lottery where a losing ticket will pay out big for a lucky ontrack patron. Important as well will be making the TOC an organization that operates in sunshine rather than in the shadows of manipulation by the few.

More problems lurk on the horizon of the Golden State, including what to do when, not if, Hollywood Park shutters and horses need to be stabled elsewhere. California needs the TOC to be a forward-looking force able to find solutions rather than a poorly run reactive regime.

Making an Impact

There was some good news from a pair of recent economic impact studies regarding Thoroughbred racing: one on the industry as a whole in Kentucky and one on racing’s impact on the greater Capital region of New York State.

The New York study, released by Saratoga County Industrial Development Agency, notes the 2010 race meet at Saratoga generated between $186-$213 million in economic impact for a nine-county region. That’s $61 million in track operations, $58 million from participants, and $67-$94 million spent by tourists and visitors to the region. There’s little surprise the Saratoga stand is a “crucial economic driver” for the locals.

Kentucky’s report, prepared by the state’s Legislative Research Committee, notes a total benefit of $1.58 billion spent directly or indirectly on the Thoroughbred industry in the Bluegrass State in 2010. Keys to this study are it looks only at the Thoroughbred industry and it was done by a state agency, which should carry more weight in Frankfort when the legislature gathers next year.

Here’s hoping both studies do some heavy lifting to inform our elected officials of the importance of our industry.

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