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.

8 Comments

Leave a Comment:

louise

Part of the problem with horse racing in California is that the industry doesn't seem to be courting new fans.  When young people are exposed to the sport, and betting/handicapping is explained to them, many find it interesting and exciting.  This sport is full of wonderful stories and quirky characters and playing it is an intellectual exercise unlike throwing dice or pulling a slot machine lever.  It is simply not being marketed much at all and certainly not to the young crowd.  

22 Nov 2011 8:09 PM
KY VET

ROCKET SCIENCE!! Why ????????????? You wonder why cal. racing has problems? NOBODY can figure it out? A 4 yr old can figure this stuff out! But THE GENIUSES running cal racing cant/ or wont fix whats wrong....I am a PROFESSIONAL HANDICAPPER...I make LIVING playing this sport...Your PRODUCT SUCKS!!!! Thats whats wrong! there! You just found out the big mystery!!! Why does it suck?......This is a gambling sport!!! I open the form...take out the GG pps... throw in the trash! 4 to 6 horse fields? Why gamble? You cant win anything! Same problem with other tracks... This is 90 percent of the problem.  Cut back the races!! DAYS!!!! make RULES!! like no fields lower than 8 entrants or some number....ITS NOT HARD TO FIGURE THIS STUFF OUT!  WE PRO players like big fields!! (like TAMPA BAY DOWNS..etc.)   MORE IS MORE!!! and LESS is MORE!!!  IS THIS PROBLEM SO HARD TO FIX?

22 Nov 2011 10:23 PM
Pedigree Ann

Arguing about who goes with whom in which lifeboat while the ship is sinking. Typical. I remember when the TOC ousted the old horseman's association in a naked power grab by owners against trainers. As if only owners knew what is important to the industry as a whole.

When I started going racing in SoCal, there were 8 races a day, Tuesday to Saturday. Stakes races, 1 per day, Tues, Thurs, & Sat at the major track. During the population explosion of the 1980s, number of races and stakes races expanded as well, but it has remained near that bloated level now that the population has shrunken again to the 1970s levels. Radical trimming of number of races and especially stakes races is required to create more competitive fields.

23 Nov 2011 9:22 AM
Shelby's Best Pal

I love California racing but the problems are definitely there. Thank you for addressing them, Lenny.  I enjoy ATO.  Love you and Steve.

23 Nov 2011 11:39 AM
predict

Lenny, thanks for the insights and information on California racing. I became interested in horse racing because of Golden Gate Fields some 45 years ago, and I have to agree with KY VET that the current programs offered just don't compare or attract players like they once did. I expect that we will lose Golden Gate sometime soon because the UC Labs are looking for real estate to expand, and the land which GG sits on is being highly considered for this purpose. I can't say I would miss it, as I have had no interest in the product there for quite sometime, while at the same time, nostalgically speaking it would be missed.

One of the other problems with California is the changing population demographics. The state , especially the Bay Area, is an immigrant destination for many people who have no historical interest in horse racing and therefore do not lean toward a sport in which they have no interest. As long as this country keeps allowing and passing legislation to make it easier for people from Afghanistan, Iraq, India, etc., to come to California, you can kiss goodbye most of the American traditions. Good example is the city of Fremont in the Bay Area, how many people outside this area know that this city, which once was an agricultural part of the Bay Area, is now known as "Little Kabul" because it has the largest number of Afghanistans, estimated to be 40,000 plus, of any city outside Afghanistan. There is no horse racing interest with these people. I have to wonder why we as a country are allowing, 1,000+ a month, Iraqi's into the country as refugees right now, I thought we freed their country so they wouldn't have to flee oprression. Also right now there is legislation being formed in US congress to allow anyone, anywhere to come to ths country if they can buy a house worth at least $500,000. I believe this is how we plan to get back some of the money we pile on countries around the world in the name if AID! And if this is how we plan to help our ailing housing market rather than creating well paying jobs for Americans so they can afford to buy homes, then I expect Americans aren't going to have a lot if extra cash for horse betting.

27 Nov 2011 12:34 PM
fb0252

over and under on who will be the first racing journalist to figure out that what's needed is track owned ADWs advertising in venues outside horse racing???

28 Nov 2011 2:22 PM
The Deacon

Look at Woodbine, large fields mostly plus an even longer campaign. It seems that the meet lasts forever. Pattern themselves after them. California freeways are crowded, Hollywood Park is in the middle of a not so favorable area, Santa Anita just came off the Synthetic fiasco as well. Too many races, too small  a fields and night racing doesn't work, too many other things to do. Indian casinos have ruined the sport just as much. Why wait 30 minutes between races when you can drop a load in a slot machine.........

They are doomed, but the industry as a whole is in deep do do.

29 Nov 2011 3:05 AM
Dogs Up

  Do Geeks Even Gamble?

Present and emerging generations live within the Internet, digital, real-time-connected world.  This includes the use of social media, app-orientations, cell phone, and laptops.

The real-time generation wants pizza, TV shopping, texts, photos, virtual services and merchants to deliver via Internet interface. Generally, these outputs and inputs are realized while they are doing something else.

Served up to their residence, car, place of work, or recreation indoors or outdoors. And yes, they might be outdoors at a race track ordering a pair of shoes or reading messages about where to meet after the races.

Accordingly, new virtual audiences will not have that get caught-up in the highs and lows previous generations experienced being at the track as those previous, who were at the rail and paddock. The old school who handicapped with a pen and program or form. Cashed tickets and felt the cash.  And race-by-race felt the rush while observing track bias and the hot jockey of the day.

Accordingly, cyber customers don't go to a book store, pizza shop, movies, or race track.   It comes to them via laptop, cell phone and nook/e-reader. And if they were to go to a pizza shop, they would be on their phone texting while ordering, surfing the net while eating, and  talking on a cell while walking out the door. This is an instant real time society. Instant replay, instant texting, instant pudding. No waiting 30 minutes, between 9 texts. Opps, I mean 9 races.

As a self-proclaimed expert in the understanding of the myriad of participating interests of thoroughbred industry, as well 21st century marketing to digital  audiences, it is advisable to tailor one's new sales and marketing to attract this potential  group as  'wagering revenue streams' . Not fans, or track 'attendees.''

This is an obsolete marketing goal. Go Baby Go! There are no residuals in a fan-base headcount. Only take out of handle can be spent.

Brick & Mortar vs Off Track Bet/ADW/Simulcast

One of the issues is the substantial brick and mortar investment race track developers have already incurred via track modernization over the last decade. Unfortunately, build it and they will come does not apply.

Future audiences, the new digital generation,  not  the digital upgrade of  presently horse racing fans are not much into gambling on any sport, table game, lottery included. Many didn’t even play or enjoy baseball as  youngsters. Some mat play poker on-line in that they believe they are making decisions of outcome based on math and individual play techniques.  

If an entity or entities targets a new market, in this case a social media crowd, digitally-apped audience, one should target them to wager and learn and participate remotely and digitally.  First~ Off Track, not at the Track. Following the acquisition of  new digital daily double players, then and only then, might a track get them to go to the track.  But only as an adjunct, keeping them digital as a player should the prime motive and opportunity for growth.

After gaining new and real business on line via ADW, stakeholders might be able to channel this  new  found customer and steer them to the track.  Andy why?  Because  the digital crowd, when live at the track will predictability be on their cell phones, texting, talking, emailing, and probably watching the race on their cell or laptop via their newly acquired ADW site.  And on Derby Day, via network telecast via their laptop at the track. Not on track monitors. And live? No.

PLAN B -e-t

Observations to consider making a plan.

People go to the race track to win money. Action. Same for off track simulcast, remote betting.

Digital people want the stuff to come to them.  Why fight it?

It's also one of the few 'sport' endeavors or recreation where people attend often alone.

The first experience will decide a return visit, or never to return again.

Anyone who goes to the races for the first time and can explain it is a genius.

Conversely, one already knows about baseball before they attend their first professional game.

Horse players don't  spontaneously socialize or come together as strangers in the context of a group

of fans of Xen State U. or NY Yanks.

A new generation of players would still have to overcome the public's brainwashed stigma of being anyone who is more than generally interested in racing and betting.  

The best way to describe this anomaly is say within an office environment. One person says he is going to Florida for two weeks of golfing, staying at a casino at a cost of $6,000. He's looked upon as cool.  Another says he is going to the races frequently, and others respond ‘count the petty cash box’, this guy plays the ponies. Making racing fashionable is still a test.

In a 50 day race meet, races are predominately during the workday. Night racing is not the rule. College basketball is at night.  Football weekends. Other pro sports at night. At the same venue, day or night time racing competes with a casino at a  Racino.

And new people to racing would be a blended-customer at a  Racino vs a traditional track venue.

If you audited a present winter weather Track X;  on a Wednesday,  for 4 weeks in December,  85% or more of the attendance are  the same people.

15 Dec 2011 3:45 PM

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