Archive for the ‘Kentucky’ Category

With fewer incentives than other less traditional racing states, the Horse Capital of the World is reeling from the failure of opportunities like expanded gaming at racetracks combined with the overall economic impact of the worldwide recession.

Ro Parra of Millennium Farms said in Alicia Wincze’s column, "I’m not sure if the number of stallions leaving is more than it has been in past years, but it sure feels like it."

Read it at the Lexington Herald-Leader

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings

The following op-ed, written by KEEP Executive Director Patrick Neely, is a well thought out plea for a reconsideration of expanded gaming in Kentucky. Refreshing in its details, it is clear that not only does KEEP want to continue to push for expanded gaming through collaboration but is also open to other ideas to help Kentucky’s signature industry.

- Bradford Cummings

By Patrick Neely
Executive Director, Kentucky Equine Education Project

During the last month, much has been written about expanded gaming in the context of our state budget crisis. Lost in most of the discussion about whether money from expanded gaming should be used to fill budget holes is the simple and sad truth that our signature horse industry is in a rapid state of decline.

It is not disputed, even by opponents of expanded gaming, that competitor states are successfully stealing our industry right out from under our noses. Using money from expanded gaming to significantly boost their purses and breeders’ incentive funds, states like Pennsylvania, Indiana, West Virginia and Louisiana are luring our racehorses and breeding stock out of Kentucky.

When horses leave, jobs go with them. Every horse that lives in the state of Kentucky is like a little factory, a full-blown jobs creator. Every horse requires people to grow their food, give them vet care, transport them, produce and sell tack and other equipment, build their barns and paint their fences, care for them on a day to day basis, shoe them and train them. Most racing and breeding stock also create jobs in the legal, insurance, advertising, and banking fields. Not to mention all of the employees at industry trade publications, sales companies, and of course, Kentucky racetracks. And how about the millions of dollars that come from worldwide tourists who recognize the beauty and attraction of our industry?

It is beyond dispute that tens of thousands of Kentuckians depend on the horse industry to make their living. And without a doubt, those jobs are being lost or moved to other states at an alarming rate.

The most common complaint I hear is that if our industry cannot stand on its own two feet, it does not deserve any special treatment. This would be akin to telling the University of Kentucky that they are not allowed to offer scholarships to their athletes, and then expecting them to “stand on their own two feet” and remain competitive. The simple truth remains—if your competitors are given a significant advantage, it makes it nearly impossible to compete. That is why the industry has been so steadfast in its request for a level competitive playing field.

In the wake of a recent Bluegrass State Poll that showed overwhelming support for putting video lottery terminals (VLTs) at Kentucky racetracks, and similarly showed an overwhelming desire of Kentucky residents to vote on the issue of expanded gaming, it has been suggested that the industry should support Sen. Damon Thayer’s proposed constitutional amendment, which would finally “let the people decide.”

It should first be noted that Sen. Thayer has done much good for Kentucky’s horse industry, including strong support of the Breeders’ Incentive Fund. However, we fundamentally disagree with Sen. Thayer’s approach to this problem. First, an amendment could not be voted on before November. It seems a foregone conclusion that our out of state competitors, who have spent tens of millions of dollars to defeat gaming amendments in other states, would no doubt spend whatever it took to defeat an amendment here in Kentucky. But assuming an amendment would pass, where does that get us?

According to Sen. Thayer’s amendment, the legislature is not required to allow VLTs at racetracks, even if an amendment did pass. It simply gives the legislature the option to do so. In other words, even if an amendment passed, we would be in the exact same place we are right now in 2011, asking the legislature to pass a statute allowing VLTs at Kentucky racetracks. If they won’t pass such a law now, why would they pass it a year from now? We don’t need a referendum to know that Kentuckians support the concept. Poll after poll has demonstrated that a wide majority of Kentuckians believe we should have VLTs at Kentucky tracks. So why not just pass the statute right now?

If the industry were to clear the amendment and legislative hurdles, the Thayer provision then calls for a local referendum to approve VLTs at tracks. If the local referendum passes, then VLTs go out to a bid process that is open to everyone, and the machines do not have to go to racetracks. So a big out of state casino company could open a stand-alone slots facility in the same cities as our racetracks. After the bidding, a license procedure would have to take place, and if New York and Maryland are any example, the bidding and licensure process can last several years. Finally, once all of that is accomplished, the winning bidders would have to build the facilities and get up and running.

Even if the industry cleared every one of those numerous hurdles, the process would quite clearly last several years. The industry cannot wait several years for permission from state government to compete. We are losing horses and jobs today. Timely action is critical.

So where does that leave us? Our industry is willing and anxious to work with our elected officials to arrive at a creative solution. The Speaker of the House has offered an idea that seems to be the right compromise. His plan would allow cities that have racetracks to vote on whether those tracks should be allowed to install VLTs. This proposal should answer most everyone’s objections. The local referendums could take place as soon as this summer, and would be handled in a manner similar to wet/dry alcohol votes. Assuming the measures passed, money could flow to purses, breeders’ incentives and other worthwhile programs in a very short time after that. This proposal should also satisfy those legislators who want to “let the people decide.” Under this scenario, the people who live in communities with racetracks will make the decision whether or not they want VLTs in their communities. This system works for alcohol sales, so why not use it to decide the VLT question?

Another idea is to slightly lower the pari-mutuel tax, and to divert the tax proceeds to purses and breeders’ incentives. Kentucky racetracks are double-taxed on the wagers they receive (pari-mutuel tax and corporate income tax), so if the state wants to continue double-taxing the industry, it would make sense to send some of that tax money back to support the industry. A tax reduction and redirection could save our struggling racetracks a small amount, and could redirect funding into purses and breeders’ programs. That change would not come close to leveling the playing field, but it would be a good start.

Horse owners, breeders, trainers, and racetrack operators are willing to work in a collaborative fashion to solve this monumental crisis in the industry. The only option that is unacceptable is legislative inaction. The future of our signature industry and thousands of Kentucky jobs are at stake.

Robin Webb, the Kentucky Democratic Senator the horse industry helped elect during a special election in 2009, is at the center of a “controversy” in the wake of allegations that she called Republican Senate President David “Blackjack” Williams a naughty name. We weren’t there to hear what she called the horse industry hater, but the Lexington Herald-Leader, which put the story on the front page of Saturday’s edition and devoted nearly 27 inches to the story, gave us a pretty good clue: “a four-letter expletive that has the same first three letters as dictator” (the latter word the one Webb claims using to describe Williams).

I don’t do crossword puzzles, have never liked watching “Wheel of Fortune,” and don’t event play that stimulating numbers game called “Sudoku.” But even I can figure out that the word Webb is accused of calling Williams is D-I-C-K.
 
That’s pretty tame, because there’s a lot of people in Kentucky who think Williams is not only a dick, but that he’s a $%#$@%&$%^@#, a $%^&#@$%, and an @#$%@&#%^.

As for Robin Webb, all we can say is “You go, girl!”

After months of back and forth between Republicans in the Senate and Democrats in the House and Governor’s Mansion, the people have finally spoken out on the issue…and they want slots. A new WHAS11/Courier-Journal Bluegrass poll shows that 59% support slots while only 37% oppose them.

This is welcome news for those in the Kentucky Thoroughbred industry. However, it’s not all sunshine here as the poll also indicates 85% in favor of letting the people decide, not the legislature.

Read it at WHAS 11 news

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings

By Ray Paulick
The news just doesn’t get any better at the publication where I spent 15 years of my professional life, but the fact that Blood-Horse magazine has laid off at least five more employees today is just as much a sign of the collateral damage from the Kentucky Thoroughbred industry’s economic troubles as it is a statement on the present and future of newspapers and magazines.

Tick off five more losses from the estimated 100,000 jobs the horse industry contributes directly or indirectly to Kentucky’s economy. I have lost count of how many of my friends and former colleagues at Blood-Horse have lost their jobs in the last 18 months. As my Paulick Report partner, Brad Cummings, and I have traveled from business to business in Kentucky, we’re hearing the same refrain, whether it’s at farms, racetracks, suppliers, tack shops, insurance or advertising agencies: this industry is hurting, and it’s painful to see the continuing losses and the damage it inflicts on the individuals and their families.

Each job loss within Kentucky’s signature industry should send a dire message to Frankfort, but I’m afraid our state legislators are tone deaf. With the news that VLT or slots legislation is almost certainly a non-starter again in 2010, it means that Kentucky’s horse industry faces another year of operating on a playing field that is far from level with a majority of states. Racehorses, mares and stallions are leaving the state, and so are the jobs they contribute.

You’ve read it here and many other places that print publications are in trouble, and there’s no doubt the razor thin issues the Blood-Horse has been printing lately reflect a significant shift in advertising dollars from print to online publications. Advertisers are adjusting out of necessity since their revenues are down, and they have to maximize every dollar they spend. Make no mistake: I’m grateful to be on the right side of the technology curve, but it doesn’t make it easier to see what’s happening to so many former colleagues.

Copyright © 2010, The Paulick Report

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House Speaker and slots supporter Greg Stumbo has all but declared slots dead in Kentucky. “I really don’t see a scenario where those bills will become an issue in this session,” Stumbo said. “Nothing has changed in the Senate, so why would the House want to act again?”

Click here for the entire article by the Lexington Herald-Leader’s blog

Then come back to the Paulick Report and give us your reaction

- Bradford Cummings

Kentucky State Senate President David Williams’ referendum calling for a constitutional amendment on expansion of gambling failed in a party line vote yesterday. While it received a majority (21 - 16 with one Democrat absent), it takes 23 votes for any legislation to pass the Senate.

Senator Kathy Stein called out Williams by pointing out his hypocricy on the issue. This is a referendum and noted that the Senate President had previously stated Kentucky isn’t a ‘referendum state’.

Click here for the entire Blood-Horse article

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings

By Ray Paulick
Kentucky-bred horses dominated the Eclipse Awards handed out in Beverly Hills, Calif., earlier this week, but that’s no surprise. Of the 10 horses that won an Eclipse Award, eight were Kentucky-breds, including Horse of the Year Rachel Alexandra and runner-up Zenyatta. The two others were Mixed Up, steeplechase champion, bred in Pennsylvania, and Goldikova, female turf champion, bred in Ireland.

The 80% strike rate by Kentucky-breds among the Eclipse Award winners was even more dominant than the performance in 2009 American Graded Stakes races by horses bred in the Bluegrass State.

According to Paulick Report records, of the 322 individual American Graded Stakes winners of 2009, 192 of them were bred in Kentucky. That’s a percentage of 59.6%. The state that bred the next highest number of AGS winners was Florida, with 35, 10.9%. California and New York bred eight AGS winners each, a percentage of 2.5%.

How do those percentages stack up with opportunity?

Well, Kentucky breeds the most Thoroughbreds (10,466 Kentucky-breds were registered in 2007, according to the Jockey Club), and accounts for 30.9% of all foals bred and registered in the United States. So Kentucky-breds are overachieving in American Graded Stakes at a ratio of nearly 2-to-1 (30.9% of foals compared with 59.6% of AGS winners). Florida is holding its own, contributing to 12.7% of the foal crop and winning 10.9% of the AGS races. California was ranked third in 2007 by foals, accounting for 9.0% of the foal crop but winning only 2.5% of the AGS races. Louisiana is fourth by foals produced, accounting for 7.4% of foals but had no AGS winners of 2009. New York is fifth by foals, with 5.3% of the foal crop and winning the same 2.5% as California in AGS races. (Click here for the ranking of U.S. states by foals born)

Who wins the most Grade 1 races? You only get one guess.

Of the 80 American Grade 1 winners of 2009, 58 of them were bred in Kentucky, or 72.5%. Four G1 winners (5%) were bred in Florida, three in California, and two each in Maryland and Virginia.

The state that did the most with the least was Virginia, which produced five American Graded Stakes winners from a foal crop of only 403 in 2007, the 14th largest breeding state in the U.S., and accounting for just 1.2% of all U.S.-bred foals.

There were 13 Irish-bred winners of American Graded Stakes, three of which won G1 races in the U.S. Great Britain produced the next-highest number of AGS winners, 10, with three of them winning G1.

Here is the complete list of American Graded Stakes winners by state/country where bred, with G1 winners in parentheses: Kentucky, 192 (58); Florida, 35 (4); Ireland, 13 (3); Great Britain, 10 (3); California, 8 (3); New York, 8; Maryland, 6 (2); Virginia, 5 (2); Argentina, 4 (1); Brazil, 3 (2); France, 3 (1); Canada, 3; Oklahoma, 2 (1); Germany, 2; Pennsylvania, 2; Australia, 1; Arizona, 1; Illinois, 1; Japan, 1.

The message is clear: Kentucky, while facing severe economic and competitive challenges from states with breeding and racing programs recently enhanced with revenue from slot machines and other forms of gambling, remains the clear-cut leader in the production of top-quality Thoroughbreds. How long it can maintain such a position of dominance remains to be seen.

Copyright © 2010, The Paulick Report

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By Ray Paulick
I’ve known Damon Thayer going on 20 years, and I don’t think he’s a bad person. But I’ve seen how good people can be intoxicated with power, and am convinced that is what is going on with the former racing industry executive who is now a Kentucky state senator from Scott County representing the 17th district.

A few weeks ago I reported on an interview Thayer did on the Horse Racing Radio Network (click here for the article), in which he complained that no one from the Thoroughbred industry was contacting him about his proposed constitutional amendment calling for a statewide referendum and local option vote to permit slot machines in Kentucky counties where racetracks are located (not necessarily at tracks, but in counties where tracks are currently located).

Woe is him.

Perhaps the reason no one is interested in calling the senator from Scott is the fact his proposed amendment is outrageous because it would ultimately lead to out-of-state casino companies and developers putting Kentucky racetracks out of business. That’s exactly what is happening in the state of Maryland, where slot machines were approved for a location not at Pimlico or Laurel but at a shopping mall owned and operated by the Cordish Company. Yes, that’s the same Cordish Company that developed Fourth Street Live in Louisville.

If Thayer’s folly is somehow approved as written (very much a longshot at best), Cordish will be salivating over the prospect of getting the slots license in Jefferson County, Kentucky, where Churchill Downs is located. Another well-funded casino company would surely end up with the license in Northern Kentucky. So we’d have Turfway Park certainly out of business as a racetrack, and Churchill Downs severely impaired financially.

But, Thayer says with almost ghoulish delight, we’ll have all that slots money going into purses, based on how his amendment is written. Yes, Damon, just like in Maryland, where there will be money for purses, but no tracks able to stay open to run the races where the purses will be offered.

Sources tell the Paulick Report that employees of the Maryland Jockey Club are being told Laurel is going to be bought by a developer (Cordish?), and closed for live racing. Someone will operate Pimlico for 30 days during the Preakness meeting in the spring, at least as long as the walls of the rickety old racetrack grandstand don’t collapse. And that, along with a short meeting at the state fair in Timonium will be it for live racing.

If true, it will be a devastating and final blow for the once-proud Maryland breeding industry, where the mighty Northern Dancer once stood as the world’s most important stallion. Allowing Thayer’s folly to proceed will cause similar destruction to Kentucky’s signature industry.

So Thayer, in a snit because no one was calling him to discuss his ludicrous proposal, decided to drop another bomb when a reporter from the Lexington Herald-Leader called him to inquire about the horse industry’s exemption on sales tax for certain horses sold at auction (the exemption, which does not apply to all horses sold, is not as comprehensive as that given to the horse industry in other states).

When asked whether the exemptions should be discontinued, Thayer said it is “certainly cause for serious debate.”

It was his way of flipping the almighty bird to a now struggling industry that is not only vital to the economic future of this state, but one that has provided him and his family a very good living for many years.

Speaking of the almighty, it’s amazing to me that a Senate committee chaired by Thayer (the State and Local Government Committee) wasted taxpayers’ time and money on Wednesday, approving along a straight party-line vote (Thayer’s Republican colleagues won the day over Democrats 7-5) something called the 21st Century Bill of Rights. Among other things, this new and improved bill of rights (as if our Founding Fathers weren’t very wise) would prohibit a ban on the Ten Commandments being posted in public buildings. If you get a chance, check out this troubling and funny video clip of a Georgia Congressman, Lynn Westmoreland, who sponsored a bill requiring the Ten Commandments to be posted in public buildings. (Click here to view.) Seems the Congressman has a hard time knowing exactly what those Commandments are…which makes me wonder how Sen. Thayer and his colleagues would do on a pop quiz.

But I digress.

Thayer is essentially drunk with power, sitting on his senatorial throne while waiting for individuals in the horse industry to come to him, hat in hand, begging for some scraps. If he were a true leader, he would have been out amongst the people, meeting with horse farmers, trainers and racetrack owners who are suffering now, watching stallions, mares and racehorses being tugged away from Kentucky by states with more favorable economics and more enlightened legislators. It is the same kind of arrogance and insular thinking that we’ve witnessed most recently in the White House, where a president who was elected under the mantra of change failed to understand how deep the suffering and unhappiness is among the very people who voted for him, leading to an embarrassing defeat for the Democratic Party Tuesday in Massachusets, the most liberal state in the union.

I hold out little hope that my old friend, the senator from Scott, will understand  how wrong he is and how much help the horse industry needs. There is little to do but find and support a strong candidate to displace him from his office in 2012.

Copyright © 2010, The Paulick Report

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In a rather bold move, Governor Steve Beshear of Kentucky produced a budget that assumes $780 million in revenue from expanded gaming. The problem? Gaming is not yet legal in Kentucky.

Beshear stated Kentucky would need to find an additional $850 million in cuts during the next two fiscal years, compared to about $78 million with it.

Click here for the Courier-Journal article

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings